[10-Q] UNIVERSAL LOGISTICS HOLDINGS, INC. Quarterly Earnings Report
Universal Logistics Holdings (ULH) reported a Q3 2025 net loss driven by a non‑cash impairment. Revenue was $396.8 million versus $426.8 million a year ago. The company recorded $81.2 million of impairment charges in the quarter, including $58.0 million of goodwill and $23.2 million of customer‑relationship intangibles tied to the intermodal segment, reflecting reduced demand, lower margins, and a higher discount rate.
Q3 net loss was $74.8 million, or $2.84 per share, compared to net income of $26.5 million last year. Year‑to‑date revenue was $1,173.0 million versus $1,380.9 million, with a year‑to‑date net loss of $60.4 million. Operating cash flow for the first thirty‑nine weeks was $135.9 million.
At quarter‑end, total assets were $1,817.1 million and total debt was $824.2 million. Subsequent events included a Revolving Credit Facility increase to $500.0 million and a $195.9 million credit tenant lease financing at 6.84%, used to fully repay $35.3 million under the UACL Credit Agreement and prepay $158.6 million on the revolver, leaving $218.8 million outstanding. A cash dividend of $0.105 per share was declared.
- None.
- Q3 2025 included an $81.2 million impairment (intermodal), leading to a $74.8 million net loss and a sharp decline from prior-year profitability.
Insights
Material intermodal impairment swings ULH to a quarterly loss.
ULH posted lower revenue while recording an
Operating cash flow of
Post‑quarter, a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission File Number:
(Exact Name of Registrant as Specified in Its Charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
(Address, including Zip Code of Principal Executive Offices)
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(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares of the registrant’s common stock, no par value, outstanding as of November 3, 2025, was
PART I – FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
UNIVERSAL LOGISTICS HOLDINGS, INC.
Unaudited Consolidated Balance Sheets
(In thousands, except share data)
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September 27, |
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December 31, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Accounts receivable – net of allowance for credit losses of $ |
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Contract receivable |
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Other receivables |
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Prepaid expenses and other |
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Prepaid income taxes |
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Due from affiliates |
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Total current assets |
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Property and equipment – net of accumulated depreciation of $ |
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Operating lease right-of-use asset |
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Goodwill |
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Intangible assets – net of accumulated amortization of $ |
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Contract receivable, net of current portion |
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Deferred income taxes |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Current portion of long-term debt |
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Current portion of operating lease liabilities |
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Accrued expenses and other current liabilities |
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Insurance and claims |
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Due to affiliates |
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Income taxes payable |
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Total current liabilities |
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Long-term liabilities: |
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Long-term debt, net of current portion |
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Operating lease liabilities, net of current portion |
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Deferred income taxes |
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Other long-term liabilities |
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Total long-term liabilities |
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Stockholders' equity: |
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Common stock, |
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Paid-in capital |
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Treasury stock, at cost; |
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Retained earnings |
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Accumulated other comprehensive income (loss): |
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Interest rate swaps, net of income taxes of $ |
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Foreign currency translation adjustments |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes to consolidated financial statements.
2
UNIVERSAL LOGISTICS HOLDINGS, INC.
Unaudited Consolidated Statements of Income
(In thousands, except per share data)
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Thirteen Weeks Ended |
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Thirty-nine Weeks Ended |
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September 27, |
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September 28, |
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September 27, |
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September 28, |
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Operating revenues: |
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Truckload services |
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$ |
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$ |
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$ |
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$ |
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Brokerage services |
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Intermodal services |
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Dedicated services |
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Value-added services |
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Total operating revenues |
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Operating expenses: |
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Purchased transportation and equipment rent |
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Direct personnel and related benefits |
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Operating supplies and expenses |
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Commission expense |
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Occupancy expense |
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General and administrative |
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Insurance and claims |
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Depreciation and amortization |
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Impairment expense |
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Total operating expenses |
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Income (loss) from operations |
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( |
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Interest income |
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Interest expense |
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Other non-operating income |
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Income (loss) before income taxes |
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( |
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( |
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Income tax expense (benefit) |
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( |
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( |
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Net income (loss) |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Earnings per common share: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
( |
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$ |
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Weighted average number of common shares outstanding: |
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Basic |
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Diluted |
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Dividends declared per common share |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to consolidated financial statements.
3
UNIVERSAL LOGISTICS HOLDINGS, INC.
Unaudited Consolidated Statements of Comprehensive Income
(In thousands)
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Thirteen Weeks Ended |
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Thirty-nine Weeks Ended |
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September 27, |
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September 28, |
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September 27, |
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September 28, |
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Net income (loss) |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Other comprehensive income (loss): |
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Unrealized changes in fair value of interest rate swaps, |
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( |
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( |
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( |
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( |
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Foreign currency translation adjustments |
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( |
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( |
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Total other comprehensive income (loss) |
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( |
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( |
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( |
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Total comprehensive income (loss) |
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$ |
( |
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$ |
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$ |
( |
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$ |
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See accompanying notes to consolidated financial statements.
4
UNIVERSAL LOGISTICS HOLDINGS, INC.
Unaudited Consolidated Statements of Cash Flows
(In thousands)
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Thirty-nine Weeks Ended |
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September 27, |
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September 28, |
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Cash flows from operating activities: |
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Net income (loss) |
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$ |
( |
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$ |
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Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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Depreciation and amortization |
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Noncash lease expense |
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Impairment expense |
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Gain on marketable equity securities |
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( |
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Loss on disposal of property and equipment |
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Amortization of debt issuance costs |
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Stock-based compensation |
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Provision for credit losses |
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( |
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Deferred income taxes |
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( |
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Change in assets and liabilities: |
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Trade and other accounts receivable |
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( |
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Contract receivable, prepaid income taxes, prepaid expenses and other assets |
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( |
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( |
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Principal reduction in operating lease liabilities |
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( |
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( |
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Accounts payable, accrued expenses, income taxes payable, |
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Due to/from affiliates, net |
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( |
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Other long-term liabilities |
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( |
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( |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Capital expenditures |
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( |
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Proceeds from the sale of property and equipment |
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Proceeds from the sale of marketable securities |
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Acquisition of business |
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( |
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Net cash used in investing activities |
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( |
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( |
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Cash flows from financing activities: |
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Proceeds from borrowing - revolving debt |
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Repayments of debt - revolving debt |
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( |
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( |
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Proceeds from borrowing - term debt |
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Repayments of debt - term debt |
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( |
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( |
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Dividends paid |
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( |
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( |
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Purchases of treasury stock |
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( |
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( |
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Net cash provided by financing activities |
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Effect of exchange rate changes on cash and cash equivalents |
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( |
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( |
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Net increase (decrease) in cash |
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( |
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Cash and cash equivalents – beginning of period |
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Cash and cash equivalents – end of period |
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$ |
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$ |
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Supplemental cash flow information: |
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Cash paid for interest |
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$ |
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$ |
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Cash paid for income taxes |
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$ |
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$ |
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Non-cash operating and financing activities: |
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During the thirty-nine week period ended September 27, 2025, the Company had non-cash activities resulting from the $ |
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See accompanying notes to consolidated financial statements.
5
UNIVERSAL LOGISTICS HOLDINGS, INC.
Unaudited Consolidated Statements of Stockholders’ Equity
(In thousands, except per share data)
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Common |
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Paid-in |
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Treasury |
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Retained |
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Accumulated |
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Total |
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Balances – December 31, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Comprehensive income (loss) |
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— |
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— |
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— |
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— |
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Dividends ($ |
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— |
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— |
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— |
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( |
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— |
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( |
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Stock based compensation |
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— |
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- |
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— |
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Retirement of treasury stock |
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( |
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( |
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( |
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— |
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— |
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Balances – March 30, 2024 |
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— |
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( |
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Net income |
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— |
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— |
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— |
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— |
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Comprehensive income (loss) |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Dividends ($ |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Stock based compensation |
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— |
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— |
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— |
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Purchases of treasury stock |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
Balances - June 29, 2024 |
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( |
) |
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( |
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Net income |
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— |
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— |
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— |
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— |
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Comprehensive income (loss) |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Dividends ($ |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Stock based compensation |
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— |
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— |
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— |
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Balances – September 28, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
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$ |
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Balances – December 31, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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|
$ |
( |
) |
|
$ |
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Comprehensive income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock based compensation |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Balances – March 29, 2025 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Comprehensive income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Dividends ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock based compensation |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Purchases of treasury stock |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balances - June 28, 2025 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Comprehensive income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Dividends ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock based compensation |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Balances – September 28, 2024 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
See accompanying notes to consolidated financial statements.
6
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements
The accompanying unaudited consolidated financial statements of Universal Logistics Holdings, Inc. and its wholly-owned subsidiaries (“Universal”) have been prepared by the Company’s management. In these notes, the terms “us,” “we,” “our,” or the “Company” refer to Universal and its consolidated subsidiaries. In the opinion of management, the unaudited consolidated financial statements include all normal recurring adjustments necessary to present fairly the information required to be set forth therein. All intercompany transactions and balances have been eliminated in consolidation. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, should be read in conjunction with the consolidated financial statements as of December 31, 2024 and 2023 and for each of the years in the three-year period ended December 31, 2024 included in the Company’s Form 10-K filed with the Securities and Exchange Commission. The preparation of the consolidated financial statements requires the use of management’s estimates. Actual results could differ from those estimates.
Our fiscal year ends on December 31 and consists of four quarters, each with thirteen weeks.
The Company made certain immaterial reclassifications to items in its prior financial statements so that their presentation is consistent with the format in the financial statements for the period ended September 27, 2025. These reclassifications, however, had no effect on reported consolidated net income, comprehensive income, earnings per common share, cash flows, total assets or stockholders’ equity as previously reported.
During the third quarter of 2025, the Company completed its annual goodwill impairment tests noting no impairment. Subsequently, in August 2025, the Company identified certain triggering events related to its intermodal reporting segment. In accordance with FASB Accounting Standards Codification (“ASC”) 350 Intangibles—Goodwill and Other and ASC 360 Property, Plant, and Equipment, the Company evaluated certain indefinite and long lived tangible and intangible assets for impairment and concluded that an impairment was present. As a result, during the thirteen weeks ended September 27, 2025 we recognized impairment charges totaling $
In August 2024, the Company closed its company-managed brokerage operations in Nashville, TN. In connection with the closure, the Company recorded pre-tax losses of approximately $
During the third quarter of 2024, the Company identified certain triggering events related to a component of its former company-managed brokerage reporting segment. In accordance with FASB Accounting Standards Codification (“ASC”) 350 Intangibles—Goodwill and Other and ASC 360 Property, Plant, and Equipment, the Company evaluated certain indefinite and long lived tangible and intangible assets for impairment, and recorded an additional goodwill impairment charge of $
In June 2024, the Company revised the estimated useful life and salvage values of certain equipment. The change resulted in additional depreciation expense of $
On July 4, 2025, the One Big Beautiful Bill Act was signed into law. The legislation makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025 and other changes to certain U.S. corporate tax provisions. The effects of the enactment of the legislation during the third quarter for the provisions currently enacted did not have a material impact on our total tax expense.
7
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
Current Economic Conditions
The Company makes estimates and assumptions that affect reported amounts and disclosures included in its financial statements and accompanying notes and assesses certain accounting matters that require consideration of forecasted financial information. The Company's assumptions about future conditions important to these estimates and assumptions are subject to uncertainty, including disruptions to the global supply chain resulting from new or additional tariffs and the negative impact inflationary pressures can have on our operating costs. Prolonged periods of inflation could cause interest rates, equipment, maintenance, labor and other operating costs to continue to increase. New or increased tariffs on imported goods could also impose additional costs on our business or cause disruption in global supply chains. Such disruptions could lead to a decrease in shipping volumes, which would have an adverse impact on our revenues and results of operations.
In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU modifies income tax disclosures by requiring greater disaggregation of information in the rate reconciliations and disclosure of income taxes paid disaggregated by jurisdiction. This ASU is effective for fiscal years beginning after December 31, 2024, using a prospective approach. Early adoption and retrospective application are permitted. We are currently evaluating the impact of the new standard, which is limited to financial statement disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which expands disclosures about certain categories of expenses. This ASU is effective for fiscal years beginning after December 15, 2026. We are currently evaluating the impact of the new standard on our consolidated financial statements and disclosures.
The Company recognizes revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers. The Company broadly groups its services into the following categories: truckload services, brokerage services, intermodal services, dedicated services and value-added services. We disaggregate these categories and report our service lines separately on the Consolidated Statements of Income.
Truckload services include dry van, flatbed, heavy-haul and refrigerated operations. We transport a wide variety of general commodities, including automotive parts, machinery, building materials, paper, food, consumer goods, furniture, steel and other metals on behalf of customers in various industries.
To complement our available capacity, we also provide customers with freight brokerage services by utilizing third-party transportation providers to move freight.
Intermodal services include rail-truck, steamship-truck and support services. Our intermodal support services are primarily short- to medium-distance delivery of rail and steamship containers between the railhead or port and the customer.
Dedicated services are primarily provided in support of automotive and retail customers using van equipment. Our dedicated services are primarily short-run or round-trip moves within a defined geographic area.
Transportation services are short-term in nature; agreements governing their provision generally have a term of
We determine revenue in-transit using the input method, under which revenue is recognized based on the duration of time that has lapsed from the departure date (start of transportation services) to the arrival date (completion of transportation services). Measurement of revenue in-transit requires the application of significant judgment. We calculate the estimated percentage of an order’s transit time that is complete at period end, and we apply that percentage of completion to the order’s estimated revenue.
Value-added services, which are typically dedicated to individual customer requirements, include lift services, material handling, consolidation, sequencing, sub-assembly, cross-dock services, kitting, repacking, warehousing, returnable container management and specialty project development. Value-added revenues are substantially driven by the level of demand for outsourced logistics services and specialty project needs. Major factors that affect value-added service revenue include changes in manufacturing supply chain requirements and production levels in specific industries, particularly the North American automotive and Class 8 heavy-truck industries.
8
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
Revenue is recognized as control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to receive in exchange for its services. We have elected to use the “right to invoice” practical expedient to recognize revenue, reflecting that a customer obtains the benefit associated with value-added services as they are provided. The contracts in our value-added services businesses are negotiated agreements, which contain both fixed and variable components. The variability of revenues is driven by volumes and transactions, which are known as of an invoice date. Value-added service contracts typically have terms that extend beyond one year, and they do not include financing components.
In 2024, value-added services included a specialty project development for a specific customer. The specialty project development service was accounted for as a single unit of account (i.e., as a single performance obligation), which was completed in 2024. Revenue was recognized over time as the Company transferred control of the project to the customer. Because we transferred control of the project over time, we recognized revenue to the extent of our progress towards completion of our performance obligations. We use the cost-to-cost method for these contracts, which measures progress towards completion for each performance obligation based on the ratio of costs incurred to date to the total estimated costs at completion for the applicable performance obligation. Incurred cost represented work performed, which corresponds with and thereby best represents the transfer of control to the customer. Revenue, including estimated fees or profits, was recorded proportionately as costs were incurred. Cost of operations consists of labor, materials, subcontractor costs, and other direct and indirect costs, and we included them in operating supplies and expenses on the consolidated statements of income.
The following table provides information related to contract balances associated with our contracts with customers (in thousands):
|
|
September 27, |
|
|
December 31, |
|
||
Prepaid expenses and other - contract assets |
|
$ |
|
|
$ |
|
||
Marketable equity securities are carried at fair value, with gains and losses in fair market value included in the determination of net income. The fair value of marketable equity securities is determined based on quoted market prices in active markets, as described in Note 8.
The following table sets forth market value, cost basis, and unrealized gains on equity securities (in thousands):
|
|
September 27, |
|
|
December 31, |
|
||
Fair value |
|
$ |
|
|
$ |
|
||
Cost basis |
|
|
|
|
|
|
||
Unrealized gain |
|
$ |
|
|
$ |
|
||
The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities (in thousands):
|
|
September 27, |
|
|
December 31, |
|
||
Gross unrealized gains |
|
$ |
|
|
$ |
|
||
Gross unrealized losses |
|
|
( |
) |
|
|
( |
) |
Net unrealized gains |
|
$ |
|
|
$ |
|
||
9
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
The following table shows the Company's net realized gains on marketable equity securities (in thousands):
|
|
Thirteen Weeks Ended |
|
|
Thirty-nine Weeks Ended |
|
||||||||||
|
|
September 27, |
|
|
September 28, |
|
|
September 27, |
|
|
September 28, |
|
||||
Realized gain |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sale proceeds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Cost basis of securities sold |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Realized gain |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Realized gain, net of taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
During the thirteen-week and thirty-nine week periods ended September 27, 2025, our marketable equity securities portfolio experienced a net unrealized pre-tax gain (loss) in market value of approximately $
During the thirteen-week and thirty-nine week periods ended September 28, 2024, our marketable equity securities portfolio experienced a net unrealized pre-tax gain (loss) in market value of approximately $
The changes in the carrying amount of goodwill during the year ended December 31, 2024 and the thirty-nine weeks ended September 27, 2025 are as follows (in thousands):
Balance as of January 1, 2024 |
|
$ |
|
|
Acquisition of business |
|
|
|
|
Goodwill impairment |
|
|
( |
) |
Balance as of December 31, 2024 |
|
|
|
|
Goodwill impairment |
|
|
( |
) |
Balance as of September 27, 2025 |
|
$ |
|
As described in Note 1, “Basis of Presentation”, we recorded goodwill impairment charges of $
At both September 27, 2025 and December 31, 2024, $
Accrued expenses and other current liabilities are comprised of the following (in thousands):
|
|
September 27, |
|
|
December 31, |
|
||
Accrued payroll |
|
$ |
|
|
$ |
|
||
Accrued payroll taxes |
|
|
|
|
|
|
||
Driver escrow liabilities |
|
|
|
|
|
|
||
Legal settlements and claims |
|
|
|
|
|
|
||
Commissions, other taxes and other |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
10
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
Debt is comprised of the following (in thousands):
|
|
Interest Rates |
|
September 27, |
|
|
December 31, |
|
||
Outstanding Debt: |
|
|
|
|
|
|
|
|
||
Revolving Credit Facility (1) (2) |
|
|
$ |
|
|
$ |
|
|||
UACL Credit Agreement (2) |
|
|
|
|
|
|
|
|
||
Term Loan |
|
|
|
|
|
|
|
|||
Revolver |
|
|
|
|
|
|
|
|||
Equipment Financing (3) |
|
|
|
|
|
|
|
|||
Real Estate Facility (4) |
|
|
|
|
|
|
|
|||
Margin Facility (5) |
|
|
|
|
|
|
|
|||
Unamortized debt issuance costs |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||
Less current portion of long-term debt |
|
|
|
|
|
|
|
|
||
Total long-term debt, net of current portion |
|
|
|
$ |
|
|
$ |
|
||
(1)
(2)
(3)
(4)
(5)
11
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
The Company is also party to an interest rate swap agreement that qualifies for hedge accounting. The Company executed the swap agreement to fix a portion of the interest rate on its variable rate debt. Under the swap agreement, the Company receives interest at Term SOFR and pays a fixed rate of
Subsequent Events – Third Amendment Agreement; Credit Tenant Lease Financing. On October 1, 2025, subsequent to the quarter-end, we entered into a third amendment agreement to our Revolving Credit Facility. Furthermore, on October 22, 2025, subsequent to the quarter-end, we completed a credit tenant lease financing transaction, the proceeds of which were used to repay in full the outstanding debt under the UACL Credit Agreement and to prepay in part the outstanding revolving loans under our Revolving Credit Facility. See Note 16, “Subsequent Events” for additional information regarding these transactions.
FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date and expanded disclosures with respect to fair value measurements.
FASB ASC Topic 820 also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
We have segregated all financial assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the tables below (in thousands):
|
|
September 27, |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Fair Value Measurement |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Marketable securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
12
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
|
|
December 31, |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Fair Value Measurement |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Marketable securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The valuation techniques used to measure fair value for the items in the tables above are as follows:
Our Revolving Credit Facility, UACL Credit Agreement, Real Estate Facility and one equipment note consist of variable rate borrowings. We categorize borrowings under these credit agreements as Level 2 in the fair value hierarchy. The carrying value of these borrowings approximate fair value because the applicable interest rates are adjusted frequently based on short-term market rates.
For our Equipment Financing with fixed rates, the fair values are estimated using discounted cash flow analyses, based on our current incremental borrowing rates for similar types of borrowing arrangements. We categorize these borrowings as Level 2 in the fair value hierarchy.
|
|
Carrying Value |
|
|
Estimated Fair |
|
||
|
|
|
|
|
|
|
||
Equipment promissory notes |
|
$ |
|
|
$ |
|
||
We have not elected the fair value option for any of our financial instruments.
As of September 27, 2025, our obligations under operating lease arrangements primarily related to the rental of office space, warehouses, freight distribution centers, terminal yards and equipment. Right-of-use assets represent our right to use an underlying asset over the lease term and lease liabilities represent the obligation to make lease payments resulting from the lease agreement. We recognize a right-of-use asset and a lease liability on the effective date of a lease agreement. These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date, using our incremental borrowing rate as of the respective dates of lease inception, as the rate implicit in each lease is not readily determinable. Our incremental borrowing rate is based on collateralized borrowings of similar assets with terms that approximate the lease term when available and when collateralized rates are not available, we use uncollateralized rates with similar terms adjusted for the fact that it is an unsecured rate
Our lease obligations typically do not include options to purchase the leased property, nor do they contain residual value guarantees or material restrictive covenants. Options to extend or terminate an agreement are included in the lease term when it becomes reasonably certain the option will be exercised. As of September 27, 2025, we were not reasonably certain of exercising any renewal or termination options, and as such, no adjustments were made to the right-of-use lease assets or corresponding liabilities.
13
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
Leases with an initial term of 12 months or less, short-term leases, are not recorded on the balance sheet. Lease expense for short-term and long-term operating leases is recognized on a straight-line basis over the lease term. For facility leases, variable lease costs include the costs of common area maintenance, taxes, and insurance for which we pay the lessors an estimate that is adjusted to actual expense on a quarterly or annual basis depending on the underlying contract terms. For equipment leases, variable lease costs may include additional fees associated with using equipment in excess of estimated amounts.
The following table summarizes our lease costs for the thirteen weeks and thirty-nine weeks ended September 27, 2025 and September 28, 2024 (in thousands):
|
|
Thirteen Weeks Ended September 27, 2025 |
|
|||||||||
|
|
With Affiliates |
|
|
With Third Parties |
|
|
Total |
|
|||
Lease cost |
|
|
|
|
|
|
|
|
|
|||
Operating lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Short-term lease cost |
|
|
|
|
|
|
|
|
|
|||
Variable lease cost |
|
|
|
|
|
|
|
|
|
|||
Total lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
Thirteen Weeks Ended September 28, 2024 |
|
|||||||||
|
|
With Affiliates |
|
|
With Third Parties |
|
|
Total |
|
|||
Lease cost |
|
|
|
|
|
|
|
|
|
|||
Operating lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Short-term lease cost |
|
|
|
|
|
|
|
|
|
|||
Variable lease cost |
|
|
|
|
|
|
|
|
|
|||
Total lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Thirty-nine Weeks Ended September 27, 2025 |
|
|||||||||
|
|
With Affiliates |
|
|
With Third Parties |
|
|
Total |
|
|||
Lease cost |
|
|
|
|
|
|
|
|
|
|||
Operating lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Short-term lease cost |
|
|
|
|
|
|
|
|
|
|||
Variable lease cost |
|
|
|
|
|
|
|
|
|
|||
Total lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
Thirty-nine Weeks Ended September 29, 2024 |
|
|||||||||
|
|
With Affiliates |
|
|
With Third Parties |
|
|
Total |
|
|||
Lease cost |
|
|
|
|
|
|
|
|
|
|||
Operating lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Short-term lease cost |
|
|
|
|
|
|
|
|
|
|||
Variable lease cost |
|
|
|
|
|
|
|
|
|
|||
Total lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|||
14
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
The following table summarizes other lease related information as of and for the thirty-nine week periods ended September 27, 2025 and September 28, 2024 (in thousands):
|
|
September 27, |
|
|||||||||
|
|
With |
|
|
With Third |
|
|
Total |
|
|||
Other information |
|
|
|
|
|
|
|
|
|
|||
Cash paid for amounts included in the measurement of operating leases |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Right-of-use asset change due to lease termination |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Right-of-use assets obtained in exchange for new operating lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Future right-of-use asset change due to a lease signed with a future commencement date |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Weighted-average remaining lease term (in years) |
|
|
|
|
|
|
|
|
|
|||
Weighted-average discount rate |
|
|
% |
|
|
% |
|
|
% |
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
September 28, |
|
|||||||||
|
|
With |
|
|
With Third |
|
|
Total |
|
|||
Other information |
|
|
|
|
|
|
|
|
|
|||
Cash paid for amounts included in the measurement of operating leases |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Right-of-use assets obtained in exchange for new operating lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Weighted-average remaining lease term (in years) |
|
|
|
|
|
|
|
|
|
|||
Weighted-average discount rate |
|
|
% |
|
|
% |
|
|
% |
|||
Future minimum lease payments under these operating leases as of September 27, 2025, are as follows (in thousands):
|
|
With Affiliates |
|
|
With Third Parties |
|
|
Total |
|
|||
2025 (remaining) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
2026 |
|
|
|
|
|
|
|
|
|
|||
2027 |
|
|
|
|
|
|
|
|
|
|||
2028 |
|
|
|
|
|
|
|
|
|
|||
2029 |
|
|
|
|
|
|
|
|
|
|||
Thereafter |
|
|
|
|
|
|
|
|
|
|||
Total required lease payments |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Less amounts representing interest |
|
|
|
|
|
|
|
|
( |
) |
||
Present value of lease liabilities |
|
|
|
|
|
|
|
$ |
|
|||
15
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
Matthew T. Moroun is Chair of our Board of Directors and his son, Matthew J. Moroun, is a member of our Board. Certain Moroun family trusts beneficially own a majority of our outstanding shares. Matthew T. Moroun is trustee of these trusts with investment authority over the shares, and Frederick P. Calderone, a member of our Board, is special trustee of these trusts with voting authority over the shares. The Moroun family also owns or significantly influences the management and operating policies of other businesses engaged in transportation, insurance, business services, and real estate development and management. In the ordinary course of business, we procure from these companies certain supplementary administrative support services, including legal, human resources, tax, and IT infrastructure services. The Audit Committee of our Board reviews and approves related party transactions. The cost of these services is based on the actual or estimated utilization of the specific service.
We also purchase other services from our affiliates.
|
|
Thirteen Weeks Ended |
|
|
Thirty-nine Weeks Ended |
|
||||||||||
|
|
September 27, |
|
|
September 28, |
|
|
September 27, |
|
|
September 28, |
|
||||
Insurance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Real estate rent and related costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Administrative support services |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Truck fuel, maintenance and other operating costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contracted transportation services |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
We pay the direct variable cost of maintenance, fueling and other operational support costs for services delivered at our affiliate’s trucking terminals that are geographically remote from our own facilities. Such costs are billed when incurred, paid on a routine basis, and reflect actual labor utilization, repair parts costs or quantities of fuel purchased.
We lease
We purchase employee medical, workers’ compensation, property and casualty, cargo, warehousing and other general liability insurance from an insurance company controlled by our controlling stockholder. In our Consolidated Balance Sheets, we record our insured claims liability and the related recovery in insurance and claims, and other receivables. At September 27, 2025 and December 31, 2024, there were $
Other services from affiliates, including contracted transportation services, are delivered to us on a per-transaction basis or pursuant to separate contractual arrangements provided in the ordinary course of business. At September 27, 2025 and December 31, 2024, amounts due to affiliates were $
During the thirty-nine weeks ended September 27, 2025, we contracted with an affiliate to provide real property improvements for us totaling $
During the thirty-nine weeks ended September 28, 2024, we purchased trailers from an affiliate totaling $
16
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
Services provided by Universal to Affiliates
We periodically assist companies that are owned by our controlling stockholder by providing selected transportation and logistics services in connection with their specific customer contracts or purchase orders. Truck fueling and administrative expenses are presented net in operating expense.
|
|
Thirteen Weeks Ended |
|
|
Thirty-nine Weeks Ended |
|
||||||||||
|
|
September 27, |
|
|
September 28, |
|
|
September 27, |
|
|
September 28, |
|
||||
Contracted transportation services |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Facilities and related support |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
During the thirty-nine weeks ended September 27, 2025, we sold used trailers to an affiliate for $
At September 27, 2025 and December 31, 2024, amounts due from affiliates were $
In May 2025, we granted
In February 2025, we granted
In February 2025, we granted
In May 2024, we granted
In February 2024, we granted
In March 2023, we granted
In September 2021, we granted
In February 2020, we granted
17
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
In January 2020, we granted
A grantee’s vesting of restricted stock awards may be accelerated under certain conditions, including retirement.
The following table summarizes the status of the our non-vested shares and related information for the period indicated:
|
|
Shares |
|
|
Weighted |
|
||
Non-vested at January 1, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Vested |
|
|
( |
) |
|
$ |
|
|
Forfeited |
|
|
|
|
$ |
|
||
Balance at September 27, 2025 |
|
|
|
|
$ |
|
||
In the thirty-nine week periods ended September 27, 2025 and September 28, 2024, the total grant date fair value of vested shares recognized as compensation costs was $
Basic earnings per common share amounts are based on the weighted average number of common shares outstanding, excluding outstanding non-vested restricted stock. Diluted earnings per common share include dilutive common stock equivalents determined by the treasury stock method. For the thirteen weeks and thirty-nine weeks ended September 27, 2025, there were
In the thirteen weeks and thirty-nine weeks ended September 27, 2025, we excluded
On
18
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
During the third quarter of 2024, we changed the way we aggregate our business units and adopted a new segment reporting structure. In connection with this change, the historical results of the former company-managed brokerage business is included in other non-reportable segments. As a result, we report our financial results in
Operations aggregated in our contract logistics segment deliver value-added or dedicated transportation services to support in-bound logistics to industrial customers and major retailers on a contractual basis, generally pursuant to terms of one year or longer. Our intermodal segment is associated with local and regional drayage moves coordinated by company-managed terminals using a mix of owner-operators, company equipment and third-party capacity providers (broker carriers). Operations included in our trucking segment are associated with individual freight shipments coordinated by our agents and company-managed terminals using a mix of owner-operators, company equipment and broker carriers. Other non-reportable segments are comprised of legacy company-managed brokerage operations and the Company’s subsidiaries that provide support services to other subsidiaries.
The following tables summarize information about our reportable segments for the thirteen week and thirty-nine week periods ended September 27, 2025 and September 28, 2024 (in thousands):
|
|
Thirteen Weeks Ended September 27, 2025 |
|
|||||||||||||||||
|
|
Contract Logistics |
|
|
Intermodal |
|
|
Trucking |
|
|
Other (2) |
|
|
Total |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total operating revenues (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Purchased transportation and equipment rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Direct personnel and related benefits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating supplies and expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Commission expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Occupancy expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other segment expenses (3) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Income (loss) from operations |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||
(1)
(2)
(3)
19
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
|
|
Thirteen Weeks Ended September 28, 2024 (Recast) |
|
|||||||||||||||||
|
|
Contract Logistics |
|
|
Intermodal |
|
|
Trucking |
|
|
Other (2) |
|
|
Total |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total operating revenues (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Purchased transportation and equipment rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Direct personnel and related benefits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating supplies and expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Commission expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Occupancy expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other segment expenses (3) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) from operations |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
(1)
(2)
(3)
|
|
Thirty-nine Weeks Ended September 27, 2025 |
|
|||||||||||||||||
|
|
Contract Logistics |
|
|
Intermodal |
|
|
Trucking |
|
|
Other (2) |
|
|
Total |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total operating revenues (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Purchased transportation and equipment rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Direct personnel and related benefits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating supplies and expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Commission expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Occupancy expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other segment expenses (3) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Income (loss) from operations |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||
(1)
(2)
(3)
20
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
|
|
Thirty-nine Weeks Ended September 28, 2024 (Recast) |
|
|||||||||||||||||
|
|
Contract Logistics |
|
|
Intermodal |
|
|
Trucking |
|
|
Other (2) |
|
|
Total |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total operating revenues (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Purchased transportation and equipment rent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Direct personnel and related benefits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating supplies and expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Commission expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Occupancy expense |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other segment expenses (3) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) from operations |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
(1)
(2)
(3)
Our principal commitments relate to long-term real estate leases and payment obligations to equipment vendors.
The Company is involved in certain other claims and pending litigation arising from the ordinary conduct of business. We also provide accruals for claims within our self-insured retention amounts. Based on the knowledge of the facts, and in certain cases, opinions of outside counsel, in the Company’s opinion the resolution of these claims and pending litigation will not have a material effect on our financial position, results of operations or cash flows. However, if we experience claims that are not covered by our insurance or that exceed our estimated claim reserve, it could increase the volatility of our earnings and have a materially adverse effect on our financial condition, results of operations or cash flows.
At September 27, 2025, approximately
On October 1, 2025, we entered into a third amendment agreement to our Revolving Credit Facility. The amendment modifies the credit agreement by increasing the maximum revolving amount by $
On October 22, 2025, we completed a credit tenant lease (“CTL”) financing transaction by issuing a senior secured promissory note in the principal amount of approximately $
21
UNIVERSAL LOGISTICS HOLDINGS, INC.
Notes to Unaudited Consolidated Financial Statements - Continued
On
22
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Some of the statements and assumptions in this Form 10-Q are forward-looking statements. These statements identify prospective information. Important factors could cause actual results to differ, possibly materially, from those in the forward-looking statements. In some cases you can identify forward-looking statements by words such as “anticipate,” “expect,” “believe,” “targets,” “could,” “estimate,” “plan,” “intend,” “may,” “should,” “will” and “would” or other similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position or state other “forward-looking” information. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management’s good faith belief with respect to future events and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. The factors listed in the section captioned “Risk Factors” in Part I, Item 1A in our Form 10-K for the year ended December 31, 2024 and Part II, Item 1A of this Form 10-Q, as well as any other cautionary language in these filings, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements.
Forward-looking statements speak only as of the date the statements are made. We assume 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. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect thereto or with respect to other forward-looking statements.
Overview
Universal Logistics Holdings, Inc. is a holding company incorporated in Nevada on May 1, 2025 and previously incorporated in Michigan on December 11, 2001. Our subsidiaries provide a variety of customized transportation and logistics solutions throughout the United States and in Mexico, Canada and Colombia. Our operating subsidiaries provide customers with a broad scope of services across their entire supply chain, including truckload, brokerage, intermodal, dedicated and value-added services.
Our operating subsidiaries provide a comprehensive suite of transportation and logistics solutions that allow our customers and clients to reduce costs and manage their global supply chains more efficiently. We market our services through a direct sales and marketing network focused on selling our portfolio of services to large customers in specific industry sectors, through company-managed facilities, and through a contract network of agents who solicit freight business directly from shippers. We believe our flexible business model is highly scalable and will continue to support our growth with comparatively modest capital expenditure requirements. Our business model, combined with a disciplined approach to contract structuring and pricing, creates a highly flexible cost structure that allows us to expand and contract quickly in response to changes in demand from our customers.
We generate substantially all of our revenues through fees charged to customers for the transportation of freight and for the customized logistics services we provide. We also derive revenue from fuel surcharges, where separately identifiable, loading and unloading activities, equipment detention, container management and storage and other related services. Operations in our intermodal and trucking segments are associated with individual freight shipments coordinated by our agents and company-managed terminals. In contrast, our contract logistics segment delivers value-added services and/or transportation services to specific customers on a dedicated basis, generally pursuant to contract terms of one year or longer. Our segments are further distinguished by the amount of forward visibility we have into pricing and volumes, and also by the extent to which we dedicate resources and company-owned equipment.
The following discussion of the Company’s financial condition and results of operations should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024 and the unaudited Consolidated Financial Statements and related notes contained in this Quarterly Report on Form 10-Q.
Current Economic Conditions
A prolonged period of inflationary pressures could cause interest rates, equipment, maintenance, labor and other operating costs to continue to increase. If the Company is unable to offset rising costs through corresponding customer rate increases, such increases could adversely affect our results of operations. New or increased tariffs on imported goods could also impose additional costs on our business or cause disruption in global supply chains. Such disruptions could lead to a decrease in shipping volumes, which would have an adverse impact on our revenues and results of operations.
23
While operating cash flows may be negatively impacted by inflation-driven cost increases or reductions in shipping volumes, the Company believes we will be able to finance our near term needs for working capital over the next twelve months, as well as any planned capital expenditures during such period, with cash balances, cash flows from operations, and loans and extensions of credit under our credit facilities and on margin against our marketable securities. Should the impact of inflation-driven cost increases last longer than anticipated, and/or our cash flow from operations decline more than expected, we may need to obtain additional financing. The Company’s ability to fund future operating expenses and capital expenditures, as well as its ability to meet future debt service obligations or refinance indebtedness will depend on future operating performance, which will be affected by general economic, financial, and other factors beyond our control.
Operating Revenues
For financial reporting, we broadly group our services into the following categories: truckload services, brokerage services, intermodal services, dedicated services and value-added services. Our truckload, brokerage and intermodal services are associated with individual freight shipments coordinated by our agents and company-managed terminals, while our dedicated and value-added services are provided to specific customers on a contractual basis, generally pursuant to contract terms of one year or longer. The following table sets forth operating revenues resulting from each of these categories for the thirteen weeks and thirty-nine weeks ended September 27, 2025 and September 28, 2024, presented as a percentage of total operating revenues:
|
|
|
Thirteen Weeks Ended |
|
|
Thirty-nine Weeks Ended |
|
||||||||||
|
|
September 27, |
|
|
September 28, |
|
|
September 27, |
|
|
September 28, |
|
|||||
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Truckload services |
|
|
12.7 |
% |
|
|
14.9 |
% |
|
|
11.4 |
% |
|
|
12.5 |
% |
|
Brokerage services |
|
|
4.5 |
|
|
|
9.9 |
|
|
|
4.9 |
|
|
|
11.3 |
|
|
Intermodal services |
|
|
16.1 |
|
|
|
17.7 |
|
|
|
17.1 |
|
|
|
16.7 |
|
|
Dedicated services |
|
|
21.7 |
|
|
|
20.5 |
|
|
|
21.6 |
|
|
|
19.3 |
|
|
Value-added services |
|
|
45.0 |
|
|
|
37.0 |
|
|
|
45.0 |
|
|
|
40.2 |
|
|
Total operating revenues |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
24
Results of Operations
Thirteen Weeks Ended September 27, 2025 Compared to Thirteen Weeks Ended September 28, 2024
The following table sets forth items derived from our consolidated statements of income for the thirteen weeks ended September 27, 2025 and September 28, 2024:
|
|
Thirteen Weeks Ended |
|
|||||||||||||||||
|
|
September 27, |
|
|
September 28, |
|
|
Percent Change in Dollar Amount |
|
|||||||||||
(Dollars in millions) |
|
$ |
|
|
% |
|
|
$ |
|
|
% |
|
|
% |
|
|||||
Operating revenues |
|
$ |
396,786 |
|
|
|
100.0 |
% |
|
$ |
426,833 |
|
|
|
100.0 |
% |
|
|
(7.0 |
)% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Purchased transportation and equipment rent |
|
|
80,063 |
|
|
|
20.2 |
|
|
|
120,700 |
|
|
|
28.3 |
|
|
|
(33.7 |
) |
Direct personnel and related benefits |
|
|
176,572 |
|
|
|
44.5 |
|
|
|
132,081 |
|
|
|
30.9 |
|
|
|
33.7 |
|
Operating supplies and expenses |
|
|
57,523 |
|
|
|
14.5 |
|
|
|
60,532 |
|
|
|
14.2 |
|
|
|
(5.0 |
) |
Commission expense |
|
|
4,271 |
|
|
|
1.1 |
|
|
|
6,985 |
|
|
|
1.6 |
|
|
|
(38.9 |
) |
Occupancy expense |
|
|
13,738 |
|
|
|
3.5 |
|
|
|
11,179 |
|
|
|
2.6 |
|
|
|
22.9 |
|
General and administrative |
|
|
13,625 |
|
|
|
3.4 |
|
|
|
13,037 |
|
|
|
3.1 |
|
|
|
4.5 |
|
Insurance and claims |
|
|
8,494 |
|
|
|
2.1 |
|
|
|
5,681 |
|
|
|
1.3 |
|
|
|
49.5 |
|
Depreciation and amortization |
|
|
35,499 |
|
|
|
8.9 |
|
|
|
30,284 |
|
|
|
7.1 |
|
|
|
17.2 |
|
Impairment expense |
|
|
81,245 |
|
|
|
20.5 |
|
|
|
3,720 |
|
|
|
1 |
|
|
n/m |
|
|
Total operating expenses |
|
|
471,030 |
|
|
|
118.7 |
|
|
|
384,199 |
|
|
|
90.0 |
|
|
|
22.6 |
|
Income (loss) from operations |
|
|
(74,244 |
) |
|
|
(18.7 |
) |
|
|
42,634 |
|
|
|
10.0 |
|
|
|
(274.1 |
) |
Interest income (expense), net |
|
|
(9,985 |
) |
|
|
(2.5 |
) |
|
|
(7,416 |
) |
|
|
(1.7 |
) |
|
|
34.6 |
|
Other non-operating income |
|
|
833 |
|
|
|
0.2 |
|
|
|
4 |
|
|
|
0.0 |
|
|
|
20,725.0 |
|
Income (loss) before income taxes |
|
|
(83,396 |
) |
|
|
(21.0 |
) |
|
|
35,222 |
|
|
|
8.3 |
|
|
|
(336.8 |
) |
Income tax expense (benefit) |
|
|
(8,624 |
) |
|
|
(2.2 |
) |
|
|
8,682 |
|
|
|
1.9 |
|
|
|
(199.3 |
) |
Net income (loss) |
|
$ |
(74,772 |
) |
|
|
-18.8 |
% |
|
$ |
26,540 |
|
|
|
6.2 |
% |
|
|
(381.7 |
)% |
Operating revenues. The overall decrease in revenue was primarily attributable to decreases in our transportation-related services. For comparison purposes, the third quarter of 2025 included $50.2 million of revenue attributable to our recent acquisition of Parsec, while the third quarter of 2024 included $36.8 million of revenue attributable to our specialty development program, which was completed in 2024, and $16.1 million of revenue attributable to our now closed company-managed brokerage operation. Operating revenues included separately-identified fuel surcharges of $20.4 million in the third quarter 2025, compared to $21.9 million in the third quarter 2024. Also included in operating revenues were other accessorial charges such as detention, demurrage and storage, which totaled $9.0 million during the third quarter 2025 compared to $8.9 million one year earlier.
Purchased transportation and equipment rent. Purchased transportation and equipment rent generally increases or decreases in proportion to the revenues generated through owner-operators and other third party providers. These fluctuations are generally correlated with changes in demand for transactional transportation-related services. The absolute decrease in purchased transportation and equipment rental costs was primarily the result of an overall decrease in transactional transportation-related services. In the third quarter 2025, transactional transportation-related service revenues decreased 27.1% compared to the prior year.
Direct personnel and related benefits. Trends in direct personnel and benefit costs are generally correlated with changes in operating facilities and headcount requirements and, therefore, fluctuate correspondingly with the level of demand for our staffing needs in our contract logistics segment, which includes value-added services and dedicated transportation, as well as the use of employee drivers in some of our intermodal operations. The increase in the third quarter 2025 was due to an increase in headcount in our contract logistics business due to the acquisition of Parsec. While generalizations about the impact of personnel and related benefits costs are difficult, we manage compensation and staffing levels, including the use of contract labor, to maintain target economics based on near-term projections of demand for our services.
Operating supplies and expenses. Operating supplies and expenses include items such as fuel, maintenance, cost of materials, communications, utilities and other operating expenses, and generally relate to fluctuations in customer demand. The main element driving the decrease was higher expenses incurred in the third quarter 2024 in connection with the contract logistics specialty development project, which was completed in 2024.
Commission expense. Commission expense decreased due to decreased revenue in our agency-based truckload business.
25
Occupancy expense. The increase in occupancy expense was attributable to a general increase in building rents as well as additional property locations.
General and administrative. The increase in general and administrative expenses was due to an increase in information technology expenses during the third quarter of 2025.
Insurance and claims. The increase in insurance and claims expense was primarily due to an increase in cargo claims and general liability insurance.
Depreciation and amortization. Depreciation expense increased $7.2 million in the third quarter of 2025 due to incremental fixed asset additions, including Parsec. This was partially offset by a decrease of $2.0 million in amortization.
Impairment Expense. The third quarter 2025 included $81.2 million of impairment charges related to the intermodal reporting segment. These charges consisted of $58.0 million of goodwill impairment and $23.2 million of impairment related to certain customer-relationship intangible assets. This compares to charges of $3.7 million during the third quarter 2024 relating to our now closed company-managed brokerage operation.
Interest expense, net. The increase in net interest expense reflects an increase in our outstanding borrowings. As of September 27, 2025, our outstanding borrowings were $827.0 million compared to $561.2 million at September 28, 2024.
Other non-operating income. Other non-operating income for the third quarter 2025 includes gains of $0.6 million on marketable securities, compared to gains of $0.1 million in the same period of 2024.
Income tax expense (benefit). Our effective income tax rate was 10.3% in thirteen weeks ended September 27, 2025, compared to 24.6% in the thirteen weeks ended September 28, 2024. The decrease in income taxes is primarily the result of a decrease in taxable income mainly driven by the impairment of goodwill. The decrease in our effective tax rate was due to a change in the mix of operating profits and losses between foreign and domestic tax jurisdictions.
Thirty-nine Weeks Ended September 27, 2025 Compared to Thirty-nine Weeks Ended September 28, 2024
The following table sets forth items derived from our consolidated statements of income for the thirty-nine weeks ended September 27, 2025 and September 28, 2024:
|
|
Thirty-nine Weeks Ended |
|
|||||||||||||||||
|
|
September 27, |
|
|
September 28, |
|
|
Percent Change in Dollar Amount |
|
|||||||||||
(Dollars in millions) |
|
$ |
|
|
% |
|
|
$ |
|
|
% |
|
|
% |
|
|||||
Operating revenues |
|
$ |
1,172,970 |
|
|
|
100.0 |
% |
|
$ |
1,380,904 |
|
|
|
100.0 |
% |
|
|
(15.1 |
)% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Purchased transportation and equipment rent |
|
|
241,314 |
|
|
|
20.6 |
|
|
|
382,628 |
|
|
|
27.7 |
|
|
|
(36.9 |
) |
Direct personnel and related benefits |
|
|
509,105 |
|
|
|
43.4 |
|
|
|
408,381 |
|
|
|
29.6 |
|
|
|
24.7 |
|
Operating supplies and expenses |
|
|
159,186 |
|
|
|
13.6 |
|
|
|
216,914 |
|
|
|
15.7 |
|
|
|
(26.6 |
) |
Commission expense |
|
|
12,922 |
|
|
|
1.1 |
|
|
|
22,485 |
|
|
|
1.6 |
|
|
|
(42.5 |
) |
Occupancy expense |
|
|
36,794 |
|
|
|
3.1 |
|
|
|
32,189 |
|
|
|
2.3 |
|
|
|
14.3 |
|
General and administrative |
|
|
40,828 |
|
|
|
3.5 |
|
|
|
41,242 |
|
|
|
3.0 |
|
|
|
(1.0 |
) |
Insurance and claims |
|
|
23,057 |
|
|
|
2.0 |
|
|
|
20,722 |
|
|
|
1.5 |
|
|
|
11.3 |
|
Depreciation and amortization |
|
|
107,190 |
|
|
|
9.1 |
|
|
|
87,795 |
|
|
|
6.4 |
|
|
|
22.1 |
|
Impairment expense |
|
|
81,245 |
|
|
|
6.9 |
|
|
|
3,720 |
|
|
|
0.3 |
|
|
n/m |
|
|
Total operating expenses |
|
|
1,211,641 |
|
|
|
103.3 |
|
|
|
1,216,076 |
|
|
|
88.1 |
|
|
|
(0.4 |
) |
Income (loss) from operations |
|
|
(38,671 |
) |
|
|
(3.3 |
) |
|
|
164,828 |
|
|
|
11.9 |
|
|
|
(123.5 |
) |
Interest income (expense), net |
|
|
(27,061 |
) |
|
|
(2.3 |
) |
|
|
(20,378 |
) |
|
|
(1.5 |
) |
|
|
32.8 |
|
Other non-operating income |
|
|
1,560 |
|
|
|
0.1 |
|
|
|
2,007 |
|
|
|
0.2 |
|
|
|
(22.3 |
) |
Income (loss) before income taxes |
|
|
(64,172 |
) |
|
|
(5.5 |
) |
|
|
146,457 |
|
|
|
10.6 |
|
|
|
(143.8 |
) |
Income tax expense (benefit) |
|
|
(3,730 |
) |
|
|
(0.3 |
) |
|
|
36,726 |
|
|
|
2.7 |
|
|
|
(110.2 |
) |
Net income (loss) |
|
$ |
(60,442 |
) |
|
|
-5.2 |
% |
|
$ |
109,731 |
|
|
|
7.9 |
% |
|
|
(155.1 |
)% |
26
Operating revenues. The overall decrease in operating revenues was attributable to decreases in both our transportation and our logistics operations. For comparison purposes, the first thirty-nine weeks of 2025 included $161.7 million of revenue attributable to our recent acquisition of Parsec, while the first thirty-nine weeks of 2024 included $176.6 million of revenue attributable to our specialty development program, which was completed in 2024, and $72.6 million of revenue attributable to our now closed company-managed brokerage operation. Operating revenues included separately-identified fuel surcharges of $61.5 million in the first thirty-nine weeks of 2025, compared to $71.1 million in the first thirty-nine weeks of 2024. Also included in operating revenues were other accessorial charges such as detention, demurrage and storage, which totaled $26.3 million during the first thirty-nine weeks of 2025 compared to $25.5 million one year earlier.
Purchased transportation and equipment rent. Purchased transportation and equipment rent generally increases or decreases in proportion to the revenues generated through owner-operators and other third party providers. These fluctuations are generally correlated with changes in demand for transactional transportation-related services. The absolute decrease in purchased transportation and equipment rental costs was primarily the result of an overall decrease in transactional transportation-related services. In the first thirty-nine weeks of 2025, transactional transportation-related service revenues decreased 29.8% compared to the prior year.
Direct personnel and related benefits. Trends in direct personnel and benefit costs are generally correlated with changes in operating facilities and headcount requirements and, therefore, fluctuate correspondingly with the level of demand for our staffing needs in our contract logistics segment, which includes value-added services and dedicated transportation, as well as the use of employee drivers in certain of our intermodal operations. The increase in the first thirty-nine weeks of 2025 was due to an increase in headcount in our contract logistics business due to the acquisition of Parsec. While generalizations about the impact of personnel and related benefits costs are difficult, we manage compensation and staffing levels, including the use of contract labor, to maintain target economics based on near-term projections of demand for our services.
Operating supplies and expenses. Operating supplies and expenses include items such as fuel, maintenance, cost of materials, communications, utilities and other operating expenses, and generally relate to fluctuations in customer demand. The main element driving the decrease was higher expenses incurred in the first thirty-nine weeks of 2024 in connection with the contract logistics specialty development project, which was completed in 2024.
Commission expense. Commission expense decreased due to decreased revenue in our agency-based truckload business.
Occupancy expense. The increase in occupancy expense was due to a general increase in building rents as well as additional property locations.
General and administrative. There was a decrease in general and administrative expense due to a decrease in salaries and wages and professional fees.
Insurance and claims. The increase in insurance and claims expense was primarily due to an increase in cargo claims and general liability insurance.
Depreciation and amortization. The increase in depreciation and amortization expense resulted from a $19.8 million increase in depreciation expense, partially offset by a $0.4 million decrease in amortization expense. The increase in depreciation expense is the result of incremental fixed asset additions during the thirty-nine weeks ended September 27, 2025, as well increases due to the revisions on the estimated useful life and salvage value of certain equipment in the second quarter of 2024 and the acquisition of Parsec in the fourth quarter of 2024. Amortization expense decreased $0.4 million.
Impairment Expense. The first thirty-nine weeks of 2025 included $81.2 million of impairment charges related to the intermodal reporting segment. These charges consisted of $58.0 million of goodwill impairment and $23.2 million of impairment related to certain customer-relationship intangible assets. This compares to charges of $3.7 million during the first thirty-nine weeks of 2024 relating to our now closed company-managed brokerage operation.
Interest expense, net. The increase in net interest expense reflects an increase in our outstanding borrowings. As of September 27, 2025, our outstanding borrowings were $827.0 million compared to $561.2 million at September 28, 2024.
Other non-operating income. Other non-operating income decreased by $0.4 million in the thirty-nine weeks ended September 27, 2025. There were $0.7 million in unrealized gains in the first thirty-nine weeks of 2025, compared to $0.9 million in the same period 2024.
Income tax expense (benefit). Our effective income tax rate was 5.8% in thirty-nine weeks ended September 27, 2025, compared to 25.1% in the thirty-nine weeks ended September 28, 2024. The decrease in income taxes is primarily the result of a decrease in taxable income mainly driven by the impairment of goodwill. The decrease in our effective tax rate was due to a change in the mix of operating profits and losses between foreign and domestic tax jurisdictions.
27
Segment Financial Results
We report our financial results in three distinct reportable segments: contract logistics, intermodal and trucking, which are based primarily on the services each segment provides. This presentation reflects the manner in which management evaluates our operating segments, including an evaluation of economic characteristics and applicable aggregation criteria.
The following tables summarize information about our reportable segments for the thirteen week and thirty-nine week periods ended September 27, 2025 and September 30, 2023 (in thousands):
|
|
Operating Revenues |
|
|||||||||||||
|
|
Thirteen Weeks Ended |
|
|
Thirty-nine Weeks Ended |
|
||||||||||
|
|
September 27, |
|
|
September 28, |
|
|
September 27, |
|
|
September 28, |
|
||||
Contract logistics |
|
$ |
264,390 |
|
|
$ |
245,194 |
|
|
$ |
780,839 |
|
|
$ |
822,301 |
|
Intermodal |
|
|
64,679 |
|
|
|
77,632 |
|
|
|
204,290 |
|
|
|
235,649 |
|
Trucking |
|
|
67,716 |
|
|
|
87,047 |
|
|
|
187,368 |
|
|
|
248,142 |
|
Other |
|
|
1 |
|
|
|
16,960 |
|
|
|
473 |
|
|
|
74,812 |
|
Total operating revenues |
|
$ |
396,786 |
|
|
$ |
426,833 |
|
|
$ |
1,172,970 |
|
|
$ |
1,380,904 |
|
|
|
Income (loss) from Operations |
|
|||||||||||||
|
|
Thirteen Weeks Ended |
|
|
Thirty-nine Weeks Ended |
|
||||||||||
|
|
September 27, |
|
|
September 28, |
|
|
September 27, |
|
|
September 28, |
|
||||
Contract logistics |
|
$ |
13,720 |
|
|
$ |
45,623 |
|
|
$ |
59,349 |
|
|
$ |
179,990 |
|
Intermodal |
|
|
(91,950 |
) |
|
|
(1,127 |
) |
|
|
(108,335 |
) |
|
|
(18,058 |
) |
Trucking |
|
|
3,914 |
|
|
|
7,122 |
|
|
|
9,443 |
|
|
|
15,175 |
|
Other |
|
|
72 |
|
|
|
(8,984 |
) |
|
|
872 |
|
|
|
(12,279 |
) |
Total income (loss) from operations |
|
$ |
(74,244 |
) |
|
$ |
42,634 |
|
|
$ |
(38,671 |
) |
|
$ |
164,828 |
|
Thirteen Weeks Ended September 27, 2025 Compared to Thirteen Weeks Ended September 28, 2024
In the contract logistics segment, which includes our value-added and dedicated services, operating revenues increased 7.8%.Operating revenues in the third quarter 2025 included $50.2 million from the recent acquisition of Parsec, while revenues in the same period last year included $36.8 million attributable to our specialty development project in Stanton, TN, which was completed last year. At the end of the third quarter 2025, we managed 82 value-added programs, compared to 70 in the third quarter 2024. Included in contract logistics segment revenues for the thirteen weeks ended September 27, 2025, were $8.1 million in separately identified fuel surcharges from dedicated transportation services, compared to $7.0 million in the same period last year. Income from operations decreased $31.9 million and operating margin, as a percentage of revenue was 5.2% for the third quarter 2025, compared to 18.6% in the third quarter 2024.
Operating revenues in the intermodal segment decreased 16.7% primarily due to a decrease in the average operating revenue per load, excluding fuel surcharges. Included in intermodal segment revenues for the third quarter 2025 were $7.6 million in separately identified fuel surcharges, compared to $10.0 million in the same period last year. Intermodal segment revenues also include other accessorial charges such as detention, demurrage and storage, which totaled $9.0 million during the third quarter 2025 compared to $8.9 million in the third quarter 2024. Load volumes declined 1.9%, and the average operating revenue per load, excluding fuel surcharges, decreased 14.2% on a year-over-year basis. In the third quarter 2025, the intermodal segment experienced an operating loss of $(92.0) million, including the $81.2 million previously discussed impairment charges, compared to an operating loss of $(1.1) million during the same period last year.
In the trucking segment, operating revenues decreased 22.2% primarily due to a decrease in the number of loads hauled and the average operating revenue per load. Third quarter 2025 trucking segment revenues included $17.3 million of brokerage services compared to $24.3 million during the same period last year. Also included in our trucking segment revenues were $3.6 million in separately identified fuel surcharges during the third quarter 2025 compared to $4.8 million in fuel surcharges in the third quarter 2024. On a year-over-year basis, load volumes declined 19.4% and, the average operating revenue per load, excluding fuel surcharges, decreased 2.3%. As a percentage of revenue, operating margin in the trucking segment for the thirteen weeks ended September 27, 2025, was 5.8% compared to 8.2% for the thirteen weeks ended September 28, 2024.
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Thirty-nine Weeks Ended September 27, 2025 Compared to Thirty-nine Weeks Ended September 28, 2024
In the contract logistics segment, which includes our value-added and dedicated services, operating revenues decreased 5.0%. Operating revenues in the first thirty-nine weeks of 2025 included $161.7 million from the recent acquisition of Parsec, while revenues in the same period last year included $176.6 million attributable to our specialty development project in Stanton, TN, which was completed last year. At the end of the first thirty-nine weeks of 2025, we managed 82 value-added programs, compared to 70 in the first thirty-nine weeks of 2024. Included in contract logistics segment revenues for the thirty-nine weeks ended September 27, 2025, were $24.1 million in separately identified fuel surcharges from dedicated transportation services, compared to $23.7 million in the same period last year. Income from operations decreased $120.6 million and operating margin, as a percentage of revenue was 7.6% for the first thirty-nine weeks of 2025, compared to 21.9% in the first thirty-nine weeks of 2024.
Operating revenues in the intermodal segment decreased 13.3% primarily due to a decrease in the average operating revenue per load and the number of loads hauled. Included in intermodal segment revenues for the thirty-nine weeks ended September 27, 2025 were $23.9 million in separately identified fuel surcharges, compared to $31.5 million in the same period last year. Intermodal segment revenues also include other accessorial charges such as detention, demurrage and storage, which totaled $26.3 million during the first thirty-nine weeks of 2025 compared to $25.5 million in the first thirty-nine weeks of 2024. Load volumes declined 6.1%, while the average operating revenue per load, excluding fuel surcharges, fell 7.2% on a year-over-year basis. In the first thirty-nine weeks of 2025, the intermodal segment experienced an operating loss of $(108.3) million, including the $81.2 million previously discussed impairment charges, compared to an operating loss of $(18.1) million during the same period last year.
In the trucking segment, operating revenues decreased 24.5% primarily due to a decrease in the number of loads hauled. Trucking segment revenues included $53.7 million of brokerage services compared to $78.4 million during the same period last year. Also included in our trucking segment revenues were $10.5 million in separately identified fuel surcharges during the thirty-nine weeks ended September 27, 2025 compared to $15.9 million in fuel surcharges in the thirty-nine weeks ended September 28, 2024. On a year-over-year basis, load volumes declined 24.7%; however, the average operating revenue per load, excluding fuel surcharges, increased 2.8%, supported by our specialty, heavy-haul wind business. As a percentage of revenue, operating margin in the trucking segment for the thirty-nine weeks ended September 27, 2025, was 5.0% compared to 6.1% for the thirty-nine weeks ended September 28, 2024.
Liquidity and Capital Resources
Our primary uses of cash are working capital requirements, capital expenditures, dividend payments, share repurchases, and debt service requirements. Additionally, we may use cash for acquisitions and other investment and financing activities. Working capital is required principally to ensure we are able to run the business and have sufficient funds to satisfy maturing short-term debt and operational expenses. Our capital expenditures consist primarily of transportation equipment, investments in support of our value-added service operations and the expansion of our terminal network.
Historically, our primary source of liquidity has been cash flow from operations. In addition, we have a $400 million revolving credit facility maturing in September 30, 2027, and we may increase the available capacity by $200 million upon our request. At September 27, 2025, $20.4 million was available for borrowing.
Our UACL subsidiaries have credit facility maturing in September 30, 2027, which includes a $10 million revolver. At September 27, 2025, $5.5 million was available for borrowing.
We also finance the purchase of transportation and certain operating equipment with promissory notes. The notes are secured by liens on the specific equipment and are generally payable in 60 to 72 monthly installments.
We also have a $165.4 million term loan facility that matures in April 2032, and it is secured by first-priority mortgages on specific parcels of owned real estate.
We also maintain a short-term line of credit secured by our portfolio of marketable securities. We did not have any amounts advanced against the line as of September 27, 2025, and the maximum available borrowings were $4.9 million.
We anticipate that cash generated from operations, together with amounts available under our credit facilities, will be sufficient to meet our requirements for the foreseeable future. To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that we will obtain these funds through additional borrowings, equity offerings, or a combination of these potential sources of liquidity. Our ability to fund future operating expenses and capital expenditures, as well as our ability to meet future debt service obligations or refinance our indebtedness, will depend on our future operating performance, which will be affected by general economic, financial, and other factors beyond our control.
In the thirty-nine weeks ended September 27, 2025, our capital expenditures totaled $191.3 million. These expenditures primarily consisted of transportation equipment, investments in support of our value-added service operations and the expansion of our terminal network. Through the remainder of 2025, we expect our capital expenditures to be in the range of $25 million to $35 million.
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The following table presents our cash and cash equivalents, marketable securities, and outstanding debt and the present value of our operating lease liabilities as of September 27, 2025 and December 31, 2024 (in thousands):
|
|
September 27, |
|
|
December 31, |
|
||
Cash and cash equivalents |
|
$ |
27,381 |
|
|
$ |
19,351 |
|
Marketable securities |
|
|
9,791 |
|
|
|
11,590 |
|
Outstanding debt |
|
|
827,014 |
|
|
|
762,641 |
|
Present value of operating lease liabilities |
|
|
110,272 |
|
|
|
79,351 |
|
Debt
At September 27, 2025, we were in compliance with all financial covenants under our credit agreements and the agreements governing our promissory notes. For additional information on our financing arrangements, see Item 1, Note 7 to the Unaudited Consolidated Financial Statements.
Subsequent Event – Third Amendment Agreement; Credit Tenant Lease Financing
On October 1, 2025, which is subsequent to quarter-end, we entered into a third amendment agreement to our Revolving Credit Facility. The amendment modifies the credit agreement by increasing the maximum revolving amount by $100 million to $500 million through a partial exercise of the accordion feature set forth in the credit agreement. The amendment further modifies the credit agreement to permit a subsidiary of Universal to borrow up to $200 million under a potential credit tenant lease financing transaction, provided that the net proceeds of such financing are used (i) to repay in full all outstanding indebtedness and other obligations owing under the UACL Credit Agreement, and (ii) to prepay in part the outstanding revolving loans under the third amendment agreement.
On October 22, 2025, which is subsequent to quarter-end, we completed a credit tenant lease (“CTL”) financing transaction by issuing a senior secured promissory note in the principal amount of approximately $195.9 million. The note bears interest at a fixed rate of 6.84% per annum and matures on November 15, 2034. The note is secured primarily by our interests under a long-term composite sublease agreement. The CTL debt is non-recourse to the Company and its subsidiaries, except for customary limited-recourse obligations under indemnity and guaranty agreements relating to environmental matters, lease-term compliance, and certain representations, warranties, and covenants. We used the net proceeds of the CTL financing to (i) repay in full approximately $35.3 million of outstanding indebtedness owed under the UACL Credit Agreement and (ii) prepay in part approximately $158.6 million of the outstanding revolving loans under the Revolving Credit Facility. After giving effect to the repayment, approximately $218.8 million remains outstanding under the Revolving Credit Facility.
As of the filing date of this Form 10-Q, the Company’s pro forma availability under our Revolving Credit Facility, after giving effect to the CTL financing, was approximately $275.1 million. Management expects available cash, operating cash flows, and access to credit markets to be sufficient to meet anticipated operating, investing, and financing requirements for at least the next twelve months.
Discussion of Cash Flows
At September 27, 2025, we had cash and cash equivalents of $27.4 million compared to $19.4 million at December 31, 2024. Operating activities provided $135.9 million in net cash, financing activities provided an additional $56.0 million, and we used $181.8 million in investing activities.
The $135.9 million in net cash provided by operations was primarily attributed to $(60.4) million of net losses, which reflects non-cash depreciation and amortization, noncash lease expense, impairment expenses, gains (losses) on marketable equity securities and equipment sales, amortization of debt issuance costs, stock-based compensation, provisions for credit losses, and a change in deferred income taxes totaling $210.1 million, net. Net cash provided by operating activities also reflects an aggregate increase in net working capital totaling $13.8 million. The primary drivers behind the increase in working capital were principal reductions in operating lease liabilities during the period, and increases in prepaid expenses and other receivables and prepaid income taxes, and decreases in accrued expenses, accruals for insurance and claims, and other current and long-term liabilities. These were partially offset by decreases in trade accounts receivable and other assets, and increases in trade accounts payable. Affiliate transactions increased net cash provided by operating activities by $3.4 million. The decrease in net cash resulted from an increase in accounts payable to affiliates of $4.3 million offset by an increase in accounts receivable from affiliates of $0.9 million.
The $181.8 million in net cash used in investing activities consisted of $191.3 million in capital expenditures, which was partially offset by $6.5 million in proceeds from the sale of equipment and $3.0 million in proceeds from the sale of marketable securities.
Financing activities provided $56.0 million in net cash during the thirty-nine weeks ended September 27, 2025. We had outstanding borrowings totaling $827.0 million at September 27, 2025 compared to $762.6 million at December 31, 2024. During the period, we made payments on term loan and equipment and real estate notes totaling $89.2 million, borrowed $80.3 million for new equipment and
30
had net borrowings on our revolving lines of credit totaling $73.3 million. During the period, we also paid cash dividends of $8.3 million and purchased $0.1 million of treasury stock.
Off Balance Sheet Arrangements
As of September 27, 2025, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources.
Critical Accounting Policies
A summary of critical accounting policies is presented in Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies,” of our Form 10-K for the year ended December 31, 2024. There have been no changes in our accounting policies during the thirteen weeks ended September 27, 2025.
Seasonality
Generally, demand for our value-added services delivered to existing customers increases during the second calendar quarter of each year as a result of the automotive industry’s spring selling season. Conversely, such demand generally decreases during the third quarter of each year due to the impact of scheduled OEM customer plant shutdowns in July for vacations and changeovers in production lines for new model years.
Our value-added services business is also impacted in the fourth quarter by plant shutdowns during the December holiday period. Prolonged adverse weather conditions, particularly in winter months, can also adversely impact margins due to productivity declines and related challenges meeting customer service requirements.
Additionally, our transportation services business, excluding dedicated transportation tied to specific customer supply chains, is generally impacted by decreased activity during the post-holiday winter season and, in certain states during hurricane season, because some shippers reduce their shipments and inclement weather impedes trucking operations or underlying customer demand.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have not been any material changes to the Company’s market risk during the thirteen weeks ended September 27, 2025. For additional information, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 4: CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of September 27, 2025. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives of ensuring that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. There is no assurance that our disclosure controls and procedures will operate effectively under all circumstances.
In connection with the preparation of our consolidated financial statements for the year ended December 31, 2024, we concluded there was a material weakness in our internal control over financial reporting resulting from errors in our financial statement preparation and the accounting for non-routine transactions that created changes within our business. The primary cause of the errors was the need for additional technical accounting resources to allow us to accurately record and properly present our financial statements and related disclosures. As discussed below, we are taking steps to remediate this material weakness in internal control over financial reporting; however, we are not yet able to determine whether the steps we are taking will fully remediate the material weakness.
Because of the material weakness in our internal control over financial reporting as previously disclosed, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 27, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level. Our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that, notwithstanding the material weakness in our internal control over financial reporting, the condensed consolidated financial statements in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.
Remediation and Plans for Remediation of Material Weakness
Management is currently in the process of planning for and implementing remediation efforts to address the identified material weakness. We plan on remediating our material weakness by enhancing our internal staff of accounting and financial reporting employees with
31
employees that have the requisite technical accounting knowledge. We have also expanded our use of external consulting firms to provide advisory support for technical accounting guidance. We further intend to design and implement controls to formalize review procedures around the financial close process with appropriate segregation of duties.
Management believes the steps outlined above will resolve the material weakness identified. We will continue to monitor and improve our internal controls over financial reporting. We may take additional steps or modify our plans for remediation to provide for reasonable assurance that we effectively maintain internal controls over financial reporting. We will consider the material weakness remediated after the applicable controls operate for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.
Changes in Internal Control over Financial Reporting
We are taking actions to remediate the material weakness relating to our internal controls over financial reporting, as described above. Except as otherwise described herein, there was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II – OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
For information regarding legal proceedings, see Note 15 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report.
ITEM 1A: RISK FACTORS
Risks Related to Our Business
We may be required to record additional impairment charges, which could materially affect our results of operations.
We review the carrying value of goodwill and indefinite lived intangible assets for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. We also review the carrying value of other long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Determining whether an impairment exists involves significant management judgment, including estimates of future cash flows, growth rates, discount rates, and market multiples. These estimates are inherently uncertain and subject to change based on general economic conditions, interest-rate environments, and the performance of individual reporting units.
During the third quarter of 2025, we recognized a non-cash impairment charge related to goodwill and certain customer-relationship intangible assets within our Intermodal segment. Additional impairments could be required in future periods if actual operating results or macroeconomic conditions differ from current expectations, if the discount rate used in our valuations increases, or if market capitalization declines below the carrying value of our net assets. Any such charge would reduce reported earnings and could adversely affect investor perceptions of our financial condition or stock price, even though it would not impact our cash flows.
Our use of non-GAAP financial measures could lead to investor confusion and may be subject to increased regulatory scrutiny.
We present certain non-GAAP financial measures in our earnings releases and other investor communications, including adjusted income from operations, adjusted operating margin, adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), and adjusted EBITDA margin. These measures are not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and should not be considered in isolation or as a substitute for GAAP results. While management believes these measures provide useful supplemental information for evaluating our operating performance and liquidity, they may exclude significant expenses or income items that are required to be recognized under GAAP. As a result, our non-GAAP measures may differ from similarly titled measures used by other companies and may not be comparable.
There is a risk that investors could misinterpret our non-GAAP measures, place undue reliance on them, or fail to understand their limitations. In addition, the Securities and Exchange Commission and other regulators have increased their focus on the use of non-GAAP financial measures, and changes in the interpretation of related rules or additional guidance could require us to modify, supplement, or discontinue the use of these measures. Any such developments, or any perception that our non-GAAP disclosures are misleading, could adversely affect investor confidence in our reported results, our stock price, or our reputation for financial transparency.
There have been no other material changes to our risk factors as previously disclosed in Item 1A to Part 1 of our Form 10-K for the fiscal year ended December 31, 2024.
ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4: MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5: OTHER INFORMATION
Trading Arrangements
None of the Company’s directors or officers
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ITEM 6: EXHIBITS
The exhibits listed on the Exhibit Index are furnished as part of this quarterly report on Form 10-Q.
Exhibit |
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Description |
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2.1 |
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Plan of Conversion (incorporated by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K filed on May 2, 2025) |
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3.1 |
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Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 2, 2025) |
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|
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3.2 |
|
Bylaws (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on May 2, 2025) |
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|
|
4.1 |
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Second Amended and Restated Registration Rights Agreement dated July 28, 2021 among the Registrant and the Moroun Family Holders (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed July 29, 2021) |
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4.2 |
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Joinder Agreement to Registration Rights Agreement dated August 1, 2023, among Registrant and the Swiftsure Trust (incorporated by reference to Exhibit 4.1 to the Registrant’s Report on Form 8-K filed August 3, 2023) |
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|
10.1 |
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Credit Agreement dated as of April 29, 2022 among UTSI Finance, Inc., UTS Realty, LLC, the lenders party thereto, and Fifth Third Bank, N.A., as agent for the lenders (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed May 2, 2022) |
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10.2 |
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Confirmation of Transaction, dated April 29, 2022, between Fifth Third Bank, N.A. and UTSI Finance, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed May 2, 2022) |
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|
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10.3 |
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Second Amendment Agreement dated April 5, 2024 among Universal Management Services, Inc., certain of its affiliates identified therein as Borrowers, KeyBank National Association, and the Lenders party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed April 9, 2024) |
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|
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10.4 |
|
Credit and Security Agreement dated September 30, 2022 among UACL Logistics Holdings, LLC, certain of its affiliates identified therein as Borrowers, KeyBank National Association, and the Lenders party thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed October 3, 2022) |
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|
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10.5 |
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Form of Indemnification Agreement between the Registrant and each of its directors and executive officers with reporting obligations under Section 16 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed July 27, 2023) |
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31.1* |
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Chief Executive Officer certification, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002 |
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31.2* |
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Chief Financial Officer certification, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002 |
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32.1** |
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Chief Executive Officer and Chief Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 |
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101.INS* |
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Inline XBRL Instance Document |
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101.SCH* |
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Inline XBRL Schema Document |
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101.CAL* |
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Inline XBRL Calculation Linkbase Document |
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101.DEF* |
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Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB* |
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Inline XBRL Labels Linkbase Document |
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101.PRE* |
|
Inline XBRL Presentation Linkbase Document |
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104* |
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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
** Furnished herewith.
34
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
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Universal Logistics Holdings, Inc. |
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(Registrant) |
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Date: November 6, 2025 |
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By: |
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/s/ Tim Phillips |
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Tim Phillips Chief Executive Officer |
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Date: November 6, 2025 |
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By: |
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/s/ Jude Beres |
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Jude Beres Chief Financial Officer |
35
FAQ
What were ULH’s Q3 2025 results?
What caused the Q3 2025 loss for ULH (NASDAQ: ULH)?
How did ULH perform year-to-date in 2025?
What are ULH’s debt and liquidity highlights?
How did the intermodal segment impact results?
Did ULH declare a dividend?
How many ULH shares were outstanding?
