Universal Logistics Reports Record Q1, Declares Cash Dividend

Universal Logistics Holdings ULH opened 2021 with record first-quarter financial results, posting $415.2 million in operating revenue, an 8.6% year-over-year increase.

The transportation and logistics services company released its first-quarter financial results on Friday, reporting year-over-year increases in its truckload, logistics, dedicated services and brokerage segments.

"The year-over-year top-line revenue increase can be attributed to growth in four of the five service lines," Tim Phillips, Universal Logistics CEO, said during the company's earnings call on Friday.

"Dedicated services lead the way, growing over 50% on a year-over-year basis. Brokerage and value-added services also experienced double-digit growth, increasing 12.8% and 12%, respectively, compared to the same period last year, Phillips said. "Strong pricing also led to growth in our truckload services."

On a per-share basis, the company had net income of 80 cents per share during the first quarter, compared to 45 cents per share during the same period in 2020.  

Warren, Michigan-based Universal Logistics Holdings is an asset-light provider of customized transportation and logistics solutions in the U.S. and Mexico, Canada and Colombia. It offers truckload, brokerage, intermodal and dedicated services. 

Universal Logistics' operating revenue increased 3.6% year-over-year to $94.9 million during the first quarter.

"Our truckload segment is continuing to see metals and industrial rates increase, with volumes starting to step back towards pre-COVID levels on the open deck side," Phillips said. "Food and beverage and consumer goods should remain extremely strong and allow for considerable growth and opportunity." 

The number of truckloads decreased 4.6% to 72,744 in the first quarter compared to last year. The decrease was offset by a 7.1% increase in average operating revenue per load — $1,246 during the first quarter compared to $1,163 last year.

The company's average number of tractors dropped 7.5% to 1,317 during the quarter and the average length of haul fell 5.8% to 373 miles.

Revenue for dedicated services, which is part of the company's logistics segment, during the first quarter increased 51% to $47.9 million compared to the same period in 2020. 

"Continued strong demand for light-duty vehicles kept our contract logistics group busy into Q1, even though chip and parts shortages began to show an impact at the tail end of the quarter," Phillips said.

The brokerage segment increased 15.8% to $61.1 million compared to $52.8 million for the same period last year.

Universal Logistics' first-quarter brokerage load volumes decreased 20.8% to 32,885 compared to last year. The brokerage segment's operating revenue increased 42.4% on a year-over-year basis to $1,737 per load.

The intermodal segment's result decreased 6% to $103.7 million in the first quarter 2021, compared to $110.3 million for the same period last year.

The number of intermodal loads was 179,905 during the quarter, a 9% decrease compared to the same period last year. The average operating revenue per intermodal load was $461, a 6.4% decrease compared to 2019.

For the full-year 2021, Universal issued guidance for total operating revenues between $1.6 billion and $1.7 billion and an operating margin between 7% and 9%. 

Members of the Teamsters from the ports of Los Angeles and Long Beach have recently been protesting the company's alleged mistreatment of former employees.

In March, the National Labor Relations Board filed a complaint against Universal Logistics, citing the closure of the Universal Intermodal facility in Compton, California, after workers there voted to be represented by the Teamsters.

Universal Logistics did not address the protest during Thursday's earnings call, but said finding drivers remains a challenge.

"Nowhere is the landscape more competitive than recruiting qualified truck drivers," Phillips said. "To combat this we have structured a solid recruiting and retention strategy that includes increases to our driver wages and contractor payouts, onboarding new trucks to the company fleet and creating quality-of-life options to address the needs of the ever-changing workforce."

Universal Logistics also announced a cash dividend of $0.105 per share of common stock. The dividend is payable to shareholders by July 6.

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