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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2024

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: 0-51142

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Michigan

38-3640097

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

12755 E. Nine Mile Road

Warren, Michigan 48089

(Address, including Zip Code of Principal Executive Offices)

(586) 920-0100

(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

Common Stock, no par value

ULH

The NASDAQ Stock Market LLC

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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

 

☐

Accelerated filer

☒

 

 

 

 

Non-accelerated filer

 

☐

Smaller reporting company

☒

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

☐

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 May 6, 2024, was 26,317,326.

 

 

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Balance Sheets

(In thousands, except share data)

 

 

 

March 30,
2024

 

 

December 31,
2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

11,124

 

 

$

12,511

 

Marketable securities

 

 

11,762

 

 

 

10,772

 

Accounts receivable – net of allowance for credit losses of $9,803
   and $11,229, respectively

 

 

280,604

 

 

 

287,946

 

Contract assets

 

 

11,451

 

 

 

729

 

Other receivables

 

 

27,109

 

 

 

22,633

 

Prepaid expenses and other

 

 

23,932

 

 

 

30,171

 

Due from affiliates

 

 

1,143

 

 

 

710

 

Total current assets

 

 

367,125

 

 

 

365,472

 

Property and equipment – net of accumulated depreciation of $382,583 and
   $370,273, respectively

 

 

613,642

 

 

 

561,089

 

Operating lease right-of-use asset

 

 

82,687

 

 

 

87,208

 

Goodwill

 

 

170,730

 

 

 

170,730

 

Intangible assets – net of accumulated amortization of $139,312 and $134,514, respectively

 

 

56,497

 

 

 

61,296

 

Contract assets, net of current portion

 

 

85,790

 

 

 

—

 

Deferred income taxes

 

 

1,225

 

 

 

1,225

 

Other assets

 

 

6,905

 

 

 

6,503

 

Total assets

 

$

1,384,601

 

 

$

1,253,523

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

73,947

 

 

$

64,102

 

Current portion of long-term debt

 

 

73,461

 

 

 

70,689

 

Current portion of operating lease liabilities

 

 

23,373

 

 

 

29,998

 

Accrued expenses and other current liabilities

 

 

64,317

 

 

 

43,062

 

Insurance and claims

 

 

29,433

 

 

 

25,464

 

Due to affiliates

 

 

23,314

 

 

 

20,737

 

Income taxes payable

 

 

12,757

 

 

 

6,364

 

Total current liabilities

 

 

300,602

 

 

 

260,416

 

Long-term liabilities:

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

340,647

 

 

 

311,235

 

Operating lease liabilities, net of current portion

 

 

65,635

 

 

 

63,620

 

Deferred income taxes

 

 

90,846

 

 

 

79,567

 

Other long-term liabilities

 

 

2,925

 

 

 

6,487

 

Total long-term liabilities

 

 

500,053

 

 

 

460,909

 

Shareholders' equity:

 

 

 

 

 

 

Common stock, no par value. Authorized 100,000,000 shares; 26,317,738 and
 31,007,100 shares issued; 26,317,738 and 26,284,223 shares outstanding,
   respectively

 

 

26,318

 

 

 

31,008

 

Paid-in capital

 

 

4,939

 

 

 

5,103

 

Treasury stock, at cost; 0 and 4,722,877 shares

 

 

—

 

 

 

(96,840

)

Retained earnings

 

 

553,859

 

 

 

595,450

 

Accumulated other comprehensive (loss):

 

 

 

 

 

 

Interest rate swaps, net of income taxes of $659 and $457, respectively

 

 

1,957

 

 

 

1,350

 

Foreign currency translation adjustments

 

 

(3,127

)

 

 

(3,873

)

Total shareholders’ equity

 

 

583,946

 

 

 

532,198

 

Total liabilities and shareholders’ equity

 

$

1,384,601

 

 

$

1,253,523

 

See accompanying notes to consolidated financial statements.

2

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Income

(In thousands, except per share data)

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Operating revenues:

 

 

 

 

 

 

Truckload services

 

$

42,030

 

 

$

46,401

 

Brokerage services

 

 

59,614

 

 

 

68,673

 

Intermodal services

 

 

76,715

 

 

 

111,026

 

Dedicated services

 

 

88,316

 

 

 

85,232

 

Value-added services

 

 

225,232

 

 

 

126,064

 

Total operating revenues

 

 

491,907

 

 

 

437,396

 

Operating expenses:

 

 

 

 

 

 

Purchased transportation and equipment rent

 

 

124,633

 

 

 

156,085

 

Direct personnel and related benefits

 

 

140,805

 

 

 

139,092

 

Operating supplies and expenses

 

 

92,824

 

 

 

46,189

 

Commission expense

 

 

6,610

 

 

 

8,172

 

Occupancy expense

 

 

10,568

 

 

 

11,152

 

General and administrative

 

 

13,507

 

 

 

11,916

 

Insurance and claims

 

 

7,167

 

 

 

8,079

 

Depreciation and amortization

 

 

20,701

 

 

 

18,515

 

Total operating expenses

 

 

416,815

 

 

 

399,200

 

Income from operations

 

 

75,092

 

 

 

38,196

 

Interest income

 

 

218

 

 

 

752

 

Interest expense

 

 

(6,297

)

 

 

(5,727

)

Other non-operating income

 

 

1,104

 

 

 

15

 

Income before income taxes

 

 

70,117

 

 

 

33,236

 

Income tax expense

 

 

17,660

 

 

 

8,360

 

Net income

 

$

52,457

 

 

$

24,876

 

Earnings per common share:

 

 

 

 

 

 

Basic

 

$

1.99

 

 

$

0.95

 

Diluted

 

$

1.99

 

 

$

0.95

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

Basic

 

 

26,307

 

 

 

26,281

 

Diluted

 

 

26,328

 

 

 

26,314

 

Dividends declared per common share

 

$

0.105

 

 

$

0.105

 

 

See accompanying notes to consolidated financial statements.

 

3

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Comprehensive Income

(In thousands)

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Net Income

 

$

52,457

 

 

$

24,876

 

Other comprehensive income (loss):

 

 

 

 

 

 

Unrealized changes in fair value of interest rate swaps, net of income taxes of
   $202 and $(277), respectively

 

 

607

 

 

 

(820

)

Foreign currency translation adjustments

 

 

746

 

 

 

(89

)

Total other comprehensive income (loss)

 

 

1,353

 

 

 

(909

)

Total comprehensive income

 

$

53,810

 

 

$

23,967

 

 

 

 

 

 

 

 

 

See accompanying notes to consolidated financial statements.

 

4

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Cash Flows

(In thousands)

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

52,457

 

 

$

24,876

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

20,701

 

 

 

18,515

 

Noncash lease expense

 

 

7,510

 

 

 

7,593

 

Loss (gain) on marketable equity securities

 

 

(990

)

 

 

13

 

Gain on disposal of property and equipment

 

 

(85

)

 

 

(902

)

Amortization of debt issuance costs

 

 

241

 

 

 

189

 

Stock-based compensation

 

 

700

 

 

 

161

 

Provision for credit losses

 

 

(819

)

 

 

2,130

 

Deferred income taxes

 

 

11,279

 

 

 

—

 

Change in assets and liabilities:

 

 

 

 

 

 

Trade and other accounts receivable

 

 

3,578

 

 

 

12,840

 

Prepaid expenses and other assets

 

 

(89,883

)

 

 

(725

)

Principal reduction in operating lease liabilities

 

 

(7,703

)

 

 

(7,435

)

Accounts payable, accrued expenses, income taxes payable,
   insurance and claims and other current liabilities

 

 

41,313

 

 

 

15,377

 

Due to/from affiliates, net

 

 

2,143

 

 

 

(3,086

)

Other long-term liabilities

 

 

(3,561

)

 

 

(5,065

)

Net cash provided by operating activities

 

 

36,881

 

 

 

64,481

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(68,572

)

 

 

(31,336

)

Proceeds from the sale of property and equipment

 

 

202

 

 

 

1,588

 

Net cash used in investing activities

 

 

(68,370

)

 

 

(29,748

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from borrowing - revolving debt

 

 

114,785

 

 

 

—

 

Repayments of debt - revolving debt

 

 

(98,945

)

 

 

—

 

Proceeds from borrowing - term debt

 

 

47,091

 

 

 

15,949

 

Repayments of debt - term debt

 

 

(30,989

)

 

 

(16,914

)

Dividends paid

 

 

(2,762

)

 

 

(2,759

)

Net cash provided by (used in) financing activities

 

 

29,180

 

 

 

(3,724

)

Effect of exchange rate changes on cash and cash equivalents

 

 

922

 

 

 

(1,415

)

Net increase (decrease) in cash

 

 

(1,387

)

 

 

29,594

 

Cash and cash equivalents – beginning of period

 

 

12,511

 

 

 

47,181

 

Cash and cash equivalents – end of period

 

$

11,124

 

 

$

76,775

 

Supplemental cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

6,108

 

 

$

5,479

 

Cash paid for income taxes

 

$

159

 

 

$

1,477

 

 

See accompanying notes to consolidated financial statements.

5

 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Shareholders’ Equity

(In thousands, except per share data)

 

 

Common
stock

 

 

Paid-in
capital

 

 

Treasury
stock

 

 

Retained
earnings

 

 

Accumulated
other
comprehensive
income (loss)

 

 

Total

 

Balances – December 31, 2022

 

$

30,997

 

 

$

4,852

 

 

$

(96,706

)

 

$

513,589

 

 

$

(5,802

)

 

$

446,930

 

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

24,876

 

 

 

—

 

 

 

24,876

 

Comprehensive income (loss)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(909

)

 

 

(909

)

Dividends ($0.105 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,759

)

 

 

—

 

 

 

(2,759

)

Stock based compensation

 

 

6

 

 

 

155

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

161

 

Balances – April 1, 2023

 

$

31,003

 

 

$

5,007

 

 

$

(96,706

)

 

$

535,706

 

 

$

(6,711

)

 

$

468,299

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances – December 31, 2023

 

$

31,008

 

 

$

5,103

 

 

$

(96,840

)

 

$

595,450

 

 

$

(2,523

)

 

$

532,198

 

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

52,457

 

 

 

—

 

 

 

52,457

 

Comprehensive income (loss)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,353

 

 

 

1,353

 

Dividends ($0.105 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,762

)

 

 

—

 

 

 

(2,762

)

Stock based compensation

 

 

33

 

 

 

667

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

700

 

Retirement of treasury stock

 

 

(4,723

)

 

 

(831

)

 

 

96,840

 

 

 

(91,286

)

 

 

—

 

 

 

—

 

Balances – March 30, 2024

 

$

26,318

 

 

$

4,939

 

 

$

-

 

 

$

553,859

 

 

$

(1,170

)

 

$

583,946

 

 

See accompanying notes to consolidated financial statements.

 

 

6

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements

(1)
Basis of Presentation

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, 2023 and 2022 and for each of the years in the three-year period ended December 31, 2023 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 March 30, 2024. These reclassifications, however, had no effect on reported consolidated net income, comprehensive income, earnings per common share, cash flows, total assets or shareholders’ equity as previously reported.

In January 2024, the Company’s value-added business began performing specialty project development services for certain customers. Contract assets represent amounts for which the Company has recognized revenue in excess of billings pursuant to the revenue recognition guidance. As of March 30, 2024 and December 31, 2023, contract assets associated with certain contracts with customers recognized over time are included as contract assets in the Company’s consolidated balance sheets. Contract assets associated with other contracts with customers were reclassified from prepaid expenses and other on the consolidated balance sheets to contract assets.

During the first quarter of 2024, the Company identified certain triggering events related to a component of the 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. The results of those procedures concluded that no impairments were present. After performing the evaluation, it was determined that a change in the estimated useful lives of certain definite lived intangible assets was appropriate and was adjusted during the period. The change resulted in additional amortization expense of $2.2 million recorded during the quarter ended March 30, 2024 ($1.7 million net of tax, or $0.06 per basic and diluted share).

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 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.

(2)
Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). The ASU expands disclosures related to a public entity's reportable segment and requires more enhanced information about significant segment expenses, including in interim periods. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, using a retrospective approach. Early adoption is permitted. We are currently evaluating the impact of the new standard, which is limited to financial statement disclosures.

In December 2023, the FASB issued 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.

7

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(3)
Revenue Recognition

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 provide customers with freight brokerage services by utilizing third-party transportation providers to move freight. Brokerage services also include full-service domestic and international freight forwarding and customs brokerage.

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 one year or less. They do not contain significant financing components. The Company recognizes revenue over the period transportation services are provided to the customer, including service performed as of the end of the reporting period for loads currently in-transit, in order to recognize the value that is transferred to a customer over the course of the transportation service.

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 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 speciality 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.

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. For the majority of our programs, 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 typically do not include financing components.

Beginning in 2024, value-added services also includes specialty project development services for customers. The specialty project development service is generally accounted for as a single unit of account (i.e., as a single performance obligation). Revenue is recognized over time as the Company continuously transfers control of the project to the customer. Because we transfer control of the project over time, we recognize revenue to the extent of our progress towards completion of our performance obligations. We generally 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 represents work performed, which corresponds with and thereby best represents the transfer of control to the customer. Revenue, including estimated fees or profits, is recorded proportionately as costs are incurred. Cost of operations consists of labor, materials, subcontractor costs, and other direct and indirect costs, and we include them in operating supplies and expenses on the consolidated statements of income. Due to the nature of the work we are required to perform under these types of contracts, estimating total revenue and cost at completion is complex, subject to many variables and requires significant judgment. Changes to the total estimated contract revenue or cost for a given project, either due to unexpected events or revisions to management’s initial estimates, are recognized in the period in which they are determined.

8

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(3)
Revenue Recognition – continued

The following table provides information related to contract balances associated with our contracts with customers (in thousands):

 

 

March 30,
2024

 

 

December 31,
2023

 

Contract assets

 

$

11,451

 

 

$

729

 

Contract assets, net of current portion

 

 

85,790

 

 

 

—

 

Total

 

$

97,241

 

 

$

729

 

We generally receive payment for performance obligations within 45 days of completion of transportation services and 65 days for completion of value-added services. As it relates to our specialty development project, we will receive payments in 120 equal monthly installments commencing the month following substantial completion of the project. Contract assets in the table above generally relates to revenue recognized in excess of billings for its specialty development project, as well as revenue in-transit at the end of the reporting period.

(4)
Marketable Securities

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 7.

The following table sets forth market value, cost basis, and unrealized gains on equity securities (in thousands):

 

 

March 30,
2024

 

 

December 31,
2023

 

Fair value

 

$

11,762

 

 

$

10,772

 

Cost basis

 

 

7,316

 

 

 

7,316

 

Unrealized gain

 

$

4,446

 

 

$

3,456

 

 

 

 

 

 

 

 

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities (in thousands):

 

 

March 30,
2024

 

 

December 31,
2023

 

Gross unrealized gains

 

$

5,074

 

 

$

4,124

 

Gross unrealized losses

 

 

(628

)

 

 

(668

)

Net unrealized gains

 

$

4,446

 

 

$

3,456

 

 

 

 

 

 

 

 

The Company did not sell marketable equity securities during either of the thirteen-week week periods ended March 30, 2024 or April 1, 2023.

During the thirteen-week week periods ended March 30, 2024 and April 1, 2023, our marketable equity securities portfolio experienced a net unrealized pre-tax gain (loss) in market value of approximately $990,000 and $(13,000), respectively, which was reported in other non-operating income for the period.

(5)
Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities are comprised of the following (in thousands):

 

 

 

March 30,
2024

 

 

December 31,
2023

 

 

 

 

 

 

 

 

Accrued payroll

 

$

18,234

 

 

$

18,047

 

Accrued payroll taxes

 

 

5,906

 

 

 

3,149

 

Accrued contract costs

 

 

17,160

 

 

 

—

 

Driver escrow liabilities

 

 

3,081

 

 

 

3,275

 

Legal settlements and claims

 

 

4,050

 

 

 

4,050

 

Commissions, other taxes and other

 

 

15,886

 

 

 

14,541

 

Total

 

$

64,317

 

 

$

43,062

 

 

9

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(6)
Debt

Debt is comprised of the following (in thousands):

 

 

 

Interest Rates
at March 30, 2024

 

March 30,
2024

 

 

December 31,
2023

 

Outstanding Debt:

 

 

 

 

 

 

 

 

Revolving Credit Facility (1) (2)

 

6.92%

 

$

37,774

 

 

$

21,934

 

UACL Credit Agreement (2)

 

 

 

 

 

 

 

 

Term Loan

 

7.17%

 

 

55,500

 

 

 

69,000

 

Revolver

 

7.17%

 

 

—

 

 

 

—

 

Equipment Financing (3)

 

2.25% to 7.27%

 

 

190,077

 

 

 

156,341

 

Real Estate Facility (4)

 

7.44%

 

 

135,036

 

 

 

139,170

 

Margin Facility (5)

 

6.42%

 

 

—

 

 

 

—

 

Unamortized debt issuance costs

 

 

 

 

(4,279

)

 

 

(4,521

)

 

 

 

 

 

414,108

 

 

 

381,924

 

Less current portion of long-term debt

 

 

 

 

73,461

 

 

 

70,689

 

Total long-term debt, net of current portion

 

 

 

$

340,647

 

 

$

311,235

 

(1) Our Revolving Credit Facility provides us with a revolving credit commitment of up to $400 million. We may borrow under the Revolving Credit Facility until maturity on September 30, 2027, and this indebtedness bears interest at index-adjusted SOFR, or a base rate, plus an applicable margin based on the Company’s leverage ratio. The Revolving Credit Facility is secured by a first-priority pledge of the capital stock of applicable subsidiaries, as well as first-priority perfected security interests in cash, deposits, accounts receivable, and selected other assets of the applicable borrowers. The Revolving Credit Facility includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions. At March 30, 2024, we were in compliance with all covenants under the facility, and $362.2 million was available for borrowing on the revolver.

(2) Our UACL Credit Agreement provides for maximum borrowings of $90 million in the form of an $80 million term loan and a $10 million revolver. The term loan matures on September 30, 2027 and is repaid in consecutive quarterly installments. The remaining term loan balance is due at maturity. We may borrow under the revolving credit facility until maturity on September 30, 2027. Borrowings bear interest at index-adjusted SOFR, or a base rate, plus an applicable margin based on the borrowers’ leverage ratio. The UACL Credit Agreement is secured by a first-priority pledge of the capital stock of applicable subsidiaries, as well as first-priority perfected security interest in cash, deposits, accounts receivable, and selected other assets of the applicable borrowers. The UACL Credit Agreement includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions. At March 30, 2024, we were in compliance with all covenants under the facility, and $10.0 million was available for borrowing on the revolver.

(3) Our Equipment Financing consists of a series of promissory notes issued by a wholly owned subsidiary. The equipment notes, which are secured by liens on specific titled vehicles, are generally payable in 60 monthly installments and bear interest at fixed rates ranging from 2.25% to 7.27%.

(4) Our Real Estate Facility facilitated a $165.4 million term loan, and the facility matures on April 29, 2032. Obligations under the facility are secured by first-priority mortgages on specific parcels of real estate owned by the Company, including all land and real property improvements, and first-priority assignments of rents and related leases of the loan parties. The credit agreement includes customary affirmative and negative covenants, and principal and interest are payable on the facility on a monthly basis, based on an annual amortization of 10%. The facility bears interest at Term SOFR, plus an applicable margin equal to 2.12%. At March 30, 2024, we were in compliance with all covenants under the facility.

10

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(6)
Debt – continued

(5) Our Margin Facility is a short-term line of credit secured by our portfolio of marketable securities. It bears interest at Term SOFR plus 1.10%. The amount available under the line of credit is based on a percentage of the market value of the underlying securities. At March 30, 2024, the maximum available borrowings under the line of credit were $5.7 million.

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 2.88%. The swap agreement has an effective date of April 29, 2022, a maturity date of April 30, 2027, and an amortizing notional amount of $80.8 million. At March 30, 2024, the fair value of the swap agreement was an asset of $2.6 million. Since the swap agreement qualifies for hedge accounting, the changes in fair value are recorded in other comprehensive income (loss), net of tax. See Note 7 for additional information pertaining to interest rate swaps.

(7)
Fair Value Measurements and Disclosures

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:

•
Level 1 — Quoted prices in active markets for identical assets or liabilities.
•
Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
•
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

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):

 

 

March 30,
2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Fair Value Measurement

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

21

 

 

$

—

 

 

$

—

 

 

$

21

 

Marketable securities

 

 

11,762

 

 

 

—

 

 

 

—

 

 

 

11,762

 

Interest rate swap

 

 

—

 

 

 

2,616

 

 

 

—

 

 

 

2,616

 

Total

 

$

11,783

 

 

$

2,616

 

 

$

—

 

 

$

14,399

 

 

 

 

December 31,
2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Fair Value Measurement

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

168

 

 

$

—

 

 

$

—

 

 

$

168

 

Marketable securities

 

 

10,772

 

 

 

—

 

 

 

—

 

 

 

10,772

 

Interest rate swap

 

 

—

 

 

 

1,807

 

 

 

—

 

 

 

1,807

 

Total

 

$

10,940

 

 

$

1,807

 

 

$

—

 

 

$

12,747

 

 

11

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(7)
Fair Value Measurements and Disclosures – continued

The valuation techniques used to measure fair value for the items in the tables above are as follows:

•
Cash equivalents – This category consists of money market funds which are listed as Level 1 assets and measured at fair value based on quoted prices for identical instruments in active markets.
•
Marketable securities – Marketable securities represent equity securities, which consist of common and preferred stocks, are actively traded on public exchanges and are listed as Level 1 assets. Fair value was measured based on quoted prices for these securities in active markets.
•
Interest rate swap – The fair value of our interest rate swap is determined using a methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash receipts (or payments) are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves. The fair value measurement also incorporates credit valuation adjustments to appropriately reflect both the Company’s nonperformance risk and the respective counterparty’s nonperformance risk.

Our Revolving Credit Facility, UACL Credit Agreement and Real Estate Facility 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, 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. The carrying value and estimated fair value of these promissory notes at March 30, 2024 is summarized as follows:

 

 

Carrying Value

 

 

Estimated Fair
Value

 

Equipment promissory notes

 

$

190,077

 

 

$

186,944

 

 

We have not elected the fair value option for any of our financial instruments.

(8)
Leases

As of March 30, 2024, 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 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 March 30, 2024, 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.

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.

12

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(8)
Leases – continued

The following table summarizes our lease costs for the thirteen weeks ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended March 30, 2024

 

 

 

With Affiliates

 

 

With Third Parties

 

 

Total

 

Lease cost

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

2,426

 

 

$

6,375

 

 

$

8,801

 

Short-term lease cost

 

 

17

 

 

 

2,735

 

 

 

2,752

 

Variable lease cost

 

 

242

 

 

 

1,207

 

 

 

1,449

 

Sublease income

 

 

—

 

 

 

—

 

 

 

—

 

Total lease cost

 

$

2,685

 

 

$

10,317

 

 

$

13,002

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirteen Weeks Ended April 1, 2023

 

 

 

With Affiliates

 

 

With Third Parties

 

 

Total

 

Lease cost

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

2,411

 

 

$

6,619

 

 

$

9,030

 

Short-term lease cost

 

 

7

 

 

 

4,029

 

 

 

4,036

 

Variable lease cost

 

 

199

 

 

 

599

 

 

 

798

 

Sublease income

 

 

—

 

 

 

—

 

 

 

—

 

Total lease cost

 

$

2,617

 

 

$

11,247

 

 

$

13,864

 

 

 

 

 

 

 

 

 

 

 

The following table summarizes other lease related information as of and for the thirteen week periods ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended March 30, 2024

 

 

 

With
Affiliates

 

 

With Third
Parties

 

 

Total

 

Other information

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of operating leases

 

$

2,439

 

 

$

6,545

 

 

$

8,984

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

$

2,271

 

 

$

343

 

 

$

2,614

 

Weighted-average remaining lease term (in years)

 

 

4.3

 

 

 

3.0

 

 

 

3.4

 

Weighted-average discount rate

 

 

7.7

%

 

 

5.5

%

 

 

6.2

%

 

 

 

 

 

 

 

 

 

 

 

 

April 1, 2023

 

 

 

With
Affiliates

 

 

With Third
Parties

 

 

Total

 

Other information

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of operating leases

 

$

2,382

 

 

$

6,499

 

 

$

8,881

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

$

—

 

 

$

12,188

 

 

$

12,188

 

Right-of-use asset change due to lease termination

 

$

(64

)

 

$

—

 

 

$

(64

)

Weighted-average remaining lease term (in years)

 

 

4.7

 

 

 

3.8

 

 

 

4.1

 

Weighted-average discount rate

 

 

7.1

%

 

 

5.2

%

 

 

5.8

%

 

13

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(8)
Leases – continued

Future minimum lease payments under these operating leases as of March 30, 2024, are as follows (in thousands):

 

 

With Affiliates

 

 

With Third Parties

 

 

Total

 

2024 (remaining)

 

$

7,183

 

 

$

19,188

 

 

$

26,371

 

2025

 

 

8,013

 

 

 

21,088

 

 

 

29,101

 

2026

 

 

5,481

 

 

 

17,201

 

 

 

22,682

 

2027

 

 

4,375

 

 

 

8,158

 

 

 

12,533

 

2028

 

 

4,189

 

 

 

1,333

 

 

 

5,522

 

Thereafter

 

 

3,672

 

 

 

—

 

 

 

3,672

 

Total required lease payments

 

$

32,913

 

 

$

66,968

 

 

$

99,881

 

Less amounts representing interest

 

 

 

 

 

 

 

 

(10,873

)

Present value of lease liabilities

 

 

 

 

 

 

 

$

89,008

 

 

 

 

 

 

 

 

 

 

 

 

(9)
Transactions with Affiliates

Matthew T. Moroun is Chair of our Board of Directors and his son, Matthew J. Moroun, is a member of our Board of Directors. 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 of Directors, 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 of Directors 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. Following is a schedule of cost incurred and included in operating expenses for services provided by affiliates for the thirteen weeks ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

 

 

 

 

 

 

 

Insurance

 

$

21,421

 

 

$

20,256

 

Real estate rent and related costs

 

 

3,508

 

 

 

3,266

 

Administrative support services

 

 

1,867

 

 

 

1,605

 

Truck fuel, maintenance and other operating costs

 

 

4,341

 

 

 

1,938

 

Contracted transportation services

 

 

36

 

 

 

113

 

Total

 

$

31,173

 

 

$

27,178

 

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 29 facilities from related parties. Our occupancy is based on either month-to-month or contractual, multi-year lease arrangements that are billed and paid monthly. Leasing properties from a related party affords us significant operating flexibility; however, we are not limited to such arrangements. See Note 8, “Leases” for further information regarding the cost of leased properties.

We purchase employee medical, workers’ compensation, property and casualty, cargo, warehousing and other general liability insurance from an insurance company controlled by our controlling shareholder. In our Consolidated Balance Sheets, we record our insured claims liability and the related recovery in insurance and claims, and other receivables. At March 30, 2024 and December 31, 2023, there were $16.1 million and $14.3 million, respectively, included in each of these accounts for insured claims.

14

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(9)
Transactions with Affiliates – continued

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 March 30, 2024 and December 31, 2023, amounts due to affiliates were $23.3 million and $20.7 million, respectively.

During the thirteen weeks ended March 30, 2024, we purchased trailers from an affiliate totaling $1.6 million. There were no such purchases made during the thirteen weeks ended April 1, 2023.

In June 2022, we executed a real estate contract with an affiliate to acquire a multi-building, office complex located in Warren, Michigan for $8.3 million. The purchase price was established by an independent, third-party appraisal. During 2022, the Company made an initial deposit of $200,000 and paid the balance at closing in the first quarter of 2023.

Services provided by Universal to Affiliates

We periodically assist our affiliates by providing selected transportation and logistics services in connection with their specific customer contracts or purchase orders. We may also lease facilities to our affiliates on an as-needed basis. Truck fueling and administrative expenses are presented net in operating expense. Following is a schedule of services provided to affiliates for the thirteen weeks and ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contracted transportation services

 

$

230

 

 

$

102

 

Facilities and related support

 

 

660

 

 

 

60

 

Total

 

$

890

 

 

$

162

 

At March 30, 2024 and December 31, 2023, amounts due from affiliates were $1.1 million and $0.7 million, respectively.

(10)
Stock Based Compensation

In February 2024, we granted 21,105 shares of restricted stock under our equity plan to certain employees, including 5,160 shares to our Chief Executive Officer and 5,223 shares to our Chief Financial Officer. The restricted stock awards have a grant date fair value of $31.96 per share, based on the closing price of our stock. The shares will vest in four equal installments on each March 15 in 2025, 2026, 2027, and 2028, subject to their continued employment with us.

In May 2023, we granted 3,549 shares of common stock under our equity plan to non-employee directors. These restricted stock awards have a fair value of $25.42 per share, based on the closing price of our stock on the grant date, and vested immediately.

In March 2023, we granted 34,611 shares of restricted stock under our equity plan to certain employees, including 9,134 shares to our Chief Executive Officer and 8,441 shares to our Chief Financial Officer. The restricted stock awards have a grant date fair value of $27.59 per share, based on the closing price of our stock. The shares will vest in four equal installments on each March 15 in 2024, 2025, 2026, and 2027, subject to their continued employment with us.

In September 2021, we granted 2,355 shares of restricted stock under our equity plan to one of our employees. This restricted stock award has a fair value of $20.46 per share, based on the closing price of our stock on the grant date. The shares will vest in five equal increments on each August 9 in 2022, 2023, 2024, 2025 and 2026, subject to continued employment with us.

In February 2020, we granted 5,000 shares of restricted stock under our equity plan to our Chief Financial Officer. This restricted stock award has a fair value of $17.74 per share, based on the closing price of our stock on the grant date. The shares vested on February 20, 2024.

In January 2020, we granted 60,000 shares of restricted stock under our equity plan to our Chief Executive Officer. This restricted stock award has a fair value of $18.82 per share, based on the closing price of our stock on the grant date. The shares will vest in installments of 20,000 shares on January 10, 2024 and January 10, 2026, and installments of 10,000 shares on January 10, 2027 and January 10, 2028, subject to his continued employment with us.

A grantee’s vesting of restricted stock awards may be accelerated under certain conditions, including retirement.

15

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(10)
Stock Based Compensation – continued

The following table summarizes the status of our non-vested shares and related information for the period indicated:

 

 

Shares

 

 

Weighted
Average Grant
Date Fair Value

 

Non-vested at January 1, 2024

 

 

100,458

 

 

$

21.76

 

Granted

 

 

21,105

 

 

$

31.96

 

Vested

 

 

(33,515

)

 

$

20.89

 

Forfeited

 

 

—

 

 

$

—

 

Balance at March 30, 2024

 

 

88,048

 

 

$

24.54

 

In the thirteen week periods ended March 30, 2024 and April 1, 2023, the total grant date fair value of vested shares recognized as compensation costs was $0.7 million and $0.2 million, respectively. As of March 30, 2024, there was approximately $2.2 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements. That cost is expected to be recognized on a straight-line basis over the remaining vesting period. As a result, we expect to recognize stock-based compensation expense of $0.4 million in 2025, $0.8 million in 2026, $0.6 million in 2027, and $0.4 million in 2028.

(11)
Earnings Per Share

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 ended March 30, 2024 and April 1, 2023, there were 21,011 and 33,348 weighted average non-vested shares of restricted stock, respectively, included in the denominator for the calculation of diluted earnings per share.

No shares of non-vested restricted stock were excluded from the calculation of diluted earnings per share due to anti-dilution during the thirteen weeks ended March 30, 2024 or April 1, 2023.

(12)
Dividends

On February 14, 2024, our Board of Directors declared a cash dividend of $0.105 per share of common stock, payable on April 1, 2024 to shareholders of record at the close of business on March 4, 2024. Declaration of future cash dividends is subject to final determination by the Board of Directors each quarter after its review of our financial condition, results of operations, capital requirements, any legal or contractual restrictions on the payment of dividends and other factors the Board of Directors deems relevant.

(13)
Segment Reporting

We report our financial results in four distinct reportable segments: contract logistics, intermodal, trucking, and company-managed brokerage, 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.

Operations aggregated in our contract logistics segment deliver value-added and/or dedicated transportation services to support in-bound logistics to original equipment manufacturers (OEMs) 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 aggregated in our trucking segment are associated with individual freight shipments coordinated primarily by our agents using a mix of owner-operators, company equipment and broker carriers. Our company-managed brokerage segment provides for the pick-up and delivery of individual freight shipments using broker carriers, coordinated by our company-managed operations. Other non-reportable segments are comprised of the Company’s subsidiaries that provide support services to other subsidiaries.

Separate balance sheets are not prepared by segment, and we do not provide asset information by segment to the chief operating decision maker.

16

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(13)
Segment Reporting – continued

The following tables summarize information about our reportable segments for the thirteen week periods ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Operating Revenues

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contract logistics

 

$

313,548

 

 

$

211,296

 

Intermodal

 

 

76,715

 

 

 

111,026

 

Trucking

 

 

69,655

 

 

 

79,715

 

Company-managed brokerage

 

 

31,000

 

 

 

33,956

 

Other

 

 

989

 

 

 

1,403

 

Total operating revenues

 

$

491,907

 

 

$

437,396

 

 

 

 

Eliminated Inter-segment Revenues

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contract logistics

 

$

71

 

 

$

301

 

Intermodal

 

 

437

 

 

 

965

 

Trucking

 

 

55

 

 

 

140

 

Company-managed brokerage

 

 

494

 

 

 

906

 

Total eliminated inter-segment revenues

 

$

1,057

 

 

$

2,312

 

 

 

 

Income from Operations

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contract logistics

 

$

81,466

 

 

$

27,781

 

Intermodal

 

 

(8,046

)

 

 

6,812

 

Trucking

 

 

3,669

 

 

 

3,789

 

Company-managed brokerage

 

 

(2,488

)

 

 

(375

)

Other

 

 

491

 

 

 

189

 

Total income from operations

 

$

75,092

 

 

$

38,196

 

 

(14)
Treasury Stock

During the first quarter of 2024, we retired 4,722,877 shares of our treasury stock. Upon retirement of the treasury shares, we allocated the excess of the repurchase price over the par value of shares acquired to both retained earnings and paid-in capital. The portion allocated to paid-in capital was determined by applying the average paid-in capital per share, and the remaining portion was recorded to retained earnings. There was no effect on the Company’s overall equity position due to the retirement of treasury shares.

The Company accounts for treasury stock using the cost method. As of March 30, 2024, there were no shares held in the treasury.

17

UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(15)
Commitments and Contingencies

Our principal commitments relate to long-term real estate leases and payment obligations to equipment vendors.

We are 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 our 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 March 30, 2024, approximately 32% of our employees were subject to collective bargaining agreements that are renegotiated periodically, 45% of which are subject to contracts that expire in 2024.

(16)
Subsequent Events

On April 25, 2024, our Board of Directors declared a cash dividend of $0.105 per share of common stock, payable on July 1, 2024 to shareholders of record at the close of business on June 3, 2024. Declaration of future cash dividends is subject to final determination by the Board of Directors each quarter after its review of our financial condition, results of operations, capital requirements, any legal or contractual restrictions on the payment of dividends and other factors the Board of Directors deems relevant.

18

 

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, 2023 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 whose subsidiaries provide a variety of customized transportation and logistics solutions throughout the United States and in Mexico, Canada and Colombia. Our operating subsidiaries provide customers 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 a network of agents who solicit freight business directly from shippers, and through company-managed facilities and full-service freight forwarding and customs house brokerage offices. 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 aggregated in our transportation segment are associated with individual freight shipments coordinated by our agents, company-managed terminals and specialized services operations. In contrast, operations aggregated in our logistics segment deliver value-added services and transportation services to specific customers on a dedicated basis, generally pursuant to contract terms of one year or longer. Our segments are distinguished by the amount of forward visibility we have in regard to 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, 2023 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.

19

 

While operating cash flows may be negatively impacted by inflation-driven cost increases, 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 ended March 30, 2024 and April 1, 2023, presented as a percentage of total operating revenues:

 

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Operating revenues:

 

 

 

 

 

 

Truckload services

 

 

8.5

%

 

 

10.6

%

Brokerage services

 

 

12.1

 

 

 

15.7

 

Intermodal services

 

 

15.6

 

 

 

25.4

 

Dedicated services

 

 

18.0

 

 

 

19.5

 

Value-added services

 

 

45.8

 

 

 

28.8

 

Total operating revenues

 

 

100.0

%

 

 

100.0

%

Results of Operations

The following table sets forth items derived from our consolidated statements of income for the thirteen weeks ended March 30, 2024 and April 1, 2023, presented as a percentage of operating revenues:

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Operating revenues:

 

 

100.0

%

 

 

100.0

%

Operating expenses:

 

 

 

 

 

 

Purchased transportation and equipment rent

 

 

25.3

 

 

 

35.7

 

Direct personnel and related benefits

 

 

28.6

 

 

 

31.8

 

Operating supplies and expenses

 

 

18.9

 

 

 

10.6

 

Commission expense

 

 

1.3

 

 

 

1.9

 

Occupancy expense

 

 

2.1

 

 

 

2.5

 

General and administrative

 

 

2.7

 

 

 

2.7

 

Insurance and claims

 

 

1.5

 

 

 

1.8

 

Depreciation and amortization

 

 

4.2

 

 

 

4.2

 

Total operating expenses

 

 

84.7

 

 

 

91.3

 

Income from operations

 

 

15.3

 

 

 

8.7

 

Interest and other non-operating expense, net

 

 

(1.0

)

 

 

(1.1

)

Income before income taxes

 

 

14.3

 

 

 

7.6

 

Income tax expense

 

 

3.6

 

 

 

1.9

 

Net income

 

 

10.7

%

 

 

5.7

%

 

20

 

Thirteen Weeks Ended March 30, 2024 Compared to Thirteen Weeks Ended April 1, 2023

Operating revenues. The overall increase in operating revenues was primarily due to an increase in our contract logistics segment revenues. This increase was partially offset by decreases in our transactional transportation-related services. The primary driver in our contract logistics segment was our progress towards the completion of deliverables on a significant new specialty development project in the first quarter 2024. This project is expected to be substantially complete by the end of 2024. Operating revenues included separately-identified fuel surcharges of $24.7 million in the first quarter 2024, compared to $33.9 million in the first quarter 2023. Also included in operating revenues were other accessorial charges such as detention, demurrage and storage, which totaled $8.5 million during the first quarter 2024 compared to $26.0 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 quarter 2024, transactional transportation-related service revenues decreased 21.1% 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 certain of our intermodal operations. The increase in the first quarter 2024 was due to an increase in the number of employee drivers in our intermodal business. 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 change was an increase in the expenses incurred in connection with the recently awarded contract logistics specialty development project that launched in the first quarter of 2024.

Commission expense. Commission expense decreased due to decreased revenue in our agency-based truckload business.

Occupancy expense. The decrease in occupancy expense was attributable to a decrease in building rents. This was partially offset by an increase in property taxes.

General and administrative. The increase in general and administrative expense was primarily due to an increase in salaries, wages, and benefits as well as professional fees.

Insurance and claims. The decrease in insurance and claims expense was primarily due to a decrease in auto liability claims expense.

Depreciation and amortization. The increase in depreciation and amortization expense resulted from a $0.6 million increase in depreciation expense and a $1.6 million increase in amortization expense.

Interest expense, net. The increase in net interest expense reflects an increase in our outstanding borrowings as well as an increase in interest rates on our outstanding borrowings. As of March 30, 2024, our outstanding borrowings were $418.4 million compared to $381.9 million at April 1, 2023.

Other non-operating income. Other non-operating income increased by $1.1 million in first quarter 2024 and includes a $1.0 million pre-tax holding gain on marketable securities due to changes in fair value recognized in income.

Income tax expense. Our effective income tax rate was 25.2% in both the first quarter 2024 and 2023. The increase in income taxes is primarily the result of an increase in taxable income.

21

 

Segment Financial Results

We report our financial results in four distinct reportable segments: contract logistics, intermodal, trucking, and company-managed brokerage, 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 weeks ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

 

Percent Change in Dollar Amount

 

(Dollars in millions)

 

$

 

 

%

 

 

$

 

 

%

 

 

%

 

Operating revenues

 

$

491,907

 

 

 

100.0

%

 

$

437,396

 

 

 

100.0

%

 

 

12.5

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation and equipment rent

 

 

124,633

 

 

 

25.3

 

 

 

156,085

 

 

 

35.7

 

 

 

(20.2

)

Direct personnel and related benefits

 

 

140,805

 

 

 

28.6

 

 

 

139,092

 

 

 

31.8

 

 

 

1.2

 

Operating supplies and expenses

 

 

92,824

 

 

 

18.9

 

 

 

46,189

 

 

 

10.6

 

 

 

101.0

 

Commission expense

 

 

6,610

 

 

 

1.3

 

 

 

8,172

 

 

 

1.9

 

 

 

(19.1

)

Occupancy expense

 

 

10,568

 

 

 

2.1

 

 

 

11,152

 

 

 

2.5

 

 

 

(5.2

)

General and administrative

 

 

13,507

 

 

 

2.7

 

 

 

11,916

 

 

 

2.7

 

 

 

13.4

 

Insurance and claims

 

 

7,167

 

 

 

1.5

 

 

 

8,079

 

 

 

1.8

 

 

 

(11.3

)

Depreciation and amortization

 

 

20,701

 

 

 

4.2

 

 

 

18,515

 

 

 

4.2

 

 

 

11.8

 

Total operating expenses

 

 

416,815

 

 

 

84.7

 

 

 

399,200

 

 

 

91.3

 

 

 

4.4

 

Income from operations

 

 

75,092

 

 

 

15.3

 

 

 

38,196

 

 

 

8.7

 

 

 

96.6

 

Interest income (expense), net

 

 

(6,079

)

 

 

(1.2

)

 

 

(4,975

)

 

 

(1.1

)

 

 

22.2

 

Other non-operating income

 

 

1,104

 

 

 

0.2

 

 

 

15

 

 

 

0.0

 

 

 

7,260.0

 

Income before income taxes

 

 

70,117

 

 

 

14.3

 

 

 

33,236

 

 

 

7.6

 

 

 

111.0

 

Income tax expense

 

 

17,660

 

 

 

3.6

 

 

 

8,360

 

 

 

1.9

 

 

 

111.2

 

Net income

 

$

52,457

 

 

 

10.7

%

 

$

24,876

 

 

 

5.7

%

 

 

110.9

%

 

Thirteen Weeks Ended March 30, 2024 Compared to Thirteen Weeks Ended April 1, 2023

In the contract logistics segment, which includes our value-added and dedicated services, operating revenues increased 48.4%. The primary driver in our contract logistics segment was our progress towards the completion of deliverables on a significant new specialty development project in the first quarter 2024. This project is expected to be substantially complete by the end of 2024. During the full-year 2024, we expect to recognize $228.0 million of total operating revenues on this program, of which $95.3 million was recognized in the first quarter of 2024. At the end of the first quarter 2024, we managed 71 value-added programs compared to 65 at the end of the first quarter 2023. Included in contract logistics segment revenues for the thirteen weeks ended March 30, 2024, were $8.6 million in separately identified fuel surcharges from dedicated transportation services, compared to $9.7 million in the same period last year. Income from operations increased $53.7 million and operating margin, as a percentage of revenue was 26.0% for the first quarter 2024, compared to 13.1% in the first quarter 2023.

Operating revenues in the intermodal segment decreased 30.9% primarily due to a decrease in the number of loads hauled. Included in intermodal segment revenues for the first quarter 2024 were $10.7 million in separately identified fuel surcharges, compared to $17.1 million in the same period last year. Intermodal segment revenues also include other accessorial charges such as detention, demurrage and storage, which totaled $8.5 million during the first quarter 2024 compared to $26.0 million in the first quarter 2023. Load volumes decreased 14.1% on a year-over-year basis. As a percentage of revenue, operating margin in the intermodal segment for the first quarter 2024 was (10.5)%, compared to 6.1% one year earlier.

In the trucking segment, operating revenues decreased 12.6% primarily due to decreases in the average revenue per load, excluding fuel surcharges, and in the number of loads hauled. First quarter 2024 trucking segment revenues included $28.6 million of brokerage services compared to $34.7 million during the same period last year. Also included in our trucking segment revenues were $5.4 million in separately identified fuel surcharges during the first quarter 2024 compared to $7.2 million in fuel surcharges in the first quarter 2023. On a year-over-year basis, the average operating revenue per load, excluding fuel surcharges, decreased 6.2% while load volumes declined 7.1%. As a percentage of revenue, operating margin in the trucking segment for the thirteen weeks ended March 30, 2024, was 5.3% compared to 4.8% for the thirteen weeks ended April 1, 2023.

22

 

Operating revenues in the company-managed brokerage segment decreased 8.7% primarily due to a decrease in the average operating revenue per load. On a year-over-year basis, average operating revenue per load in the company-managed brokerage segment decreased 12.2%. As a percentage of revenue, operating margin for the first quarter 2024 was (8.0)% compared to (1.1)% during the same period last year.

Liquidity and Capital Resources

Our primary sources of liquidity are funds generated by operations, loans and extensions of credit under our credit facilities, on margin against our marketable securities and from installment notes, and proceeds from the sales of marketable securities. We use secured asset lending to fund a substantial portion of purchases of tractors, trailers and material handling equipment.

We employ a flexible operating strategy which we believe lowers our capital expenditure requirements. In general, our facilities used in our value-added services are leased on terms that are either substantially matched to our customer’s contracts, are month-to-month or are provided to us by our customers. We also utilize owner-operators and third-party carriers to provide a significant portion of our transportation and specialized services. A significant portion of the tractors and trailers used in our business are provided by our owner-operators. In addition, our use of agents reduces our overall need for large terminals. As a result, our capital expenditure requirements are limited in comparison to most large transportation and logistics service providers, which maintain significant properties and sizable fleets of owned tractors and trailers.

During the thirteen weeks ended March 30, 2024, our capital expenditures totaled $68.6 million. These expenditures primarily consisted of transportation equipment and investments in support of our value-added service operations. Our flexible business model depends somewhat on the customized solutions we implement for specific customers. As a result, our capital expenditures will depend on specific new contracts and the overall age and condition of our owned transportation equipment. Through the remainder of 2024, we expect our capital expenditures to be in the range of $245 million to $260 million. We expect to make these capital expenditures for the acquisition of transportation equipment, to support new and existing value-added service operations, to expand our owned terminal network, and for improvements to our existing terminal yard and container facilities.

We have a cash dividend policy that anticipates a regular dividend of $0.42 per share of common stock, payable in quarterly increments of $0.105 per share of common stock. After considering the regular quarterly dividends made during the year, the Board of Directors also evaluates the potential declaration of an annual special dividend payable in the first quarter of each year. The Board of Directors did not declare a special dividend in the first quarter of 2024. On April 25, 2024, our Board of Directors did declare the regular quarterly cash dividend of $0.105 per share of common stock payable July 1, 2024 to shareholders of record at the close of business on June 3, 2024. During the year ended December 31, 2023, we paid a total of $0.42 per common share, or $11.0 million. Future dividend policy and the payment of dividends, if any, will be determined by the Board of Directors in light of circumstances then existing, including our earnings, financial condition and other factors deemed relevant by the Board of Directors.

We continually evaluate our liquidity requirements and capital structure in light of our operating needs, growth initiatives and capital resources. The availability of financing or equity capital will depend upon our financial condition and results of operations as well as prevailing market conditions. If such additional borrowing, lease financing, or equity capital is not available at the time we need it, then we may need to borrow more under the Revolving Credit Facility (if not then fully drawn), extend the maturity of then-outstanding debt, or rely on alternative financing arrangements. There can be no assurance that we will be able to obtain additional debt under our existing financial arrangements to satisfy our ongoing capital requirements. However, we believe that our existing liquidity and sources of capital are sufficient to support our operations over the next 12 months.

We also continually evaluate business development opportunities, including potential acquisitions that fit our strategic plans. There can be no assurance that we will identify any opportunities that fit our strategic plans or will be able to execute any such opportunities on terms acceptable to us. Depending on prospective consideration to be paid for an acquisition, any such opportunities would be financed first from available cash and cash equivalents and availability of borrowings under our credit facilities.

Revolving Credit, Promissory Notes and Term Loan Agreements

Our Revolving Credit Facility provides for a $400 million revolver at a variable rate of interest based on index-adjusted SOFR or a base rate and matures on September 30, 2027. The Revolving Credit Facility, which is secured by cash, deposits, accounts receivable, and selected other assets of the applicable borrowers, includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions. Our Revolving Credit Facility includes an accordion feature which allows us to increase availability by up to $200 million upon our request. At March 30, 2024, we were in compliance with all its covenants, and $362.2 million was available for borrowing.

23

 

Our UACL Credit Agreement provides for maximum borrowings of $90 million in the form of an $80 million term loan and a $10 million revolver at a variable rate of interest based on index-adjusted SOFR or a base rate and matures on September 30, 2027. The UACL Credit Agreement, which is secured by cash, deposits, accounts receivable, and selected other assets of the applicable borrowers, includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions. Our UACL Credit Agreement includes an accordion feature which allows us to increase availability by up to $30 million upon our request. At March 30, 2024, we were in compliance with all its covenants, and $10.0 million was available for borrowing.

A wholly owned subsidiary issued a series of promissory notes in order to finance transportation equipment. The notes are secured by liens on specific titled vehicles, are generally payable in 60 monthly installments and bear interest at fixed rates ranging from 2.25% to 7.27%.

Certain wholly owned subsidiaries entered into a $165.4 million term loan facility to repay outstanding balances under a then-existing term loan and certain other real estate notes. The facility matures on April 29, 2032 and is secured by first-priority mortgages on specific parcels of real estate owned by the Company, including all land and real property improvements, and first-priority assignments of rents and related leases of the loan parties. The facility includes customary affirmative and negative covenants, and principal and interest is payable on the facility on a monthly basis, based on an annual amortization of 10%. The facility bears interest at Term SOFR, plus an applicable margin equal to 2.12%. At March 30, 2024, we were in compliance with all covenants under the facility.

We also maintain a short-term line of credit secured by our portfolio of marketable securities. It bears interest at Term SOFR plus 1.10%. The amount available under the margin facility is based on a percentage of the market value of the underlying securities. We did not have any amounts advanced against the line as of March 30, 2024, and the maximum available borrowings were $5.7 million.

Discussion of Cash Flows

At March 30, 2024, we had cash and cash equivalents of $11.1 million compared to $12.5 million at December 31, 2023. Operating activities provided $36.9 million in net cash, financing activities provided an additional $29.2 million, and we used $68.4 million in investing activities.

The $36.9 million in net cash provided by operations was primarily attributed to $52.5 million of net income, which reflects non-cash depreciation and amortization, noncash lease expense, gains on marketable equity securities, gains on equipment sales, amortization of debt issuance costs, stock-based compensation, provisions for credit losses totaling, and a change in deferred income taxes totaling $38.5 million, net. Net cash provided by operating activities also reflects an aggregate increase in net working capital totaling $54.1 million. The primary drivers behind the increase in working capital were principal reductions in operating lease liabilities during the period, increases in contract assets and other receivables, and a decrease in other long-term liabilities. These were partially offset by a decrease in trade accounts receivable and increases in trade accounts payable, accrued expenses and other current liabilities, accruals for insurance and claims, and in income taxes payable. Affiliate transactions increased net cash provided by operating activities by $2.1 million. The increase in net cash resulted from an increase in accounts payable to affiliates of $2.5 million, offset by an increase in accounts receivable from affiliates of $0.4 million.

The $68.4 million in net cash used in investing activities consisted of $68.6 million in capital expenditures, which was partially offset by $0.2 million in proceeds from the sale of equipment.

Financing activities provided $29.2 million in net cash during the thirteen weeks ended March 30, 2024. We had outstanding borrowings totaling $418.4 million at March 30, 2024 compared to $386.4 million at December 31, 2023. During the period, we made payments on term loan and equipment and real estate notes totaling $31.0 million, borrowed $47.1 million for new equipment and had net borrowings on our revolving lines of credit totaling $15.8 million. During the period, we also paid cash dividends of $2.8 million.

Off Balance Sheet Arrangements

None.

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, 2023. There have been no changes in our accounting policies during the thirteen weeks ended March 30, 2024.

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.

24

 

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 March 30, 2024. For additional information, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

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 March 30, 2024. 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, 2023, we concluded there was a material weakness in our internal control over financial reporting to identify potential data-entry errors related to our contracted rates and quantities and their associated invoices and amounts recorded as unbilled revenue. 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 March 30, 2024, 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.

Management’s Remediation Efforts

Starting in 2024, we commenced measures to remediate the identified material weakness. Those remediation measures are ongoing and include the following:

•
Modifying our applicable policies and procedures for timely review and approval of contracted rates that are entered into the system;
•
adding monitoring controls that require a secondary and tertiary review of all contracted rates entered into the system to ensure they are reviewed timely and entered accurately; and
•
establishing a reserve on receivables that are within customer pay terms based upon history of rate corrections; and

While we believe that these efforts will improve our internal control over financial reporting, the implementation of these measures is ongoing and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles.

We believe we are making progress toward achieving the effectiveness of our internal controls and disclosure controls. The actions that we are taking are subject to ongoing senior management review, as well as audit committee oversight. We will not be able to conclude whether the steps we are taking will fully remediate the material weakness in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of their effectiveness. We may also conclude that additional measures may be required to remediate the material weakness in our internal control over financial reporting, which may necessitate additional implementation and evaluation time. We will continue to assess the effectiveness of our internal control over financial reporting and take steps to remediate the known material weaknesses expeditiously.

25

 

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.

26

 

PART II – OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

For information regarding legal proceedings, see Note 14 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report.

ITEM 1A: RISK FACTORS

There have been no 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, 2023.

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 adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended March 30, 2024, as such terms are defined under Item 408(a) of Regulation S-K.

27

 

ITEM 6: EXHIBITS

The exhibits listed on the Exhibit Index are furnished as part of this quarterly report on Form 10-Q.

 

Exhibit
No.

 

Description

 

 

 

3.1

 

Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1 filed on November 15, 2004)

 

 

 

3.2

 

Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3(i)-1 and 3(i)-2 to the Registrant’s Current Report on Form 8-K filed on November 1, 2012)

 

 

 

3.3

 

Certificate of Amendment to Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 2, 2016)

 

 

 

3.4

 

Sixth Amended and Restated Bylaws, effective February 14, 2024 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 15, 2024)

 

 

 

4.1

 

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)

 

 

 

4.2

 

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)

 

 

 

10.1

 

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)

 

 

 

10.2

 

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)

 

 

 

10.3

 

First Amendment Agreement dated September 30, 2022 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 October 3, 2022)

 

 

 

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)

 

 

 

10.5

 

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)

 

 

 

31.1*

 

Chief Executive Officer certification, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002

 

 

 

31.2*

 

Chief Financial Officer certification, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002

 

 

 

32.1**

 

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

 

 

 

101.INS*

 

Inline XBRL Instance Document

 

 

 

101.SCH*

 

Inline XBRL Schema Document

 

 

 

101.CAL*

 

Inline XBRL Calculation Linkbase Document

 

 

 

101.DEF*

 

Inline XBRL Taxonomy Extension Definition Linkbase Document

 

 

 

101.LAB*

 

Inline XBRL Labels Linkbase Document

 

 

 

101.PRE*

 

Inline XBRL Presentation Linkbase Document

 

 

 

104*

 

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

 

 

* Filed herewith.

** Furnished herewith.

28

 

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.

 

 

 

 

Universal Logistics Holdings, Inc.

 

 

 

(Registrant)

 

 

 

 

Date: May 9, 2024

 

By:

/s/ Tim Phillips

 

 

 

Tim Phillips

Chief Executive Officer

 

 

 

 

Date: May 9, 2024

 

By:

/s/ Jude Beres

 

 

 

Jude Beres

Chief Financial Officer

 

29

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, Tim Phillips, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Universal Logistics Holdings, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2024

 

 

/s/ Tim Phillips

 

Tim Phillips

 

Chief Executive Officer

 

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, Jude Beres, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Universal Logistics Holdings, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2024

 

 

/s/ Jude Beres

 

Jude Beres

 

Chief Financial Officer

 

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report, or the Report, of Universal Logistics Holdings, Inc., or the Company, on Form 10-Q for the period ended March 30, 2024, as filed with the Securities and Exchange Commission on the date hereof, each of the undersigned, Tim Phillips, as Chief Executive Officer of the Company, and Jude Beres, as Chief Financial Officer of the Company, each certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, respectively, that (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2024

 

 

/s/ Tim Phillips

 

Tim Phillips

 

Chief Executive Officer

 

 

 

/s/ Jude Beres

 

Jude Beres

 

Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

v3.24.1.u1
Document and Entity Information - shares
 3 Months Ended
Mar. 30, 2024
May 06, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 30, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q1  
Trading Symbol ULH  
Entity Registrant Name UNIVERSAL LOGISTICS HOLDINGS, INC.  
Entity Central Index Key 0001308208  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Shell Company false  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity File Number 0-51142  
Entity Tax Identification Number 38-3640097  
Entity Address, Address Line One 12755 E. Nine Mile Road  
Entity Address, City or Town Warren  
Entity Address, State or Province MI  
Entity Address, Postal Zip Code 48089  
City Area Code 586  
Local Phone Number 920-0100  
Title of 12(b) Security Common Stock, no par value  
Security Exchange Name NASDAQ  
Document Quarterly Report true  
Document Transition Report false  
Entity Incorporation, State or Country Code MI  
Entity Common Stock, Shares Outstanding   26,317,326
v3.24.1.u1
Unaudited Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 11,124 $ 12,511
Marketable securities 11,762 10,772
Accounts receivable - net of allowance for credit losses of $9,803 and $11,229, respectively 280,604 287,946
Contract assets 11,451 729
Other receivables 27,109 22,633
Prepaid expenses and other $ 23,932 $ 30,171
Other Receivable, after Allowance for Credit Loss, Current, Related Party, Type [Extensible Enumeration] Affiliated Entity [Member] Affiliated Entity [Member]
Total current assets $ 367,125 $ 365,472
Property and equipment - net of accumulated depreciation of $$382,583 and $370,273, respectively 613,642 561,089
Operating lease right-of-use asset 82,687 87,208
Goodwill 170,730 170,730
Intangible assets - net of accumulated amortization of $139,312 and $134,514, respectively 56,497 61,296
Contract assets, net of current portion 85,790  
Deferred income taxes 1,225 1,225
Other assets 6,905 6,503
Total assets 1,384,601 1,253,523
Current liabilities:    
Accounts payable 73,947 64,102
Current portion of long-term debt 73,461 70,689
Current portion of operating lease liabilities 23,373 29,998
Accrued expenses and other current liabilities 64,317 43,062
Insurance and claims 29,433 25,464
Due to affiliates $ 23,300 $ 20,700
Other Liability, Current, Related Party, Type [Extensible Enumeration] Affiliated Entity [Member] Affiliated Entity [Member]
Income taxes payable $ 12,757 $ 6,364
Total current liabilities 300,602 260,416
Long-term liabilities:    
Long-term debt, net of current portion 340,647 311,235
Operating lease liabilities, net of current portion 65,635 63,620
Deferred income taxes 90,846 79,567
Other long-term liabilities 2,925 6,487
Total long-term liabilities 500,053 460,909
Shareholders' equity:    
Common stock, no par value. Authorized 100,000,000 shares; 26,317,738 and 31,007,100 shares issued; 26,317,738 and 26,284,223 shares outstanding, respectively 26,318 31,008
Paid-in capital 4,939 5,103
Treasury stock, at cost; 0 and 4,722,877 shares   (96,840)
Retained earnings 553,859 595,450
Accumulated other comprehensive (loss):    
Interest rate swaps, net of income taxes of $659 and $457, respectively 1,957 1,350
Foreign currency translation adjustments (3,127) (3,873)
Total shareholders’ equity 583,946 532,198
Total liabilities and shareholders’ equity 1,384,601 1,253,523
Affiliated Entity [Member]    
Current assets:    
Due from affiliates 1,143 710
Current liabilities:    
Due to affiliates $ 23,314 $ 20,737
v3.24.1.u1
Unaudited Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Mar. 30, 2024
Dec. 31, 2023
Statement Of Financial Position [Abstract]    
Allowance for doubtful accounts $ 9,803 $ 11,229
Property and equipment, accumulated depreciation 382,583 370,273
Intangible assets, accumulated amortization $ 139,312 $ 134,514
Common stock, par value $ 0 $ 0
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 26,317,738 31,007,100
Common stock, shares outstanding 26,317,738 26,284,223
Treasury Stock, Common, Shares 0 4,722,877
Interest rate swaps, income taxes $ 659 $ 457
v3.24.1.u1
Unaudited Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Operating revenues:    
Total operating revenues $ 491,907 $ 437,396
Operating expenses:    
Purchased transportation and equipment rent 124,633 156,085
Direct personnel and related benefits 140,805 139,092
Operating supplies and expenses 92,824 46,189
Commission expense 6,610 8,172
Occupancy expense 10,568 11,152
General and administrative 13,507 11,916
Insurance and claims 7,167 8,079
Depreciation and amortization 20,701 18,515
Total operating expenses 416,815 399,200
Income from operations 75,092 38,196
Interest income 218 752
Interest expense (6,297) (5,727)
Other non-operating income 1,104 15
Income before income taxes 70,117 33,236
Income tax expense 17,660 8,360
Net income $ 52,457 $ 24,876
Earnings per common share:    
Basic $ 1.99 $ 0.95
Diluted $ 1.99 $ 0.95
Weighted average number of common shares outstanding:    
Basic 26,307 26,281
Diluted 26,328 26,314
Dividends declared per common share $ 0.105 $ 0.105
Truckload services [Member]    
Operating revenues:    
Total operating revenues $ 42,030 $ 46,401
Brokerage services [Member]    
Operating revenues:    
Total operating revenues 59,614 68,673
Intermodal services [Member]    
Operating revenues:    
Total operating revenues 76,715 111,026
Dedicated services [Member]    
Operating revenues:    
Total operating revenues 88,316 85,232
Value-added services [Member]    
Operating revenues:    
Total operating revenues $ 225,232 $ 126,064
v3.24.1.u1
Unaudited Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Statement Of Income And Comprehensive Income [Abstract]    
Net income $ 52,457 $ 24,876
Other comprehensive income (loss):    
Unrealized changes in fair value of interest rate swaps, net of income taxes of $202 and $(277), respectively 607 (820)
Foreign currency translation adjustments 746 (89)
Total other comprehensive income (loss) 1,353 (909)
Total comprehensive income $ 53,810 $ 23,967
v3.24.1.u1
Unaudited Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Statement Of Income And Comprehensive Income [Abstract]    
Unrealized changes in fair value of interest rate swaps, tax $ 202 $ (277)
v3.24.1.u1
Unaudited Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Cash flows from operating activities:    
Net income $ 52,457 $ 24,876
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 20,701 18,515
Noncash lease expense 7,510 7,593
Loss (gain) on marketable equity securities (990) 13
Gain on disposal of property and equipment (85) (902)
Amortization of debt issuance costs 241 189
Stock-based compensation 700 161
Provision for credit losses (819) 2,130
Deferred income taxes 11,279 0
Change in assets and liabilities:    
Trade and other accounts receivable 3,578 12,840
Prepaid expenses and other assets (89,883) (725)
Principal reduction in operating lease liabilities (7,703) (7,435)
Accounts payable, accrued expenses, income taxes payable, insurance and claims and other current liabilities 41,313 15,377
Due to/from affiliates, net 2,143 (3,086)
Other long-term liabilities (3,561) (5,065)
Net cash provided by operating activities 36,881 64,481
Cash flows from investing activities:    
Capital expenditures (68,572) (31,336)
Proceeds from the sale of property and equipment 202 1,588
Net cash used in investing activities (68,370) (29,748)
Cash flows from financing activities:    
Proceeds from borrowing - revolving debt 114,785 0
Repayments of debt - revolving debt (98,945) 0
Proceeds from borrowing - term debt 47,091 15,949
Repayments of debt - term debt (30,989) (16,914)
Dividends paid (2,762) (2,759)
Net cash provided by (used in) financing activities 29,180 (3,724)
Effect of exchange rate changes on cash and cash equivalents 922 (1,415)
Net increase (decrease) in cash (1,387) 29,594
Cash and cash equivalents – beginning of period 12,511 47,181
Cash and cash equivalents – end of period 11,124 76,775
Supplemental cash flow information:    
Cash paid for interest 6,108 5,479
Cash paid for income taxes $ 159 $ 1,477
v3.24.1.u1
Unaudited Consolidated Statements of Shareholders' Equity - USD ($)
$ in Thousands
Total
Common stock [Member]
Paid-in capital [Member]
Treasury stock [Member]
Retained earnings [Member]
Accumulated other comprehensive income (loss) [Member]
Balances at Dec. 31, 2022 $ 446,930 $ 30,997 $ 4,852 $ (96,706) $ 513,589 $ (5,802)
Net income 24,876       24,876  
Comprehensive income (loss) (909)         (909)
Dividends paid (2,759)       (2,759)  
Stock based compensation 161 6 155      
Balances at Apr. 01, 2023 468,299 31,003 5,007 (96,706) 535,706 (6,711)
Balances at Dec. 31, 2023 532,198 31,008 5,103 (96,840) 595,450 (2,523)
Net income 52,457       52,457  
Comprehensive income (loss) 1,353         1,353
Dividends paid (2,762)       (2,762)  
Stock based compensation 700 33 667      
Retirement of treasury stock   (4,723) (831) $ 96,840 (91,286)  
Balances at Mar. 30, 2024 $ 583,946 $ 26,318 $ 4,939   $ 553,859 $ (1,170)
v3.24.1.u1
Unaudited Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Statement Of Stockholders Equity [Abstract]    
Dividends paid per share $ 0.105 $ 0.105
v3.24.1.u1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Pay vs Performance Disclosure    
Net Income (Loss) $ 52,457 $ 24,876
v3.24.1.u1
Insider Trading Arrangements
 3 Months Ended
Mar. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
Rule10b51ArrModifiedFlag false
NonRule10b51ArrModifiedFlag false
v3.24.1.u1
Basis of Presentation
 3 Months Ended
Mar. 30, 2024
Accounting Policies [Abstract]  
Basis of Presentation
(1)
Basis of Presentation

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, 2023 and 2022 and for each of the years in the three-year period ended December 31, 2023 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 March 30, 2024. These reclassifications, however, had no effect on reported consolidated net income, comprehensive income, earnings per common share, cash flows, total assets or shareholders’ equity as previously reported.

In January 2024, the Company’s value-added business began performing specialty project development services for certain customers. Contract assets represent amounts for which the Company has recognized revenue in excess of billings pursuant to the revenue recognition guidance. As of March 30, 2024 and December 31, 2023, contract assets associated with certain contracts with customers recognized over time are included as contract assets in the Company’s consolidated balance sheets. Contract assets associated with other contracts with customers were reclassified from prepaid expenses and other on the consolidated balance sheets to contract assets.

During the first quarter of 2024, the Company identified certain triggering events related to a component of the 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. The results of those procedures concluded that no impairments were present. After performing the evaluation, it was determined that a change in the estimated useful lives of certain definite lived intangible assets was appropriate and was adjusted during the period. The change resulted in additional amortization expense of $2.2 million recorded during the quarter ended March 30, 2024 ($1.7 million net of tax, or $0.06 per basic and diluted share).

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 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.
v3.24.1.u1
Recent Accounting Pronouncements
 3 Months Ended
Mar. 30, 2024
Accounting Policies [Abstract]  
Recent Accounting Pronouncements
(2)
Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). The ASU expands disclosures related to a public entity's reportable segment and requires more enhanced information about significant segment expenses, including in interim periods. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, using a retrospective approach. Early adoption is permitted. We are currently evaluating the impact of the new standard, which is limited to financial statement disclosures.

In December 2023, the FASB issued 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.
v3.24.1.u1
Revenue Recognition
 3 Months Ended
Mar. 30, 2024
Revenue Recognition [Abstract]  
Revenue Recognition
(3)
Revenue Recognition

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 provide customers with freight brokerage services by utilizing third-party transportation providers to move freight. Brokerage services also include full-service domestic and international freight forwarding and customs brokerage.

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 one year or less. They do not contain significant financing components. The Company recognizes revenue over the period transportation services are provided to the customer, including service performed as of the end of the reporting period for loads currently in-transit, in order to recognize the value that is transferred to a customer over the course of the transportation service.

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 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 speciality 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.

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. For the majority of our programs, 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 typically do not include financing components.

Beginning in 2024, value-added services also includes specialty project development services for customers. The specialty project development service is generally accounted for as a single unit of account (i.e., as a single performance obligation). Revenue is recognized over time as the Company continuously transfers control of the project to the customer. Because we transfer control of the project over time, we recognize revenue to the extent of our progress towards completion of our performance obligations. We generally 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 represents work performed, which corresponds with and thereby best represents the transfer of control to the customer. Revenue, including estimated fees or profits, is recorded proportionately as costs are incurred. Cost of operations consists of labor, materials, subcontractor costs, and other direct and indirect costs, and we include them in operating supplies and expenses on the consolidated statements of income. Due to the nature of the work we are required to perform under these types of contracts, estimating total revenue and cost at completion is complex, subject to many variables and requires significant judgment. Changes to the total estimated contract revenue or cost for a given project, either due to unexpected events or revisions to management’s initial estimates, are recognized in the period in which they are determined.

(3)
Revenue Recognition – continued

The following table provides information related to contract balances associated with our contracts with customers (in thousands):

 

 

March 30,
2024

 

 

December 31,
2023

 

Contract assets

 

$

11,451

 

 

$

729

 

Contract assets, net of current portion

 

 

85,790

 

 

 

—

 

Total

 

$

97,241

 

 

$

729

 

We generally receive payment for performance obligations within 45 days of completion of transportation services and 65 days for completion of value-added services. As it relates to our specialty development project, we will receive payments in 120 equal monthly installments commencing the month following substantial completion of the project. Contract assets in the table above generally relates to revenue recognized in excess of billings for its specialty development project, as well as revenue in-transit at the end of the reporting period.
v3.24.1.u1
Marketable Securities
 3 Months Ended
Mar. 30, 2024
Investments, Debt And Equity Securities [Abstract]  
Marketable Securities
(4)
Marketable Securities

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 7.

The following table sets forth market value, cost basis, and unrealized gains on equity securities (in thousands):

 

 

March 30,
2024

 

 

December 31,
2023

 

Fair value

 

$

11,762

 

 

$

10,772

 

Cost basis

 

 

7,316

 

 

 

7,316

 

Unrealized gain

 

$

4,446

 

 

$

3,456

 

 

 

 

 

 

 

 

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities (in thousands):

 

 

March 30,
2024

 

 

December 31,
2023

 

Gross unrealized gains

 

$

5,074

 

 

$

4,124

 

Gross unrealized losses

 

 

(628

)

 

 

(668

)

Net unrealized gains

 

$

4,446

 

 

$

3,456

 

 

 

 

 

 

 

 

The Company did not sell marketable equity securities during either of the thirteen-week week periods ended March 30, 2024 or April 1, 2023.

During the thirteen-week week periods ended March 30, 2024 and April 1, 2023, our marketable equity securities portfolio experienced a net unrealized pre-tax gain (loss) in market value of approximately $990,000 and $(13,000), respectively, which was reported in other non-operating income for the period.
v3.24.1.u1
Accrued Expenses and Other Current Liabilities
 3 Months Ended
Mar. 30, 2024
Payables And Accruals [Abstract]  
Accrued Expenses and Other Current Liabilities
(5)
Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities are comprised of the following (in thousands):

 

 

 

March 30,
2024

 

 

December 31,
2023

 

 

 

 

 

 

 

 

Accrued payroll

 

$

18,234

 

 

$

18,047

 

Accrued payroll taxes

 

 

5,906

 

 

 

3,149

 

Accrued contract costs

 

 

17,160

 

 

 

—

 

Driver escrow liabilities

 

 

3,081

 

 

 

3,275

 

Legal settlements and claims

 

 

4,050

 

 

 

4,050

 

Commissions, other taxes and other

 

 

15,886

 

 

 

14,541

 

Total

 

$

64,317

 

 

$

43,062

 
v3.24.1.u1
Debt
 3 Months Ended
Mar. 30, 2024
Debt Disclosure [Abstract]  
Debt
(6)
Debt

Debt is comprised of the following (in thousands):

 

 

 

Interest Rates
at March 30, 2024

 

March 30,
2024

 

 

December 31,
2023

 

Outstanding Debt:

 

 

 

 

 

 

 

 

Revolving Credit Facility (1) (2)

 

6.92%

 

$

37,774

 

 

$

21,934

 

UACL Credit Agreement (2)

 

 

 

 

 

 

 

 

Term Loan

 

7.17%

 

 

55,500

 

 

 

69,000

 

Revolver

 

7.17%

 

 

—

 

 

 

—

 

Equipment Financing (3)

 

2.25% to 7.27%

 

 

190,077

 

 

 

156,341

 

Real Estate Facility (4)

 

7.44%

 

 

135,036

 

 

 

139,170

 

Margin Facility (5)

 

6.42%

 

 

—

 

 

 

—

 

Unamortized debt issuance costs

 

 

 

 

(4,279

)

 

 

(4,521

)

 

 

 

 

 

414,108

 

 

 

381,924

 

Less current portion of long-term debt

 

 

 

 

73,461

 

 

 

70,689

 

Total long-term debt, net of current portion

 

 

 

$

340,647

 

 

$

311,235

 

(1) Our Revolving Credit Facility provides us with a revolving credit commitment of up to $400 million. We may borrow under the Revolving Credit Facility until maturity on September 30, 2027, and this indebtedness bears interest at index-adjusted SOFR, or a base rate, plus an applicable margin based on the Company’s leverage ratio. The Revolving Credit Facility is secured by a first-priority pledge of the capital stock of applicable subsidiaries, as well as first-priority perfected security interests in cash, deposits, accounts receivable, and selected other assets of the applicable borrowers. The Revolving Credit Facility includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions. At March 30, 2024, we were in compliance with all covenants under the facility, and $362.2 million was available for borrowing on the revolver.

(2) Our UACL Credit Agreement provides for maximum borrowings of $90 million in the form of an $80 million term loan and a $10 million revolver. The term loan matures on September 30, 2027 and is repaid in consecutive quarterly installments. The remaining term loan balance is due at maturity. We may borrow under the revolving credit facility until maturity on September 30, 2027. Borrowings bear interest at index-adjusted SOFR, or a base rate, plus an applicable margin based on the borrowers’ leverage ratio. The UACL Credit Agreement is secured by a first-priority pledge of the capital stock of applicable subsidiaries, as well as first-priority perfected security interest in cash, deposits, accounts receivable, and selected other assets of the applicable borrowers. The UACL Credit Agreement includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions. At March 30, 2024, we were in compliance with all covenants under the facility, and $10.0 million was available for borrowing on the revolver.

(3) Our Equipment Financing consists of a series of promissory notes issued by a wholly owned subsidiary. The equipment notes, which are secured by liens on specific titled vehicles, are generally payable in 60 monthly installments and bear interest at fixed rates ranging from 2.25% to 7.27%.

(4) Our Real Estate Facility facilitated a $165.4 million term loan, and the facility matures on April 29, 2032. Obligations under the facility are secured by first-priority mortgages on specific parcels of real estate owned by the Company, including all land and real property improvements, and first-priority assignments of rents and related leases of the loan parties. The credit agreement includes customary affirmative and negative covenants, and principal and interest are payable on the facility on a monthly basis, based on an annual amortization of 10%. The facility bears interest at Term SOFR, plus an applicable margin equal to 2.12%. At March 30, 2024, we were in compliance with all covenants under the facility.

(6)
Debt – continued

(5) Our Margin Facility is a short-term line of credit secured by our portfolio of marketable securities. It bears interest at Term SOFR plus 1.10%. The amount available under the line of credit is based on a percentage of the market value of the underlying securities. At March 30, 2024, the maximum available borrowings under the line of credit were $5.7 million.

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 2.88%. The swap agreement has an effective date of April 29, 2022, a maturity date of April 30, 2027, and an amortizing notional amount of $80.8 million. At March 30, 2024, the fair value of the swap agreement was an asset of $2.6 million. Since the swap agreement qualifies for hedge accounting, the changes in fair value are recorded in other comprehensive income (loss), net of tax. See Note 7 for additional information pertaining to interest rate swaps.
v3.24.1.u1
Fair Value Measurements and Disclosures
 3 Months Ended
Mar. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Disclosures
(7)
Fair Value Measurements and Disclosures

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:

•
Level 1 — Quoted prices in active markets for identical assets or liabilities.
•
Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
•
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

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):

 

 

March 30,
2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Fair Value Measurement

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

21

 

 

$

—

 

 

$

—

 

 

$

21

 

Marketable securities

 

 

11,762

 

 

 

—

 

 

 

—

 

 

 

11,762

 

Interest rate swap

 

 

—

 

 

 

2,616

 

 

 

—

 

 

 

2,616

 

Total

 

$

11,783

 

 

$

2,616

 

 

$

—

 

 

$

14,399

 

 

 

 

December 31,
2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Fair Value Measurement

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

168

 

 

$

—

 

 

$

—

 

 

$

168

 

Marketable securities

 

 

10,772

 

 

 

—

 

 

 

—

 

 

 

10,772

 

Interest rate swap

 

 

—

 

 

 

1,807

 

 

 

—

 

 

 

1,807

 

Total

 

$

10,940

 

 

$

1,807

 

 

$

—

 

 

$

12,747

 

 

(7)
Fair Value Measurements and Disclosures – continued

The valuation techniques used to measure fair value for the items in the tables above are as follows:

•
Cash equivalents – This category consists of money market funds which are listed as Level 1 assets and measured at fair value based on quoted prices for identical instruments in active markets.
•
Marketable securities – Marketable securities represent equity securities, which consist of common and preferred stocks, are actively traded on public exchanges and are listed as Level 1 assets. Fair value was measured based on quoted prices for these securities in active markets.
•
Interest rate swap – The fair value of our interest rate swap is determined using a methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash receipts (or payments) are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves. The fair value measurement also incorporates credit valuation adjustments to appropriately reflect both the Company’s nonperformance risk and the respective counterparty’s nonperformance risk.

Our Revolving Credit Facility, UACL Credit Agreement and Real Estate Facility 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, 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. The carrying value and estimated fair value of these promissory notes at March 30, 2024 is summarized as follows:

 

 

Carrying Value

 

 

Estimated Fair
Value

 

Equipment promissory notes

 

$

190,077

 

 

$

186,944

 

 

We have not elected the fair value option for any of our financial instruments.
v3.24.1.u1
Leases
 3 Months Ended
Mar. 30, 2024
Leases [Abstract]  
Leases
(8)
Leases

As of March 30, 2024, 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 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 March 30, 2024, 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.

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.

(8)
Leases – continued

The following table summarizes our lease costs for the thirteen weeks ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended March 30, 2024

 

 

 

With Affiliates

 

 

With Third Parties

 

 

Total

 

Lease cost

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

2,426

 

 

$

6,375

 

 

$

8,801

 

Short-term lease cost

 

 

17

 

 

 

2,735

 

 

 

2,752

 

Variable lease cost

 

 

242

 

 

 

1,207

 

 

 

1,449

 

Sublease income

 

 

—

 

 

 

—

 

 

 

—

 

Total lease cost

 

$

2,685

 

 

$

10,317

 

 

$

13,002

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirteen Weeks Ended April 1, 2023

 

 

 

With Affiliates

 

 

With Third Parties

 

 

Total

 

Lease cost

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

2,411

 

 

$

6,619

 

 

$

9,030

 

Short-term lease cost

 

 

7

 

 

 

4,029

 

 

 

4,036

 

Variable lease cost

 

 

199

 

 

 

599

 

 

 

798

 

Sublease income

 

 

—

 

 

 

—

 

 

 

—

 

Total lease cost

 

$

2,617

 

 

$

11,247

 

 

$

13,864

 

 

 

 

 

 

 

 

 

 

 

The following table summarizes other lease related information as of and for the thirteen week periods ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended March 30, 2024

 

 

 

With
Affiliates

 

 

With Third
Parties

 

 

Total

 

Other information

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of operating leases

 

$

2,439

 

 

$

6,545

 

 

$

8,984

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

$

2,271

 

 

$

343

 

 

$

2,614

 

Weighted-average remaining lease term (in years)

 

 

4.3

 

 

 

3.0

 

 

 

3.4

 

Weighted-average discount rate

 

 

7.7

%

 

 

5.5

%

 

 

6.2

%

 

 

 

 

 

 

 

 

 

 

 

 

April 1, 2023

 

 

 

With
Affiliates

 

 

With Third
Parties

 

 

Total

 

Other information

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of operating leases

 

$

2,382

 

 

$

6,499

 

 

$

8,881

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

$

—

 

 

$

12,188

 

 

$

12,188

 

Right-of-use asset change due to lease termination

 

$

(64

)

 

$

—

 

 

$

(64

)

Weighted-average remaining lease term (in years)

 

 

4.7

 

 

 

3.8

 

 

 

4.1

 

Weighted-average discount rate

 

 

7.1

%

 

 

5.2

%

 

 

5.8

%

 

(8)
Leases – continued

Future minimum lease payments under these operating leases as of March 30, 2024, are as follows (in thousands):

 

 

With Affiliates

 

 

With Third Parties

 

 

Total

 

2024 (remaining)

 

$

7,183

 

 

$

19,188

 

 

$

26,371

 

2025

 

 

8,013

 

 

 

21,088

 

 

 

29,101

 

2026

 

 

5,481

 

 

 

17,201

 

 

 

22,682

 

2027

 

 

4,375

 

 

 

8,158

 

 

 

12,533

 

2028

 

 

4,189

 

 

 

1,333

 

 

 

5,522

 

Thereafter

 

 

3,672

 

 

 

—

 

 

 

3,672

 

Total required lease payments

 

$

32,913

 

 

$

66,968

 

 

$

99,881

 

Less amounts representing interest

 

 

 

 

 

 

 

 

(10,873

)

Present value of lease liabilities

 

 

 

 

 

 

 

$

89,008

 

 

 

 

 

 

 

 

 

 

 
v3.24.1.u1
Transactions with Affiliates
 3 Months Ended
Mar. 30, 2024
Related Party Transactions [Abstract]  
Transactions with Affiliates
(9)
Transactions with Affiliates

Matthew T. Moroun is Chair of our Board of Directors and his son, Matthew J. Moroun, is a member of our Board of Directors. 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 of Directors, 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 of Directors 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. Following is a schedule of cost incurred and included in operating expenses for services provided by affiliates for the thirteen weeks ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

 

 

 

 

 

 

 

Insurance

 

$

21,421

 

 

$

20,256

 

Real estate rent and related costs

 

 

3,508

 

 

 

3,266

 

Administrative support services

 

 

1,867

 

 

 

1,605

 

Truck fuel, maintenance and other operating costs

 

 

4,341

 

 

 

1,938

 

Contracted transportation services

 

 

36

 

 

 

113

 

Total

 

$

31,173

 

 

$

27,178

 

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 29 facilities from related parties. Our occupancy is based on either month-to-month or contractual, multi-year lease arrangements that are billed and paid monthly. Leasing properties from a related party affords us significant operating flexibility; however, we are not limited to such arrangements. See Note 8, “Leases” for further information regarding the cost of leased properties.

We purchase employee medical, workers’ compensation, property and casualty, cargo, warehousing and other general liability insurance from an insurance company controlled by our controlling shareholder. In our Consolidated Balance Sheets, we record our insured claims liability and the related recovery in insurance and claims, and other receivables. At March 30, 2024 and December 31, 2023, there were $16.1 million and $14.3 million, respectively, included in each of these accounts for insured claims.

(9)
Transactions with Affiliates – continued

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 March 30, 2024 and December 31, 2023, amounts due to affiliates were $23.3 million and $20.7 million, respectively.

During the thirteen weeks ended March 30, 2024, we purchased trailers from an affiliate totaling $1.6 million. There were no such purchases made during the thirteen weeks ended April 1, 2023.

In June 2022, we executed a real estate contract with an affiliate to acquire a multi-building, office complex located in Warren, Michigan for $8.3 million. The purchase price was established by an independent, third-party appraisal. During 2022, the Company made an initial deposit of $200,000 and paid the balance at closing in the first quarter of 2023.

Services provided by Universal to Affiliates

We periodically assist our affiliates by providing selected transportation and logistics services in connection with their specific customer contracts or purchase orders. We may also lease facilities to our affiliates on an as-needed basis. Truck fueling and administrative expenses are presented net in operating expense. Following is a schedule of services provided to affiliates for the thirteen weeks and ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contracted transportation services

 

$

230

 

 

$

102

 

Facilities and related support

 

 

660

 

 

 

60

 

Total

 

$

890

 

 

$

162

 

At March 30, 2024 and December 31, 2023, amounts due from affiliates were $1.1 million and $0.7 million, respectively.
v3.24.1.u1
Stock Based Compensation
 3 Months Ended
Mar. 30, 2024
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock Based Compensation
(10)
Stock Based Compensation

In February 2024, we granted 21,105 shares of restricted stock under our equity plan to certain employees, including 5,160 shares to our Chief Executive Officer and 5,223 shares to our Chief Financial Officer. The restricted stock awards have a grant date fair value of $31.96 per share, based on the closing price of our stock. The shares will vest in four equal installments on each March 15 in 2025, 2026, 2027, and 2028, subject to their continued employment with us.

In May 2023, we granted 3,549 shares of common stock under our equity plan to non-employee directors. These restricted stock awards have a fair value of $25.42 per share, based on the closing price of our stock on the grant date, and vested immediately.

In March 2023, we granted 34,611 shares of restricted stock under our equity plan to certain employees, including 9,134 shares to our Chief Executive Officer and 8,441 shares to our Chief Financial Officer. The restricted stock awards have a grant date fair value of $27.59 per share, based on the closing price of our stock. The shares will vest in four equal installments on each March 15 in 2024, 2025, 2026, and 2027, subject to their continued employment with us.

In September 2021, we granted 2,355 shares of restricted stock under our equity plan to one of our employees. This restricted stock award has a fair value of $20.46 per share, based on the closing price of our stock on the grant date. The shares will vest in five equal increments on each August 9 in 2022, 2023, 2024, 2025 and 2026, subject to continued employment with us.

In February 2020, we granted 5,000 shares of restricted stock under our equity plan to our Chief Financial Officer. This restricted stock award has a fair value of $17.74 per share, based on the closing price of our stock on the grant date. The shares vested on February 20, 2024.

In January 2020, we granted 60,000 shares of restricted stock under our equity plan to our Chief Executive Officer. This restricted stock award has a fair value of $18.82 per share, based on the closing price of our stock on the grant date. The shares will vest in installments of 20,000 shares on January 10, 2024 and January 10, 2026, and installments of 10,000 shares on January 10, 2027 and January 10, 2028, subject to his continued employment with us.

A grantee’s vesting of restricted stock awards may be accelerated under certain conditions, including retirement.

(10)
Stock Based Compensation – continued

The following table summarizes the status of our non-vested shares and related information for the period indicated:

 

 

Shares

 

 

Weighted
Average Grant
Date Fair Value

 

Non-vested at January 1, 2024

 

 

100,458

 

 

$

21.76

 

Granted

 

 

21,105

 

 

$

31.96

 

Vested

 

 

(33,515

)

 

$

20.89

 

Forfeited

 

 

—

 

 

$

—

 

Balance at March 30, 2024

 

 

88,048

 

 

$

24.54

 

In the thirteen week periods ended March 30, 2024 and April 1, 2023, the total grant date fair value of vested shares recognized as compensation costs was $0.7 million and $0.2 million, respectively. As of March 30, 2024, there was approximately $2.2 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements. That cost is expected to be recognized on a straight-line basis over the remaining vesting period. As a result, we expect to recognize stock-based compensation expense of $0.4 million in 2025, $0.8 million in 2026, $0.6 million in 2027, and $0.4 million in 2028.
v3.24.1.u1
Earnings Per Share
 3 Months Ended
Mar. 30, 2024
Earnings Per Share [Abstract]  
Earnings Per Share
(11)
Earnings Per Share

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 ended March 30, 2024 and April 1, 2023, there were 21,011 and 33,348 weighted average non-vested shares of restricted stock, respectively, included in the denominator for the calculation of diluted earnings per share.

No shares of non-vested restricted stock were excluded from the calculation of diluted earnings per share due to anti-dilution during the thirteen weeks ended March 30, 2024 or April 1, 2023.
v3.24.1.u1
Dividends
 3 Months Ended
Mar. 30, 2024
Earnings Per Share [Abstract]  
Dividends
(12)
Dividends

On February 14, 2024, our Board of Directors declared a cash dividend of $0.105 per share of common stock, payable on April 1, 2024 to shareholders of record at the close of business on March 4, 2024. Declaration of future cash dividends is subject to final determination by the Board of Directors each quarter after its review of our financial condition, results of operations, capital requirements, any legal or contractual restrictions on the payment of dividends and other factors the Board of Directors deems relevant.
v3.24.1.u1
Segment Reporting
 3 Months Ended
Mar. 30, 2024
Segment Reporting [Abstract]  
Segment Reporting
(13)
Segment Reporting

We report our financial results in four distinct reportable segments: contract logistics, intermodal, trucking, and company-managed brokerage, 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.

Operations aggregated in our contract logistics segment deliver value-added and/or dedicated transportation services to support in-bound logistics to original equipment manufacturers (OEMs) 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 aggregated in our trucking segment are associated with individual freight shipments coordinated primarily by our agents using a mix of owner-operators, company equipment and broker carriers. Our company-managed brokerage segment provides for the pick-up and delivery of individual freight shipments using broker carriers, coordinated by our company-managed operations. Other non-reportable segments are comprised of the Company’s subsidiaries that provide support services to other subsidiaries.

Separate balance sheets are not prepared by segment, and we do not provide asset information by segment to the chief operating decision maker.

(13)
Segment Reporting – continued

The following tables summarize information about our reportable segments for the thirteen week periods ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Operating Revenues

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contract logistics

 

$

313,548

 

 

$

211,296

 

Intermodal

 

 

76,715

 

 

 

111,026

 

Trucking

 

 

69,655

 

 

 

79,715

 

Company-managed brokerage

 

 

31,000

 

 

 

33,956

 

Other

 

 

989

 

 

 

1,403

 

Total operating revenues

 

$

491,907

 

 

$

437,396

 

 

 

 

Eliminated Inter-segment Revenues

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contract logistics

 

$

71

 

 

$

301

 

Intermodal

 

 

437

 

 

 

965

 

Trucking

 

 

55

 

 

 

140

 

Company-managed brokerage

 

 

494

 

 

 

906

 

Total eliminated inter-segment revenues

 

$

1,057

 

 

$

2,312

 

 

 

 

Income from Operations

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contract logistics

 

$

81,466

 

 

$

27,781

 

Intermodal

 

 

(8,046

)

 

 

6,812

 

Trucking

 

 

3,669

 

 

 

3,789

 

Company-managed brokerage

 

 

(2,488

)

 

 

(375

)

Other

 

 

491

 

 

 

189

 

Total income from operations

 

$

75,092

 

 

$

38,196

 
v3.24.1.u1
Treasury Stock
 3 Months Ended
Mar. 30, 2024
Treasury Stock, Value [Abstract]  
Treasury Stock
(14)
Treasury Stock

During the first quarter of 2024, we retired 4,722,877 shares of our treasury stock. Upon retirement of the treasury shares, we allocated the excess of the repurchase price over the par value of shares acquired to both retained earnings and paid-in capital. The portion allocated to paid-in capital was determined by applying the average paid-in capital per share, and the remaining portion was recorded to retained earnings. There was no effect on the Company’s overall equity position due to the retirement of treasury shares.

The Company accounts for treasury stock using the cost method. As of March 30, 2024, there were no shares held in the treasury.
v3.24.1.u1
Commitments and Contingencies
 3 Months Ended
Mar. 30, 2024
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies
(15)
Commitments and Contingencies

Our principal commitments relate to long-term real estate leases and payment obligations to equipment vendors.

We are 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 our 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 March 30, 2024, approximately 32% of our employees were subject to collective bargaining agreements that are renegotiated periodically, 45% of which are subject to contracts that expire in 2024.

v3.24.1.u1
Subsequent Events
 3 Months Ended
Mar. 30, 2024
Subsequent Events [Abstract]  
Subsequent Events
(16)
Subsequent Events

On April 25, 2024, our Board of Directors declared a cash dividend of $0.105 per share of common stock, payable on July 1, 2024 to shareholders of record at the close of business on June 3, 2024. Declaration of future cash dividends is subject to final determination by the Board of Directors each quarter after its review of our financial condition, results of operations, capital requirements, any legal or contractual restrictions on the payment of dividends and other factors the Board of Directors deems relevant.
v3.24.1.u1
Revenue Recognition (Tables)
 3 Months Ended
Mar. 30, 2024
Revenue Recognition [Abstract]  
Contacts Balances Associated with Customers

The following table provides information related to contract balances associated with our contracts with customers (in thousands):

 

 

March 30,
2024

 

 

December 31,
2023

 

Contract assets

 

$

11,451

 

 

$

729

 

Contract assets, net of current portion

 

 

85,790

 

 

 

—

 

Total

 

$

97,241

 

 

$

729

 
v3.24.1.u1
Marketable Securities (Tables)
 3 Months Ended
Mar. 30, 2024
Investments, Debt And Equity Securities [Abstract]  
Schedule of Market Value, Cost and Unrealized Gains on Equity Securities

The following table sets forth market value, cost basis, and unrealized gains on equity securities (in thousands):

 

 

March 30,
2024

 

 

December 31,
2023

 

Fair value

 

$

11,762

 

 

$

10,772

 

Cost basis

 

 

7,316

 

 

 

7,316

 

Unrealized gain

 

$

4,446

 

 

$

3,456

 

 

 

 

 

 

 

 
Schedule of Gross Unrealized Gains and Losses on Marketable Securities

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities (in thousands):

 

 

March 30,
2024

 

 

December 31,
2023

 

Gross unrealized gains

 

$

5,074

 

 

$

4,124

 

Gross unrealized losses

 

 

(628

)

 

 

(668

)

Net unrealized gains

 

$

4,446

 

 

$

3,456

 

 

 

 

 

 

 

 
v3.24.1.u1
Accrued Expenses and Other Current Liabilities (Tables)
 3 Months Ended
Mar. 30, 2024
Payables And Accruals [Abstract]  
Schedule of Accrued Expenses

Accrued expenses and other current liabilities are comprised of the following (in thousands):

 

 

 

March 30,
2024

 

 

December 31,
2023

 

 

 

 

 

 

 

 

Accrued payroll

 

$

18,234

 

 

$

18,047

 

Accrued payroll taxes

 

 

5,906

 

 

 

3,149

 

Accrued contract costs

 

 

17,160

 

 

 

—

 

Driver escrow liabilities

 

 

3,081

 

 

 

3,275

 

Legal settlements and claims

 

 

4,050

 

 

 

4,050

 

Commissions, other taxes and other

 

 

15,886

 

 

 

14,541

 

Total

 

$

64,317

 

 

$

43,062

 
v3.24.1.u1
Debt (Tables)
 3 Months Ended
Mar. 30, 2024
Debt Disclosure [Abstract]  
Details of Debt

Debt is comprised of the following (in thousands):

 

 

 

Interest Rates
at March 30, 2024

 

March 30,
2024

 

 

December 31,
2023

 

Outstanding Debt:

 

 

 

 

 

 

 

 

Revolving Credit Facility (1) (2)

 

6.92%

 

$

37,774

 

 

$

21,934

 

UACL Credit Agreement (2)

 

 

 

 

 

 

 

 

Term Loan

 

7.17%

 

 

55,500

 

 

 

69,000

 

Revolver

 

7.17%

 

 

—

 

 

 

—

 

Equipment Financing (3)

 

2.25% to 7.27%

 

 

190,077

 

 

 

156,341

 

Real Estate Facility (4)

 

7.44%

 

 

135,036

 

 

 

139,170

 

Margin Facility (5)

 

6.42%

 

 

—

 

 

 

—

 

Unamortized debt issuance costs

 

 

 

 

(4,279

)

 

 

(4,521

)

 

 

 

 

 

414,108

 

 

 

381,924

 

Less current portion of long-term debt

 

 

 

 

73,461

 

 

 

70,689

 

Total long-term debt, net of current portion

 

 

 

$

340,647

 

 

$

311,235

 

(1) Our Revolving Credit Facility provides us with a revolving credit commitment of up to $400 million. We may borrow under the Revolving Credit Facility until maturity on September 30, 2027, and this indebtedness bears interest at index-adjusted SOFR, or a base rate, plus an applicable margin based on the Company’s leverage ratio. The Revolving Credit Facility is secured by a first-priority pledge of the capital stock of applicable subsidiaries, as well as first-priority perfected security interests in cash, deposits, accounts receivable, and selected other assets of the applicable borrowers. The Revolving Credit Facility includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions. At March 30, 2024, we were in compliance with all covenants under the facility, and $362.2 million was available for borrowing on the revolver.

(2) Our UACL Credit Agreement provides for maximum borrowings of $90 million in the form of an $80 million term loan and a $10 million revolver. The term loan matures on September 30, 2027 and is repaid in consecutive quarterly installments. The remaining term loan balance is due at maturity. We may borrow under the revolving credit facility until maturity on September 30, 2027. Borrowings bear interest at index-adjusted SOFR, or a base rate, plus an applicable margin based on the borrowers’ leverage ratio. The UACL Credit Agreement is secured by a first-priority pledge of the capital stock of applicable subsidiaries, as well as first-priority perfected security interest in cash, deposits, accounts receivable, and selected other assets of the applicable borrowers. The UACL Credit Agreement includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions. At March 30, 2024, we were in compliance with all covenants under the facility, and $10.0 million was available for borrowing on the revolver.

(3) Our Equipment Financing consists of a series of promissory notes issued by a wholly owned subsidiary. The equipment notes, which are secured by liens on specific titled vehicles, are generally payable in 60 monthly installments and bear interest at fixed rates ranging from 2.25% to 7.27%.

(4) Our Real Estate Facility facilitated a $165.4 million term loan, and the facility matures on April 29, 2032. Obligations under the facility are secured by first-priority mortgages on specific parcels of real estate owned by the Company, including all land and real property improvements, and first-priority assignments of rents and related leases of the loan parties. The credit agreement includes customary affirmative and negative covenants, and principal and interest are payable on the facility on a monthly basis, based on an annual amortization of 10%. The facility bears interest at Term SOFR, plus an applicable margin equal to 2.12%. At March 30, 2024, we were in compliance with all covenants under the facility.

(6)
Debt – continued

(5) Our Margin Facility is a short-term line of credit secured by our portfolio of marketable securities. It bears interest at Term SOFR plus 1.10%. The amount available under the line of credit is based on a percentage of the market value of the underlying securities. At March 30, 2024, the maximum available borrowings under the line of credit were $5.7 million.
v3.24.1.u1
Fair Value Measurements and Disclosures (Tables)
 3 Months Ended
Mar. 30, 2024
Fair Value Disclosures [Abstract]  
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

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):

 

 

March 30,
2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Fair Value Measurement

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

21

 

 

$

—

 

 

$

—

 

 

$

21

 

Marketable securities

 

 

11,762

 

 

 

—

 

 

 

—

 

 

 

11,762

 

Interest rate swap

 

 

—

 

 

 

2,616

 

 

 

—

 

 

 

2,616

 

Total

 

$

11,783

 

 

$

2,616

 

 

$

—

 

 

$

14,399

 

 

 

 

December 31,
2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Fair Value Measurement

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

168

 

 

$

—

 

 

$

—

 

 

$

168

 

Marketable securities

 

 

10,772

 

 

 

—

 

 

 

—

 

 

 

10,772

 

Interest rate swap

 

 

—

 

 

 

1,807

 

 

 

—

 

 

 

1,807

 

Total

 

$

10,940

 

 

$

1,807

 

 

$

—

 

 

$

12,747

 
Summary of Carrying Values and Estimated Fair Values of Promissory Notes The carrying value and estimated fair value of these promissory notes at March 30, 2024 is summarized as follows:

 

 

Carrying Value

 

 

Estimated Fair
Value

 

Equipment promissory notes

 

$

190,077

 

 

$

186,944

 
v3.24.1.u1
Leases (Tables)
 3 Months Ended
Mar. 30, 2024
Leases [Abstract]  
Summary of Lease Costs

The following table summarizes our lease costs for the thirteen weeks ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended March 30, 2024

 

 

 

With Affiliates

 

 

With Third Parties

 

 

Total

 

Lease cost

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

2,426

 

 

$

6,375

 

 

$

8,801

 

Short-term lease cost

 

 

17

 

 

 

2,735

 

 

 

2,752

 

Variable lease cost

 

 

242

 

 

 

1,207

 

 

 

1,449

 

Sublease income

 

 

—

 

 

 

—

 

 

 

—

 

Total lease cost

 

$

2,685

 

 

$

10,317

 

 

$

13,002

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirteen Weeks Ended April 1, 2023

 

 

 

With Affiliates

 

 

With Third Parties

 

 

Total

 

Lease cost

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

2,411

 

 

$

6,619

 

 

$

9,030

 

Short-term lease cost

 

 

7

 

 

 

4,029

 

 

 

4,036

 

Variable lease cost

 

 

199

 

 

 

599

 

 

 

798

 

Sublease income

 

 

—

 

 

 

—

 

 

 

—

 

Total lease cost

 

$

2,617

 

 

$

11,247

 

 

$

13,864

 

 

 

 

 

 

 

 

 

 

 
Summary of Other Lease Related Information

The following table summarizes other lease related information as of and for the thirteen week periods ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended March 30, 2024

 

 

 

With
Affiliates

 

 

With Third
Parties

 

 

Total

 

Other information

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of operating leases

 

$

2,439

 

 

$

6,545

 

 

$

8,984

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

$

2,271

 

 

$

343

 

 

$

2,614

 

Weighted-average remaining lease term (in years)

 

 

4.3

 

 

 

3.0

 

 

 

3.4

 

Weighted-average discount rate

 

 

7.7

%

 

 

5.5

%

 

 

6.2

%

 

 

 

 

 

 

 

 

 

 

 

 

April 1, 2023

 

 

 

With
Affiliates

 

 

With Third
Parties

 

 

Total

 

Other information

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of operating leases

 

$

2,382

 

 

$

6,499

 

 

$

8,881

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

$

—

 

 

$

12,188

 

 

$

12,188

 

Right-of-use asset change due to lease termination

 

$

(64

)

 

$

—

 

 

$

(64

)

Weighted-average remaining lease term (in years)

 

 

4.7

 

 

 

3.8

 

 

 

4.1

 

Weighted-average discount rate

 

 

7.1

%

 

 

5.2

%

 

 

5.8

%

 

(8)
Leases – continued
Schedule of Future Minimum Lease Payments Under Operating Leases

Future minimum lease payments under these operating leases as of March 30, 2024, are as follows (in thousands):

 

 

With Affiliates

 

 

With Third Parties

 

 

Total

 

2024 (remaining)

 

$

7,183

 

 

$

19,188

 

 

$

26,371

 

2025

 

 

8,013

 

 

 

21,088

 

 

 

29,101

 

2026

 

 

5,481

 

 

 

17,201

 

 

 

22,682

 

2027

 

 

4,375

 

 

 

8,158

 

 

 

12,533

 

2028

 

 

4,189

 

 

 

1,333

 

 

 

5,522

 

Thereafter

 

 

3,672

 

 

 

—

 

 

 

3,672

 

Total required lease payments

 

$

32,913

 

 

$

66,968

 

 

$

99,881

 

Less amounts representing interest

 

 

 

 

 

 

 

 

(10,873

)

Present value of lease liabilities

 

 

 

 

 

 

 

$

89,008

 

 

 

 

 

 

 

 

 

 

 
v3.24.1.u1
Transactions with Affiliates (Tables)
 3 Months Ended
Mar. 30, 2024
Related Party Transactions [Abstract]  
Schedule of Amounts Charged to UTSI for the thirteen weeks ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

 

 

 

 

 

 

 

Insurance

 

$

21,421

 

 

$

20,256

 

Real estate rent and related costs

 

 

3,508

 

 

 

3,266

 

Administrative support services

 

 

1,867

 

 

 

1,605

 

Truck fuel, maintenance and other operating costs

 

 

4,341

 

 

 

1,938

 

Contracted transportation services

 

 

36

 

 

 

113

 

Total

 

$

31,173

 

 

$

27,178

 
Schedule of Services Provided to Affiliates Following is a schedule of services provided to affiliates for the thirteen weeks and ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contracted transportation services

 

$

230

 

 

$

102

 

Facilities and related support

 

 

660

 

 

 

60

 

Total

 

$

890

 

 

$

162

 
v3.24.1.u1
Stock Based Compensation (Tables)
 3 Months Ended
Mar. 30, 2024
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Summary of Status of Nonvested Shares

The following table summarizes the status of our non-vested shares and related information for the period indicated:

 

 

Shares

 

 

Weighted
Average Grant
Date Fair Value

 

Non-vested at January 1, 2024

 

 

100,458

 

 

$

21.76

 

Granted

 

 

21,105

 

 

$

31.96

 

Vested

 

 

(33,515

)

 

$

20.89

 

Forfeited

 

 

—

 

 

$

—

 

Balance at March 30, 2024

 

 

88,048

 

 

$

24.54

 
v3.24.1.u1
Segment Reporting (Tables)
 3 Months Ended
Mar. 30, 2024
Segment Reporting [Abstract]  
Summary of Company's Reportable Segment Information

The following tables summarize information about our reportable segments for the thirteen week periods ended March 30, 2024 and April 1, 2023 (in thousands):

 

 

Operating Revenues

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contract logistics

 

$

313,548

 

 

$

211,296

 

Intermodal

 

 

76,715

 

 

 

111,026

 

Trucking

 

 

69,655

 

 

 

79,715

 

Company-managed brokerage

 

 

31,000

 

 

 

33,956

 

Other

 

 

989

 

 

 

1,403

 

Total operating revenues

 

$

491,907

 

 

$

437,396

 

 

 

 

Eliminated Inter-segment Revenues

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contract logistics

 

$

71

 

 

$

301

 

Intermodal

 

 

437

 

 

 

965

 

Trucking

 

 

55

 

 

 

140

 

Company-managed brokerage

 

 

494

 

 

 

906

 

Total eliminated inter-segment revenues

 

$

1,057

 

 

$

2,312

 

 

 

 

Income from Operations

 

 

 

Thirteen Weeks Ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Contract logistics

 

$

81,466

 

 

$

27,781

 

Intermodal

 

 

(8,046

)

 

 

6,812

 

Trucking

 

 

3,669

 

 

 

3,789

 

Company-managed brokerage

 

 

(2,488

)

 

 

(375

)

Other

 

 

491

 

 

 

189

 

Total income from operations

 

$

75,092

 

 

$

38,196

 
v3.24.1.u1
Basis of Presentation - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Change In Accounting Estimate [Line Items]    
Basic per share $ 1.99 $ 0.95
Diluted per share $ 1.99 $ 0.95
Change in Estimated Useful Lives of Certain Definite Lived Intangible Assets [Member]    
Change In Accounting Estimate [Line Items]    
Additional amortization expense of definite lived intangible assets $ 2.2  
Additional amortization expense of definite lived intangible assets, net of tax $ 1.7  
Basic per share $ 0.06  
Diluted per share $ 0.06  
v3.24.1.u1
Revenue Recognition - Additional Information (Detail)
 3 Months Ended
Mar. 30, 2024
Revenue Recognition Multiple Deliverable Arrangements [Line Items]  
Payment receivable obligation term for completion of transportation services 45 days
Payment receivable obligation for completion of value added services 65 days
Payment receivable for specialty development project 120 months
Maximum [Member]  
Revenue Recognition Multiple Deliverable Arrangements [Line Items]  
Transportation services term 1 year
v3.24.1.u1
Revenue Recognition - Contact Balances Associated with Customers (Detail) - USD ($)
$ in Thousands
Mar. 30, 2024
Dec. 31, 2023
Disaggregation Of Revenue [Line Items]    
Contract assets $ 11,451 $ 729
Contract assets, net of current portion 85,790  
Total $ 97,241 $ 729
v3.24.1.u1
Marketable Securities - Schedule of Market Value, Cost and Unrealized Gains on Equity Securities (Detail) - USD ($)
$ in Thousands
Mar. 30, 2024
Dec. 31, 2023
Investments, Debt And Equity Securities [Abstract]    
Fair value $ 11,762 $ 10,772
Cost basis 7,316 7,316
Unrealized gain $ 4,446 $ 3,456
v3.24.1.u1
Marketable Securities - Schedule of Gross Unrealized Gains and Losses on Marketable Securities (Detail) - USD ($)
$ in Thousands
Mar. 30, 2024
Dec. 31, 2023
Investments, Debt And Equity Securities [Abstract]    
Gross unrealized gains $ 5,074 $ 4,124
Gross unrealized losses (628) (668)
Net unrealized gains $ 4,446 $ 3,456
v3.24.1.u1
Marketable Securities - Additional Information (Detail) - USD ($)
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Schedule Of Available For Sale Securities [Line Items]    
Sale of marketable equity securities $ 0 $ 0
Other Nonoperating Income (Expense)    
Schedule Of Available For Sale Securities [Line Items]    
Net unrealized pre-tax gain (loss) in market value $ 990,000 $ (13,000)
v3.24.1.u1
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Detail) - USD ($)
$ in Thousands
Mar. 30, 2024
Dec. 31, 2023
Payables And Accruals [Abstract]    
Accrued payroll $ 18,234 $ 18,047
Accrued payroll taxes 5,906 3,149
Accrued contract costs 17,160  
Driver escrow liabilities 3,081 3,275
Legal settlements and claims 4,050 4,050
Commissions, other taxes and other 15,886 14,541
Total $ 64,317 $ 43,062
v3.24.1.u1
Debt - Details of Debt (Detail) - USD ($)
$ in Thousands
Mar. 30, 2024
Dec. 31, 2023
Outstanding Debt:    
Unamortized debt issuance costs $ (4,279) $ (4,521)
Outstanding Debt 414,108 381,924
Less current portion of long-term debt 73,461 70,689
Total long-term debt, net of current portion 340,647 311,235
Credit and Security Agreement [Member] | Revolver Credit Facility [Member]    
Outstanding Debt:    
Outstanding Debt [1],[2] $ 37,774 21,934
Credit facility, Interest Rates [1],[2] 6.92%  
UACL Credit and Security Agreement [Member] | Term Loan [Member]    
Outstanding Debt:    
Outstanding Debt [2] $ 55,500 69,000
Credit facility, Interest Rates [2] 7.17%  
UACL Credit and Security Agreement [Member] | Revolver Credit Facility [Member]    
Outstanding Debt:    
Outstanding Debt [2] $ 0 0
Credit facility, Interest Rates [2] 7.17%  
Real Estate Financing [Member]    
Outstanding Debt:    
Credit facility, Interest Rates [3] 7.44%  
Equipment Financing [Member]    
Outstanding Debt:    
Outstanding Debt [4] $ 190,077 156,341
Equipment Financing [Member] | Minimum [Member]    
Outstanding Debt:    
Credit facility, Interest Rates [4] 2.25%  
Equipment Financing [Member] | Maximum [Member]    
Outstanding Debt:    
Credit facility, Interest Rates [4] 7.27%  
Real Estate Note [Member]    
Outstanding Debt:    
Outstanding Debt [3] $ 135,036 139,170
Margin Facility [Member]    
Outstanding Debt:    
Outstanding Debt [5] $ 0 $ 0
Credit facility, Interest Rates [5] 6.42%  
[1] Our Revolving Credit Facility provides us with a revolving credit commitment of up to $400 million. We may borrow under the Revolving Credit Facility until maturity on September 30, 2027, and this indebtedness bears interest at index-adjusted SOFR, or a base rate, plus an applicable margin based on the Company’s leverage ratio. The Revolving Credit Facility is secured by a first-priority pledge of the capital stock of applicable subsidiaries, as well as first-priority perfected security interests in cash, deposits, accounts receivable, and selected other assets of the applicable borrowers. The Revolving Credit Facility includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions. At March 30, 2024, we were in compliance with all covenants under the facility, and $362.2 million was available for borrowing on the revolver.
[2] Our UACL Credit Agreement provides for maximum borrowings of $90 million in the form of an $80 million term loan and a $10 million revolver. The term loan matures on September 30, 2027 and is repaid in consecutive quarterly installments. The remaining term loan balance is due at maturity. We may borrow under the revolving credit facility until maturity on September 30, 2027. Borrowings bear interest at index-adjusted SOFR, or a base rate, plus an applicable margin based on the borrowers’ leverage ratio. The UACL Credit Agreement is secured by a first-priority pledge of the capital stock of applicable subsidiaries, as well as first-priority perfected security interest in cash, deposits, accounts receivable, and selected other assets of the applicable borrowers. The UACL Credit Agreement includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions. At March 30, 2024, we were in compliance with all covenants under the facility, and $10.0 million was available for borrowing on the revolver.
[3] Our Real Estate Facility facilitated a $165.4 million term loan, and the facility matures on April 29, 2032. Obligations under the facility are secured by first-priority mortgages on specific parcels of real estate owned by the Company, including all land and real property improvements, and first-priority assignments of rents and related leases of the loan parties. The credit agreement includes customary affirmative and negative covenants, and principal and interest are payable on the facility on a monthly basis, based on an annual amortization of 10%. The facility bears interest at Term SOFR, plus an applicable margin equal to 2.12%. At March 30, 2024, we were in compliance with all covenants under the facility.
[4] Our Equipment Financing consists of a series of promissory notes issued by a wholly owned subsidiary. The equipment notes, which are secured by liens on specific titled vehicles, are generally payable in 60 monthly installments and bear interest at fixed rates ranging from 2.25% to 7.27%.
[5] Our Margin Facility is a short-term line of credit secured by our portfolio of marketable securities. It bears interest at Term SOFR plus 1.10%. The amount available under the line of credit is based on a percentage of the market value of the underlying securities. At March 30, 2024, the maximum available borrowings under the line of credit were $5.7 million.
v3.24.1.u1
Debt - Details of Debt (Parenthetical) (Detail)
$ in Millions
 3 Months Ended
Mar. 30, 2024
USD ($)
Installment
Apr. 01, 2023
USD ($)
Credit and Security Agreement [Member]    
Debt Instrument [Line Items]    
Credit facility, borrowing capacity $ 400.0  
Credit facility available for borrowings   $ 362.2
Credit and Security Agreement [Member] | Revolver Credit Facility [Member]    
Debt Instrument [Line Items]    
Credit facility, expiration date Sep. 30, 2027  
UACL Credit and Security Agreement [Member]    
Debt Instrument [Line Items]    
Credit facility, borrowing capacity $ 90.0  
Credit facility available for borrowings $ 10.0  
UACL Credit and Security Agreement [Member] | Term Loan [Member]    
Debt Instrument [Line Items]    
loan, expiration date Sep. 30, 2027  
Term loan, face amount $ 80.0  
UACL Credit and Security Agreement [Member] | Revolver Credit Facility [Member]    
Debt Instrument [Line Items]    
Credit facility, borrowing capacity $ 10.0  
Credit facility, expiration date Sep. 30, 2027  
Equipment Financing [Member]    
Debt Instrument [Line Items]    
Number of installments | Installment 60  
Frequency of installments monthly  
Equipment Financing [Member] | Minimum [Member]    
Debt Instrument [Line Items]    
Credit facility, Interest Rates [1] 2.25%  
Equipment Financing [Member] | Maximum [Member]    
Debt Instrument [Line Items]    
Credit facility, Interest Rates [1] 7.27%  
Real Estate Financing [Member] | Secured Debt [Member]    
Debt Instrument [Line Items]    
Frequency of installments monthly  
Description of variable rate basis SOFR  
Real Estate Financing [Member] | Secured Debt [Member] | SOFR [Member]    
Debt Instrument [Line Items]    
Interest rate above variable base rate 2.12%  
Real Estate Financing [Member] | Term Loan [Member]    
Debt Instrument [Line Items]    
Credit facility, borrowing capacity $ 165.4  
Credit facility, expiration date Apr. 29, 2032  
Percentage of annual amortization 10.00%  
Line of credit facility covenant terms The credit agreement includes customary affirmative and negative covenants, and principal and interest are payable on the facility on a monthly basis, based on an annual amortization of 10%.  
Margin Facility [Member]    
Debt Instrument [Line Items]    
Credit facility available for borrowings $ 5.7  
Description of variable rate basis SOFR plus 1.10%  
Margin Facility [Member] | LIBOR [Member]    
Debt Instrument [Line Items]    
Interest rate above variable base rate 1.10%  
[1] Our Equipment Financing consists of a series of promissory notes issued by a wholly owned subsidiary. The equipment notes, which are secured by liens on specific titled vehicles, are generally payable in 60 monthly installments and bear interest at fixed rates ranging from 2.25% to 7.27%.
v3.24.1.u1
Debt - Additional Information (Detail) - Interest Rate Swap
$ in Millions
 3 Months Ended
Mar. 30, 2024
USD ($)
Line Of Credit Facility [Line Items]  
Notional amount $ 80.8
Derivative maturity date Apr. 30, 2027
Fair value asset of swap agreement $ 2.6
SOFR [Member]  
Line Of Credit Facility [Line Items]  
Fixed rate 2.88%
v3.24.1.u1
Fair Value Measurements and Disclosures - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($)
$ in Thousands
Mar. 30, 2024
Dec. 31, 2023
Assets    
Marketable securities $ 11,762 $ 10,772
Fair Value, Measurements, Recurring [Member]    
Assets    
Cash equivalents 21 168
Marketable securities 11,762 10,772
Interest rate swap 2,616 1,807
Total 14,399 12,747
Level 1 [Member] | Fair Value, Measurements, Recurring [Member]    
Assets    
Cash equivalents 21 168
Marketable securities 11,762 10,772
Total 11,783 10,940
Level 2 [Member] | Fair Value, Measurements, Recurring [Member]    
Assets    
Interest rate swap 2,616 1,807
Total $ 2,616 $ 1,807
v3.24.1.u1
Fair Value Measurements and Disclosures - Summary of Carrying Values and Estimated Fair Values of Promissory Notes (Detail) - Equipment Promissory Notes [Member]
$ in Thousands
Mar. 30, 2024
USD ($)
Carrying Value [Member]  
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]  
Debt instrument $ 190,077
Estimated Fair Value [Member]  
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]  
Debt instrument $ 186,944
v3.24.1.u1
Leases - Summary of Lease Costs (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Lease cost    
Operating lease cost $ 8,801 $ 9,030
Short-term lease cost 2,752 4,036
Variable lease cost 1,449 798
Sublease income 0 0
Total lease cost 13,002 13,864
With Affiliates [Member]    
Lease cost    
Operating lease cost 2,426 2,411
Short-term lease cost 17 7
Variable lease cost 242 199
Sublease income 0 0
Total lease cost 2,685 2,617
With Third Parties [Member]    
Lease cost    
Operating lease cost 6,375 6,619
Short-term lease cost 2,735 4,029
Variable lease cost 1,207 599
Sublease income 0 0
Total lease cost $ 10,317 $ 11,247
v3.24.1.u1
Leases - Summary of Other Lease Related Information (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Other information    
Cash paid for amounts included in the measurement of operating leases $ 8,984 $ 8,881
Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,614 12,188
Right-of-use assets change due to lease termination   $ (64)
Weighted-average remaining lease term (in years) 3 years 4 months 24 days 4 years 1 month 6 days
Weighted-average discount rate 6.20% 5.80%
With Affiliates [Member]    
Other information    
Cash paid for amounts included in the measurement of operating leases $ 2,439 $ 2,382
Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,271 0
Right-of-use assets change due to lease termination   $ (64)
Weighted-average remaining lease term (in years) 4 years 3 months 18 days 4 years 8 months 12 days
Weighted-average discount rate 7.70% 7.10%
With Third Parties [Member]    
Other information    
Cash paid for amounts included in the measurement of operating leases $ 6,545 $ 6,499
Right-of-use assets obtained in exchange for new operating lease liabilities $ 343 12,188
Right-of-use assets change due to lease termination   $ 0
Weighted-average remaining lease term (in years) 3 years 3 years 9 months 18 days
Weighted-average discount rate 5.50% 5.20%
v3.24.1.u1
Leases - Schedule of Future Minimum Lease Payments Under Operating Leases (Detail)
$ in Thousands
Mar. 30, 2024
USD ($)
Lease Disclosure [Line Items]  
2024 (remaining) $ 26,371
2025 29,101
2026 22,682
2027 12,533
2028 5,522
Thereafter 3,672
Total required lease payments 99,881
Less amounts representing interest (10,873)
Present value of lease liabilities 89,008
With Affiliates [Member]  
Lease Disclosure [Line Items]  
2024 (remaining) 7,183
2025 8,013
2026 5,481
2027 4,375
2028 4,189
Thereafter 3,672
Total required lease payments 32,913
With Third Parties [Member]  
Lease Disclosure [Line Items]  
2024 (remaining) 19,188
2025 21,088
2026 17,201
2027 8,158
2028 1,333
Thereafter 0
Total required lease payments $ 66,968
v3.24.1.u1
Transactions with Affiliates - Schedule of Amounts Charged to UTSI (Detail) - Affiliates [Member] - USD ($)
$ in Thousands
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Related Party Transaction [Line Items]    
Cost incurred for services provided by CenTra and affiliates $ 31,173 $ 27,178
Insurance [Member]    
Related Party Transaction [Line Items]    
Cost incurred for services provided by CenTra and affiliates 21,421 20,256
Real estate rent and related costs [Member]    
Related Party Transaction [Line Items]    
Cost incurred for services provided by CenTra and affiliates 3,508 3,266
Administrative support services [Member]    
Related Party Transaction [Line Items]    
Cost incurred for services provided by CenTra and affiliates 1,867 1,605
Truck fuel, maintenance and other operating costs [Member]    
Related Party Transaction [Line Items]    
Cost incurred for services provided by CenTra and affiliates 4,341 1,938
Contracted transportation services [Member]    
Related Party Transaction [Line Items]    
Cost incurred for services provided by CenTra and affiliates $ 36 $ 113
v3.24.1.u1
Transactions with Affiliates - Additional Information (Detail)
 1 Months Ended 3 Months Ended
Jun. 30, 2022
USD ($)
Mar. 30, 2024
USD ($)
Facility
Apr. 01, 2023
USD ($)
Dec. 31, 2023
USD ($)
Related Party Transaction [Line Items]        
Number of facilities leased from related parties occupied on monthly or contractual basis | Facility   29    
Insurance, claims and other receivables   $ 16,100,000   $ 14,300,000
Due to affiliates   $ 23,300,000   $ 20,700,000
Other Liability, Current, Related Party, Type [Extensible Enumeration]   With Affiliates [Member]   With Affiliates [Member]
Due from affiliates   $ 1,100,000   $ 700,000
Other Receivable, after Allowance for Credit Loss, Current, Related Party, Type [Extensible Enumeration]   With Affiliates [Member]   With Affiliates [Member]
With Affiliates [Member]        
Related Party Transaction [Line Items]        
Due to affiliates   $ 23,314,000   $ 20,737,000
Payment to acquire multi-building $ 8,300,000      
Initial deposit   200,000    
With Affiliates [Member] | Trailers [Member]        
Related Party Transaction [Line Items]        
Cost of purchase from an affiliate   $ 1,600,000 $ 0  
v3.24.1.u1
Transactions with Affiliates - Schedule of Services Provided to Affiliates (Detail) - Related Party [Member] - Affiliates [Member] - USD ($)
$ in Thousands
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Related Party Transaction [Line Items]    
Revenues $ 890 $ 162
Contracted transportation services [Member]    
Related Party Transaction [Line Items]    
Revenues 230 102
Facilities and Related Support [Member]    
Related Party Transaction [Line Items]    
Revenues $ 660 $ 60
v3.24.1.u1
Stock Based Compensation - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Millions
 1 Months Ended 3 Months Ended
Feb. 29, 2024
May 31, 2023
Mar. 31, 2023
Sep. 30, 2021
Feb. 29, 2020
Mar. 30, 2024
Apr. 01, 2023
Dec. 31, 2023
Jan. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Common stock, shares authorized           100,000,000   100,000,000  
Total fair value of shares vested           $ 0.7 $ 0.2    
Total unrecognized compensation cost           2.2      
Share based compensation cost is expected to be recognized on a straight-line basis in fiscal 2025           0.4      
Share based compensation cost is expected to be recognized on a straight-line basis in fiscal 2026           0.8      
Share based compensation cost is expected to be recognized on a straight-line basis in fiscal 2027           0.6      
Share based compensation cost is expected to be recognized on a straight-line basis in fiscal 2028           $ 0.4      
Common stock [Member] | Non-Employee Directors [Member]                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Shares of restricted stock granted   3,549              
Restricted stock award grant date fair value per share   $ 25.42              
Restricted Stock [Member]                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Shares of restricted stock granted 21,105   34,611 2,355   21,105      
Restricted stock award grant date fair value per share $ 31.96   $ 27.59 $ 20.46   $ 31.96      
Restricted Stock [Member] | Vesting on January 10, 2026 [Member]                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Number of shares expected to vest                 20,000
Restricted Stock [Member] | Vesting on January 10, 2028 [Member]                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Number of shares expected to vest                 10,000
Restricted Stock [Member] | Chief Financial Officer [Member]                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Shares of restricted stock granted 5,223   8,441   5,000        
Restricted stock award grant date fair value per share         $ 17.74        
Restricted Stock [Member] | Chief Executive Officer [Member]                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Shares of restricted stock granted 5,160   9,134   60,000        
Restricted stock award grant date fair value per share         $ 18.82        
v3.24.1.u1
Stock Based Compensation - Summary of Status of Nonvested Shares (Detail) - Restricted Stock [Member] - $ / shares
 1 Months Ended 3 Months Ended
Feb. 29, 2024
Mar. 31, 2023
Sep. 30, 2021
Mar. 30, 2024
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Shares Non-vested, Beginning Balance       100,458
Shares, Granted 21,105 34,611 2,355 21,105
Shares, Vested       (33,515)
Shares, Forfeited       0
Shares, Ending Balance       88,048
Weighted Average Grant Date Fair Value, Beginning Balance       $ 21.76
Weighted Average Grant Date Fair Value, Granted $ 31.96 $ 27.59 $ 20.46 31.96
Weighted Average Grant Date Fair Value, Vested       20.89
Weighted Average Grant Date Fair Value, Forfeited       0
Weighted Average Grant Date Fair Value, Ending Balance       $ 24.54
v3.24.1.u1
Earnings Per Share - Additional Information (Detail) - shares
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Earnings Per Share [Abstract]    
Weighted average non-vested shares of restricted shares 21,011 33,348
Antidilutive securities excluded from computation of earnings per share, amount 0 0
v3.24.1.u1
Dividends - Additional Information (Detail) - $ / shares
 3 Months Ended
Feb. 14, 2024
Mar. 30, 2024
Apr. 01, 2023
Earnings Per Share [Abstract]      
Dividends payable, date declared Feb. 14, 2024    
Quarterly cash dividend declared per common stock $ 0.105 $ 0.105 $ 0.105
Dividends payable, recorded date Mar. 04, 2024    
Dividends payable, date to be paid Apr. 01, 2024    
v3.24.1.u1
Segment Reporting - Additional Information (Detail)
 3 Months Ended
Mar. 30, 2024
Segment
Segment Reporting [Abstract]  
Number of reportable segments 4
v3.24.1.u1
Segment Reporting - Summary of Company's Reportable Segment Information (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 30, 2024
Apr. 01, 2023
Segment Reporting Information [Line Items]    
Revenues $ 491,907 $ 437,396
Income from operations 75,092 38,196
Operating Segments [Member] | Contract Logistics [Member]    
Segment Reporting Information [Line Items]    
Revenues 313,548 211,296
Income from operations 81,466 27,781
Operating Segments [Member] | Intermodal [Member]    
Segment Reporting Information [Line Items]    
Revenues 76,715 111,026
Income from operations (8,046) 6,812
Operating Segments [Member] | Trucking [Member]    
Segment Reporting Information [Line Items]    
Revenues 69,655 79,715
Income from operations 3,669 3,789
Operating Segments [Member] | Company-Managed Brokerage [Member]    
Segment Reporting Information [Line Items]    
Revenues 31,000 33,956
Income from operations (2,488) (375)
Other [Member]    
Segment Reporting Information [Line Items]    
Revenues 989 1,403
Income from operations 491 189
Intersegment Eliminations [Member]    
Segment Reporting Information [Line Items]    
Revenues 1,057 2,312
Intersegment Eliminations [Member] | Contract Logistics [Member]    
Segment Reporting Information [Line Items]    
Revenues 71 301
Intersegment Eliminations [Member] | Intermodal [Member]    
Segment Reporting Information [Line Items]    
Revenues 437 965
Intersegment Eliminations [Member] | Trucking [Member]    
Segment Reporting Information [Line Items]    
Revenues 55 140
Intersegment Eliminations [Member] | Company-Managed Brokerage [Member]    
Segment Reporting Information [Line Items]    
Revenues $ 494 $ 906
v3.24.1.u1
Treasury Stock - Additional Information (Detail) - shares
 3 Months Ended
Mar. 30, 2024
Dec. 31, 2023
Treasury Stock, Value [Abstract]    
Retired shares of its treasury stock 4,722,877  
Shares held in treasury 0 4,722,877
v3.24.1.u1
Commitments and Contingencies - Additional Information (Detail) - Workforce Subject to Collective Bargaining Arrangements [Member] - Unionized Employees Concentration Risk [Member]
 3 Months Ended
Mar. 30, 2024
Concentration Risk [Line Items]  
Percentage of employees concentration 32.00%
Percentage of employees subject to contracts that expire in 2024 45.00%
v3.24.1.u1
Subsequent Events - Additional Information (Detail) - $ / shares
 3 Months Ended
Apr. 25, 2024
Feb. 14, 2024
Mar. 30, 2024
Apr. 01, 2023
Subsequent Event [Line Items]        
Dividends payable, date declared   Feb. 14, 2024    
Dividends declared per common share   $ 0.105 $ 0.105 $ 0.105
Dividends payable, recorded date   Mar. 04, 2024    
Dividends payable, date to be paid   Apr. 01, 2024    
Subsequent Event [Member]        
Subsequent Event [Line Items]        
Dividends payable, date declared Apr. 25, 2024      
Dividends declared per common share $ 0.105      
Dividends payable, recorded date Jun. 03, 2024      
Dividends payable, date to be paid Jul. 01, 2024      
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