ULH - Earnings call transcript Q4 2020 | Universal Logistics Holdings, Inc.

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Operator

Hello, and welcome to the Universal Logistics Holdings Fourth Quarter 2020 Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

During the course of this call, management may make forward-looking statements based on their best view of the business as seen today. Statements that are forward-looking relate to Universal's business objectives or expectations and can be identified by the use of the words such as belief, expect, anticipate and project. to from uncertainties, those subject could actual are materially differ expectations. statements risks and and results Such

As a Mr. you Mr. reminder, Financial of is Executive now Finance this Mr. may Officer; conference is pleasure Officer; Relations. Fitzpatrick, introduce begin. being and to and Mr. your Vice Beres, Investor Phillips, host, Jude Tim Steven Chief my Phillips, Chief recorded. President It you. Thank

Tim Phillips

fourth and thank you joining quarter Thank earnings and Holdings call. good morning you Universal for Logistics

by impressed level continuously team's I'm nation. the as that came XXXX, was on reflect by of at gripped robust high pandemic that adapt COVID-XX quickly to a presented The much which execute to year our in our a and to challenges. As the ability year the automotive standstill start upended work, so and such many a import

year. the respect men your best-in-class strong Thank to a customers. that the our last I'm our and you I'm truly confident efforts. to during The as and and and for Universal protocols challenging to second protect of women hard savings positioned of result the Universal we well implemented business support in people-driven with times, a was associates people continue measures Universal quarter surrounded necessary future. team. time, our cost business I team's back was a up is filled ability and the it displayed safety uncertain with half for work the one, to be our stronger the second service to today, the the end in to COVID extremely The truly came a company. with navigate the same over many these expect that challenges the our provide I'm year. customers resilience in continued half of was and and still will be admiration racing At presents make to the pleased and foreseeable us when challenges our

quarter. of a million, In line. the on earnings excellence. were focus best reported The of quarter Universal the earnings of for $XXX reflect also quarter estimates Fourth yesterday's Universal's on top bottom beating represented fourth both share results record. per revenue on Now fourth quarter $X.XX continued on release, operational earnings earning operating and

We execution continue to work service progress lines. all on on top the level sequential and can excited and made. value-added about solid the be increase to at levels The attributed improving line are we've dedicated, in growth brokerage

which a we sequentially While pleased and traditional by our similar transportation production humming slowdown. intermodal saw XX%. quarter and services. normal through margin QX dedicated the XXXX drop beating volumes to while was business, lines Backlog to service countered QX, are slight reduction, income that than to the operating which increasing truckload logistics kept report includes auto operating normal our revenues higher in holiday even production contract our demand The led value-added fourth

successful We basis. $XX also wins in incremental securing locking are additional on annualized million in revenue of business

agent-based by and expect be was run It We includes group, new bag QX a in rate of trucking company-managed full award the in to mixed which our XXXX. trucking.

during a dry drivers to both for experienced the the inhibitor and biggest climbing We market. be to terminals securing agents to Our on the company growth competitive drag did rates operating freight volumes was quarter. quarter that extremely the an however necessary in in supported lower continue move van performance

recovery into a year-over-year capacity goods Low increased half volumes should wrapping pricing we and positive on as tight in and saw on performance, yet sequentially, very freight the flatbed inventory loads maintained also setbacks but was shipping up and these and strong of in Despite backdrop a a year. modest see recent basis, a a full move laggard but to industrial I products. view customers our provide for metals of Our supporting optimistic XXXX. the business have we uptick

to and brokerage quarter Our do to in profitability. footing and loosening was operation their the regain able company increase Banks capacity. slight rates of returned a

Our customer Gross some margins margin make than single contracted pricing that able headway four. gross about capacity in company points quarter of the through basis procurement. digits, of XXXX. disciplined to business calculated managed an to and for in our quarter XXX repriced was finished successfully leading was third operating brokerage XX% ratio operation high the better quarter We

XXXX. expect to be this We tailwind into

volumes the group. import ton for also than rate operating performance quarter, we fourth drayage congestion this intermodal anchor to This opportunity the an in means of to provide in of also an however, anticipated and high work intermodal returning would were group. slower a improve For trucks momentum exceptionally to have our

doubling are all down compensation drivers reviewing and on packages We initiatives efforts, to recruiting work. renewed markets of entice to have our our major back at

to our from hearing optimistic coming expand companies that improving which service very what As Year, momentum remain and on unit increase in volume at franchise lines. on the Based our drive With melded our reengineered see and drayage and flatbed will leverage national in the drayage we one New scale believe into for we with truckload operating look focus real will and we're for growth, will forward, the cautiously of through prospects. business our profitability. our intermodal allow acquisition bullish operation out manufacturing to further should continue rates sentiments remain solid volumes we on footprint. are bullish this we strong are XXXX us for of upsides drive to Chinese we network Any all are customers, the and and

our overhaul at our us to our while contract our asset With allow negotiations. resources some share continue allowing with for the regional brokerage, that managed pricing have believe will are optimization. to markets and we strategic and backs win company freight local and customers' facilities, on pleased company we focusing run and facilities, We

auto continuing We truck production part to additional freight our associated chop and services first of of form and XXXX. production predicting on expect automotive third-party will and the place the We customers' to year on lack additional well partnerships X light trucks carrier SUVs move focus in with Class our Class the do optimistic a extremely with significant semiconductors space. relationship to in and the We a carriers sell X increase. in little with remain

into group extremely to our our dedicated layer to and business has continue increased past in turnaround of the with over We that year. assets operations wins dedicated We're the optimization existing allowed margin us profile. the improve pleased

we to automotive verticals, expand We space. also some experienced in – should continue allow the that diversification also of new which should valleys which into peaks traditionally the and alleviate customer

this engine far into a group growth high the have to be We expectations future. transportation our expect for dedicated and

provide and on in discussed transportation some major the previous we quarter. contract and we launches the with launching to we supply to and The As several ability continue of in uniquely are our execute have calls, value-added logistic team’s service service complicated most complex first the expertise chains dedicated world. demanding our customers. these have to in I awards confidence customers world-class every

stated like safety everything ultimate auto and XX,XXX-plus associates, success before, the the positioned do, freight With health on services call we manufacturing now over to backdrop well solid Jude. Universal’s capitalize goods I turn believe the extremely our would the As depends to we delivering environment the to frontline. and Jude? to I safety to in XXXX. are a and as on I’ve essential of our

Jude Beres

$XX.X operating per which to income $XX.X total revenues of of the on everyone. compares million or the XXXX. share $XXX.X compared total per to share morning, consolidated operating million, million, for Good Tim. Universal of quarter operations year Logistics operating $X.XX Holdings earlier. revenues reported quarter of million $XX.X $X.X million fourth in $X.XX increased million $XX.X to net was million, EBITDA or fourth XXXX. This $X.X one in quarter of million to million income from of Thanks, income compares one on $XXX income of $XX.X earlier. year the Consolidated net

margin fourth respectively, Our XXXX. metrics quarter of and the and quarter XX.X% of fourth in XX% for operating XXXX the X.X% and revenues. These total are to X.X% EBITDA operating of compared margin

segment. insights our of are Both reflect our two discreetly. new still reporting As and release, The brokerage and logistics, contract previously and the of Universal of reportable dedicated report updated both trucking from our nature into mentioned our also to the offer offering. this intermodal, Legacy four quarter, now structure to Beginning brokerage, segments of reported performance better of reported. these aggregates operating segment which intermodal company-managed Transportation The our transportation business. reporting the We the four the will instead segment results company-managed segment the duty in its segments just segments of includes this truck are investors expanded name service further segments business. Universal heavy value-add,

income from $X.X million on million million increased operating compares operating performance of in of to segment Now the revenues. XXXX. our quarter million In operating Contract total million segment the for total on looking fourth quarter Logistics of revenue of income XXXX. our fourth to $XX $X.X $XXX.X of This $XXX at operations

the quarter versus margins Intermodal auto X% year. normal compared X.X% the robust disrupted the quarter X% our operations. $XXX operating you Operating the segment, UAW to declined which If same to $XXX.X a quarter, revenues period fourth strike early XXXX included million of recall, a labor production. in were in for million on last In

versus increase which of XX% margins in income the of also We though year. was load, last to the revenue XX.X%, XX% to for for per quarter our decreased a truck mitigated our compares hauled. The Operating XX.X% factors our in in decline decrease income $X.X were operating operating and million This a productivity income the in loads truck million by were to million. the number average count. intermodal able X.X% average While $X.X decrease in $XX.X from operations quarter of primary fourth XXXX. decline

by intermodal squeezed operating of demurrage expenses. due line Additionally, operating in charges margin top $XX.X basis million pass-through included both was XXX points revenue approximately to and

operating to million the ratio was fourth Intermodal declined the Trucking for operating company-managed and of revenues both agent-based $XX XX.X% in Excluding includes our million demurrage, our operations, quarter $XX.X same segment, the quarter the In segments XX.X% trucking which compared last XXXX. to for quarter year.

of increased compared quarter income operating While operations the XXXX. of million an loss to in from million fourth $X.X $X.X to

As $XX.X year. the X.X% from operating X.X% charges per X.X% segment $XXX,XXX Brokerage X.X%. Company-managed down release, mentioned compared quarter operating year. count load $X.X compared quarter million XXXX. margins brokerage to income million to Operating million $XX.X in $XXX,XXX were quarter for the in year, and last X% versus same to the Xx down fourth of XXXX. was to last for revenue fourth for loss of XX.X% were the in operations the of up while rose an litigation $XXX,XXX XXXX. fourth last to X.X% decreased segment while Truck loads versus revenues XX% compared the year-over-year, quarter Company-Managed In was our margins experienced Trucking the were quarter quarter of Operating the quarter of in

cash load of sheet, marketable net million On However, revenue debt the held XX%. bearing the end for was last same versus of our totaling million million at X.X% period. margin costs the Gross we million up $X.X cash balance of and per $X.X equivalents X.X% for of quarter totaled year. interest was $X.X issuance and Outstanding securities. debt $XXX.X the period

was were Excluding our ASC month XXX, $XX.X bearing related $XX.X year. net the Xx leverage for totaled XX Xx. Universal’s total liabilities quarter for target million to lease the EBITDA. and Capital EBITDA is between and X.Xx expenditures interest million debt ratio to

business Logistics full wins estate forecasted Contract $XX to expected the Our for to capital $XX XXXX million additional million the strategic be are real purchases. in or before range in segment our year any expenditures

revenues come and per expense between are our And first the X% interest the of Universal’s regular XXXX million million. Directors quarterly dividend. $X.XXX Board business declared $XX margins expecting remained to $XXX to XXXX, range. million X% in and If $XXX finally, is quarter between in we $XX for of million line operating and stable Our expected top for share environment the

to With quarters’ shareholders is the Thea, and April expected of ready to questions. to of XXXX, X, record March payable close some we’re take dividend that This be XXXX. is business X, on on at paid

Operator

ahead. [Operator question Wetherbee Instructions] go Citi. Chris first come from with The will Please

Chris Wetherbee

to I guys. new start maybe morning, guess, Good wins. business I Thanks. on wanted the

about aligned business you about stands bit new the you of more where detail you think, couple progresses? of Can a on as And executing into that might sort comments and there? then pipeline how XXXX that a I today think go broader maybe little wins. some

Tim Phillips

couple quarter. business four, of The new amount remember wins is going million for the a we that the that XXXX, that XXXX, wins thing sometime on we and either quarter in some we transportation into the changes should we'll seeing on of once Chris. customers that those between or last equate or if $XXX This business somewhere our a reference the from to full Tim, scope I remarks entered we've million we're annual had, In that, launch some The the was new additional see it. second in did some rate business additional fair lanes new opportunity had run I business, you at on XXXX. least Yes. the lanes, calls, dedicated business of elaborate getting adding wins of last in over in this didn't amount $XXX ability through one prepared one of in half significant into quote

of dedicated projects see think these That with we that. also there's of some some that some additional we'll lanes. So out runway new on business comes

wins, whole remains specific larger the and if on some Now, those reflect I pipeline a pipeline as full. of in relatively for back the

definitely we say on $XXX leaves next but we're the million, wouldn't have I us. call, talk we're tomorrow And about it closing pipeline and thing our on cautiously optimistic I that I've some on think to taken pipeline quarterly Now come as the where on is the biggest excited of it to ability and the so looking execution our that. these has the driven extremely they sales bear, it seems projects team, about with at like operational closing from

to drivers to things, On have here, probably a opportunity work. to seat calls. sure and amount that on able a matter type the be have side probably you not of us heard there's of only bid of the move heard just It's but transportation making of that other you've the we in fair

the either robust. So optimization logistics Things consideration hitting, people seats in remains might bring can as the pipeline put going whole, the that making a to place. that to be is and chain the sure people we into be or can of place making sure just supply we

one is concerns our number XXXX. one for – So people of our

Chris Wetherbee

Yes.

think question then, kind around with opportunities mentioned in And XXXX. was of just – Okay. I my the getting to drivers. margin hand-in-hand be capacity, about goes And you going next sort of goes that getting what

And about a can gets lower of So guidance, driver sort your on end inflation or you you the to acquisition capacity the in or end? confidence how sort versus costs little talk level acquisition what the do higher think of wage margin bit included about that? we

Jude Beres

trucking guidance year we operating feel Yes, confident the really the amazing both full in quarter. well for aware. for do businesses start. I'll very the think about and margin leverage as Chris, I and you're Scale things

So the capacity any can additional we is incremental margins that those end. drive space going intermodal bring to the to in, really higher to particularly

trucking I in inflation of inflation that happen our haven't where that shown So we lot drayage happened, think has business. already rate seen but in the rates businesses, we've a as is

with a think driver So and rates the still we of the robust be suppress outlook, profitability. could real that year-over-year big

in seats. that Tim trying addition more drivers In initiative to the get mentioned to of

these ability headwinds confident So us targets. obviously biggest we I and for are hit to there. the going We margin get our say, the confident very very feel people forecast. be drivers to feel to about about But

Tim Phillips

increases. echo said. there, And Yes. And space driver of is acquisitions old, we six to vetted has in through give we're only we that. Tim; Remember optimistic everything a the some the look consolidation the recent if pay we and on most base, I at we knew we the this went really Jude a We had the one customer base. vetted franchise intermodal year

value-added because about your on tight. course, come start that a things question, a execution do setup we're on remember, we're more customer, runway to be the to that to the $XXX are wins revenue. million is of to we're a lagger going optimistic higher are so the plus but All business And of prior our percentage that's of that continue for talking seeing going and So make-up from into of side. was full the in margin to overall rate one, it back

goal. optimistic the on I'm I Jude So had very margin said, think

Chris Wetherbee

That's one this. the No. I a guess couple of side, Okay. parts more And yes, helpful. maybe on to intermodal then,

like I a quite largely through guys. just demurrage, it obviously, I that's sounds for elevated, first, pass understand to but sure So want make the you

an intermodal deceleration sailings of New Year that perspective. I in start to first curious in as Do want Do play need and and of sure goes get the from you of it blank to margin half and So maybe whether number about kind how kind to we ability outlook that and what's point? I two, unlock understand have the progresses? Chinese the might to how Just to XXXX impacts terms at And hand-in-hand, of all? that just intermodal the that sort probably story? just make that then dynamic you congested are things update the

Jude Beres

talk I'll just demurrage. about the quickly

So dollar in containers had inability in directly charges. basis. to XXXX, for only basically yes, for timely the QX these QX, it a out was and we passed get $XXX,XXX to dollar types about of related related to the of port in through that's In example,

definitely back end is get The to that So customers themselves, pretty the operating them going trying to to and pay was margin that substantial. not XXXX with directly is a either ratio phenomenon. the to unique trying it get team because on delta versus the obviously, business, or QX and some

Tim Phillips

answer alluded of a and that saw chain The markets. complexities major quarter yes, it was congestion correctly. hit some driver to, of the didn't there's in the to LA what into fourth the your supply efficiencies question that. in go lot And Jude it congestion, and the And things the major of just a on congestion there, and just

step it remember Because we we the factories Year inland there. some if seeing major your efficiencies will still specifically unusual ports week, feeds of Chinese alleviate Chicago. backlog do your into through the Chinese the the Beach. the even same systems of hopefully Long some LA, West as Coast, which that So we produce, that New help of congestion is we're backlog and think next also feel port of some on Year, But that like New

So not only some see like intermodal a little about thing having having really balloon, internally. supports it's some bit from we're it, congestion did freights we're inland the to displacement the a that to of replacement so, The the with the steamship a port or line area if advantage regularity well one and standpoint. very locations the at positioned or customer a fluency future us into moving And country, volume we happy another inland now, break of made taking port of but it's decision push of city. into different a in of only there, times into

optimistic. to Yes, it'll headwind, a it. I fluency I'm I'm short-term of the but a expecting be as little think more year I progresses, bit So think,

Chris Wetherbee

Okay.

Okay. That's and Appreciate guys. really helpful thank Tim Jude, you. it, color

Jude Beres

Thanks, Chris.

Tim Phillips

Thanks, Chris.

Operator

response do Chan We a from Instructions] [Operator Stifel. with have ahead. go Bruce Please

Bruce Chan

Gents, very print. a good And morning. on congrats nice

that left. side there Just risk guess glass-half-full completely put responds few your if down? the, more the from complicated where it any the how you maybe my maybe normal kind on in facilities balance very then it's softening a are your us I cyclical opportunity the forecast, and is to are half-empty, of going it to of of in But outlook year. Tim, model sources big from here your remind aren't my good a call comments be sounds for like good shut

Tim Phillips

Yes.

there that don't noise, that at if a for – we look of your hurdles of potential the whole and shortage. expect XXXX? a on congestion out on is, little near of feeling is right is would around I the there getting lot I term, always plan through there there you semiconductor space on to as go we're I think, automotive roadblocks intermodal, Yes, there. there bit the say is be

we a those over see of week, player and So locations are and various you that the listed in some degrees. in those plants plants last locations

half a latter those into So little so could we pickup and would that we components and of that half types product push there's volumes the that, demand half wrinkle might've the the just and year. the that of in see production first been much would time that XXXX. what first the just year, lasts it increase, for that this our make-up up into throw of where pent length bit think there's But of would, watched I disruption shortage would the a of potentially of

at plan sit you're individual, that put them, The I'd – a thing we and human the we've the new with And a And, but tight, keep here doesn't other yes, the eye before a far job we making is I'm that keen all launches game we've think our because people. even going disruptive and in and wouldn't make getting for got could scenario we're new without it, this on optimistic hitch. side, launches going key couple we and of darn that need it sure a of of foresee asset. first we the cadence launch we we off that transportation units, quarter on it. logistics sourcing one the Because know we if wins be of on the trucking a front say, definitely side these in these side good major got business pretty earlier, without market's looking play mentioned doesn't to contract have got but on is we we've I And in labor a any that normal with together. I'm keep our for – something that that, as sure that

Bruce Chan

that cycle? follow-up of recovery your you comments, How of from your and some to much best auto Okay. get X just color; we're production. maybe That's sense what's on – kind and around and great maybe in of do as far particularly what inning Class those customers as visibility

Tim Phillips

are about X? Class Bruce, talking you

Bruce Chan

on on as Auto, side well well? Class the as as passenger Maybe X Yes.

Tim Phillips

the just basis they on connected plant, we're mean, JIT I I for say, to because would schedule. actually, the auto the production us win-by-win So to give yes. a We their

be built plant service, every units are for week. we So going we every to that know what

automotive any visibility to in dialed production. have we So

And everyone Class going we're the for else it seeing On year. last that star was where be I it's things same just XXXX. looking at to think XX% is the up side, the from X

we course of you on what just a revenue. So, as temperamental star bit And the almost as, than could it or that XX%, revenue be Class far as If XX%, that's be X XX%, It our worse star be is could better know. is little saying. follow but than business the is star is said, that it's identical the what simple. XX%, to up our up can

Bruce Chan

final brokerage quarter, pricing enough. compensatory Okay. not question then a of and Fair is in some I nice just and how found side, And competitors. of permanent? here disciplined Some right on the is that your competitive past What's a potentially the it the competitors know religion temporary, about recovery talked from third those sense there on now? passionately from you'd Jude, is aggressive environment

Jude Beres

to a the found I large know little spend whole. look the bit transportation as arms being hold It's One if happens. religion, I and their around market don't be a in brokerage at it they ideology space in of hostage; a different. their able that marketplace. may it don't put think still the all We person

through way the customer. in some back I been from approach We it, our forward went quarter about in it's we only a because yet the XX% the – Not from the I'm they're rebid like is facing business think fourth and results because at of quarter I in deep we've it positive sorry, but are what we all how said, we dive in still was this customer, took not fourth to playing the of the that overall are seeing. first of quarter. looked

come on I know a us but volumes than we've larger we some amount couple a bids, amount, volume Now, at have back competitors expected. don't saw I it, know how to do of larger treating the that a would

some concerning which making they me in some tells in decisions there more than fashion So, out had a the maybe people that there's past.

standpoint making one in yes, competitive We're side to be business how business up there's a a a it and we're for that XXXX, for front going the the of good that the it from volume. other from is to of in more to with our those strategic other main have do supplies. gain sure landscape, and carriers on side do is want shore there is the capacity out So facing we which sure units, our making feel we and focuses

can demand. we So with the match them

Bruce Chan

Terrific. helpful. Great. Thank you. That's

Tim Phillips

Thanks Bruce.

Operator

showing no further And responses. [Operator Instructions] I'm time at this

Tim Phillips

quarter excellent. appreciate quarter to the and dialing we fourth Well, a look and and everyone next in great truly day. again. of have call into I Thank sitting front forward you you

Operator

Ladies conference participating and gentlemen, thank in you today's call. for

You may all disconnect.

Universal Logistics (ULH) 5 Feb 212020 Q4 Earnings call transcript