ULH - Earnings call transcript Q1 2024 | Universal Logistics Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, and welcome to Universal Logistics Holdings First Quarter 2024 Earnings Conference Call. [Operator Instructions]

During the course of this call, management may make forward-looking statements based on their 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. Such statements are subject to risks and uncertainties, and actual results could differ materially from those expectations.

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

Tim Phillips

we Universal's morning, dedication. lot who a unpack worked today. team Universal your by in are let make you and thanking Call. but to everyone. the quarter tirelessly and start work you, Quarter Earnings hard to do good for Thank logistics couldn't best-in-class members joining it me XXXX this our First There's XX,XXX provider Thank We transportation off nearly without and

I most our bring the our to want brands space manufacturing recognizable with partnerships would for we efforts chains. supply continuously built The long-term in differentiate in the also recognizing model to what Universal thank business their we space. are value the and truly of the have customers some

Now for the quarter.

business the performance greatly dependent Our on quarter vary the segment. in individual first

and outsized extremely steady Our segments with for as contract was buoyed environment as our delivered delivering fall segment she Trucking transportation was continue transactional our but logistics our business, goes, results, QX haul a mid-single-digit certainly company-managed our expectations. their business I'm heavy to our challenging margins brokerage behind performance specialized overall, intermodal results. results. while pleased

million margin operating history. quarter XX.X%. and This -- quarter XX revenue, The best share Universal $X.XX per operational any $XXX.X share first of margin and in of was reported XXXX, of an earnings per for earnings Universal's the

the up and of be believe value-added XXXX, the contract end At Universal logistics to a XXXX. $XXX.X of our program largely for the in to to reasons. the contract In recent QX of managed we We million. end QX compared XX.X% number revenues see at will programs ramps strength This continue that of segment QX XX logistics the XX will end was by XXXX. to segment, increased completed award due in

There for interruptions the are fewer typically to contract shutdown strongest is logistics. OEMs' our production. QX First, quarter or

Class Secondly, has the consistent. SAAR The and X production doing XX million is auto remained industry well. remains over

under even auto the opportunities, wage customers labor or altering could but are are in more to high the cost lead solutions. cost, their OEMs transition As while seek pressure, our utilizing Universal's EV are addressing pressures. seeing The sector inflation plans, some we reevaluating lower service outsourcing

are We see to already beginning this.

in We XXXX half launching and new logistics beginning XXXX. programs the of have of several contract the back

segment decreased revenues load, while due Trucking load XX.X% X.X% haul to per decreased decrease X.X%. was revenue This also surcharges, fuel $XX.X in to million. a excluding

uptick year. business, business in We rest in to a see the of full specialized year significant later our the truckload of a expect which the has for book

while Flatbed some signs negative still volumes, are life. showing of year-over-year,

we expansive With territory, better volumes the ISM await now progresses. year the as in

the QX decreased $XX.X volume, line of to first Compared our in the XXXX. a haul to intermodal intermodal million less XXXX, decreased segment, In X%. revenues decrease in while than rates experienced segment XX.X% quarter XX.X%

Additionally, assessorial surcharge million. and revenue $X.X million fuel decreased decreased charges $XX.X

Any of We port although customers to volume the their locations. us for inland on both increases on continue outlook volumes, excited and some year. rail retail welcome Coast our see West help strained signs the in to are the should are and life profitability import return

in that not due partially quarter, continues the offset segment $XX was to X.X% capacity took an be market We brokerage Excess per constraint brokerage This in which by load, to million. revenue revenue on we near the term. the Company-managed decreased was to increase super XX.X% competitive, revenues do the per load. a back expect decrease and price. some in X% change biggest in to is share but

advantage have our rate competitive, pressures. market shippers and Pricing remains are transactional peers, been taking conditions. our to as experiencing extremely the volume Similar transportation industry business ongoing current of

some hearing our back are we customers of regarding year. side, optimistic positive half the the sentiments the from On

the It's are. imagine they Although bottom seen we we are start going at the of lower believe to the than of drayage hard already turnaround, and we the cycle. haven't truckload rates

remain foundations Universal's strong. transportation

truckload both is customers for a agent capacity providers. solution for business legacy and compelling Our

current With capacity including facing recruiting name entrepreneurial-minded and the support we compliant to offer few, pressures capacity the providers, insurance, provider. to a

years, also on recent In we network built freight a big drayage nationwide a major markets. have emphasis with

shop providers shippers drayage provides that network Our a match. unique few can one-stop

segment While back are on an black. volumes return the not we we dependent upswing strong in foundations, have in to the business

implementing brokerage are intermodal plans specifically and operational for the actively our transportation new We segments. segments,

We wealth of have and vast brought in new talent with experience. a leadership

any We remain identify drayage of processes the properties two our optimizing Port year. able continue We focused the on control costs to to Savannah we this our we network are And are evaluating out assets. of hyper additional acquisition possible efficiencies with to and the of manage. servicing our build to utilization

of the investments and We future intermodal our are bullish on show it.

chains you've are have we are changing, that a We've nearshoring in and Mexico. exciting. in supply opportunities seen the filings, very with opportunities see time As been Mexico agile for recent see in we many long Global trend. the become we and more

real, years continues a positioned be and both we Mexican the for value-added we are future trucking as new with Mexican grow, and to player to the and franchise footprint the key capacity in the business well come. wins planning in Our to are well expanding opportunities. Nearshoring market as actively is

and our marketplace. strategy. An a complement and core disciplined. of always our make Any cannot portfolio competencies. to distraction We addition a better opportunity is continuously M&A must more in opportunities and evaluate must acquisition remain us stronger be the the be part but competitive

though deals in remain M&A beginning elevated. is the market We even market have seen interest that the unthaw, to uptick rates and excited coming to are an

desired full totaled contract The and competencies make sure with profile. to our take to segment, margin our sales us to and opportunities our opportunities. billion. remains allows about As pipeline look logistics programs pipeline we robust fit be we $X forward which on alone selective Value-added dedicated choose they core nearly and

to our diverse with with are our Additionally, seeking service to more cross-selling ways value offerings. find we continuously opportunities drive customers current

The our continue manufacturing up exciting book, not segments. the heavy we see them. OEMs we new customers are auto service make agriculture, truck, logistics opportunities e-commerce and defense, contract only in Aerospace, with consumer to

mentioned, Universal in immune from I the is the transportation. As not challenges

cycle allows continue And environment, service us weather publish in record of results. to storm. this offerings strategy challenging Our complementary even to we any

We by have consistently found of ways outperform to the our contract and portfolio unique cycle, diversified franchise. throughout our led businesses logistics

take we proud first rebound for I'm in quarter the upcycle. I'm the confident a of the today, -- and stronger freight be that efforts to during of results position the stronger XXXX. very through next execution in our advantage will

higher-margin offering by margins validated services the of strategy business in our EPS freight and been record diverse Our while has weakness. despite market our investing

a to Once quarter. coming turn again, Jude? future you for Jude I the member of will over bullish optimistic for for call to financials to the the remain and like would I now the extend to Universal color contributions on remainder XXXX. I our thank on to team provide their and quarter. a of the more great each expectations

Jude Beres

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

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

at million revenue the earlier. transportation which businesses, $XX.X compared year our performance In on our million This income XXXX. and $XX.X on operating dedicated to for first million for million XXXX. the Looking of our revenues quarter quarter XX% operating of operating were from the operations segment $XXX.X of logistics income value-add XX% of to million total of revenues. total contract segment, total $XXX.X margins to operating in includes first increased X compares Operating of quarter $XX.X

previously January of XXXX. launched logistics the significant contract which to is first a expected XXXX, quarter X, As development program, be by complete in disclosed, we new substantially

program reported value-added The result logistics we approximately this operating program are contract which and costs million, services on in For are as segment. for of our generated million associated revenues of $XXX of and the Revenues XXXX, supplies XX% revenue expect included program total in was or recognized the the the to quarter recognize year in $XX.X of year. approximately full expense. operating first this the

of the Based the $XX approximately XX% second to end revenues program in this step the current million to during the million by the Then, third the generating additional of quarter, quarters $XX down expect on each to cadence, anticipate XXXX. XX% range of the in of to its complete we be period. revenues to $XX and million program we of fourth range $XX million to

that reflects guidance discuss program I second impact Our of will quarter. this expected the the during momentarily

intermodal in versus operations an operating $X were period for from million quarter million to million And year. of decreased last compares of the the our This same year. million. in to the decreased $XXX XXXX. income of XX.X million revenues segment. Operating million On to $XX.X $X.X to to compared Operating operating XXX.X quarter income $XX.X last first $XX.X ratios loss

year, X.X% to first $XX.X decreased in In for $XX.X to the our same $XX.X in the last income million operations million. $X.X million trucking quarter last were operating quarter the year. XXXX. and income compares of to margins versus quarter from X.X% of compared Operating segment, This operating for revenues $XXX,XXX decreased $X.X to quarter million million the

$X.X first from managed $XX an and of decreased $XX the million. company million compared our of brokerage the $X decreased compares revenues an quarter income for XXXX. to operating quarter $X.X to loss in to This year, same operations last to loss $XXX,XXX million the in In segment, of operating operating million million quarter

brokerage operating ratio year. X.XX of Our reported last company-managed XXX.X versus segment an

$XX.X our debt million costs balance and securities. million. million cash held Outstanding totaling $X.X million sheet. of net equivalents and totaled debt marketable $XX.X of to We $XXX.X of interest-bearing issuance On cash

to related were EBITDA liabilities $XX.X million. was the net lease for quarter Capital interest-bearing XXX, X.XXx. our Excluding to debt TTM ASC expenditures reported

the be and come we full expense $XX the $XXX million. million in in For $XX to and $XXX capital interest year, between to expenditures expecting to are million range million

mentioned range. XXXX, earlier, and contract cadence quarter million margins program the to on XXXX XX% For and to are the for $XXX second the -- revenues operating line of X% between the current new expecting $XXX we operating based in top expected logistics environment million of

Finally, Wednesday, quarterly per our $X.XXX of declared Board dividend. Universal's Directors share regular

This of of the record be to XXXX, business close on X, expected quarter's July is paid at June is to XXXX. X, dividend and payable shareholders

we're Joelle, ready to that, With questions. take some

Operator

Chan first Bruce Stifel. [Operator from with comes question Instructions] Your

J. Bruce Chan

the Clearly, is results market Congrats. the morning. this liking here

about, thing. talked program you this clarify of logistics couple the you're just on be next to or by ramp-up. want Just I'm expected a that whether completed of to Is assuming this year a about the one-off namely entire things kind correct? that talking that contract program if is just is

Jude Beres

Yes, the additional business XXXX phenomenon. It's of be phenomenon economics correct, Bruce. this substantially this a described project X will a It's But business with a that complete X-year particular is this possibility year. the of -- in future. the we

J. Bruce Chan

it. Got

Okay.

rate clearly, So you a coming safe, parse uplift once very sunset the us the contract on kind kind from that the the of mix undersell rest portion what's can out business. is towards leverage look this big just to of sustainable beneficial end, kind program? a existing progress not logistics what this of run of contract margin And then And contracts? of like the is program? But what for maybe here, margin business in you help here ultimately, to should from which

Jude Beres

Yes.

into had this specific get we one, this on economics is So $XX to be $XX just between we're million million the the in QX. in and additional not of contract million in revenue $XX business million what can QX. going we Bruce, in of and QX customer think then to QX We was reiterate there's million but going basically around $XX $XX of somewhere

little this over particular over at particular XX%. say just is at better end rate would our of than the this that a we've to year. its after continue the operate The -- development, business or X will this that past I business X run contract quarters, seen

J. Bruce Chan

to onetime that Got then Or about any this one a we should really thinking similar final believe here. there be one? attract be question to just like it. opportunities able of Is just kind as this reason you'd And windfall?

Jude Beres

the a Bruce, is balance thing, that great Well, sheet. one we have

We are levered. slightly

one able we location we've of in business been So been across logistics to the to have this able mid-XXs, the contract to started this since business XX in founders a -- countries. Flint, grow from programs with company four Michigan

Universal are to the type open are for wants. opportunities the go of solution So any to continue we presented for I a any is that And that customer be that of would type say just to to team. going

Tim Phillips

I solution. And level And value. we Tim, of -- Bruce, expertise I court and I that. logistics we offer we'd a willing the more would of add We them exceptional think to excel when holistic at have many this look add to would to think as be

J. Bruce Chan

Okay. appreciate looking then Yes. maybe If mistaken, below more kind prepandemic to some there. not comments, bit up on SAAR, levels I'm just here. I little still of And color. of follow just color that your to get maybe on a Tim, we're

they're as what what consumer expecting color I the fleet customers refreshment. you demand ramp-up? give Any saying far there for are can think there's pent-up and as your some that probably for good

Tim Phillips

say the hasn't we falloff very units and SAAR is facilities that the aside type contract I servicing from logistics any Yes. any talk those are are there really facilities. What that portfolio overall our high-demand can of in been in

fact, which we you XX up could gained the as a think be throughout good units. in In increase additional rest to overall we this there's programs, program a that on of saw that service the we've whole year, a of to couple chance in ramp

J. Bruce Chan

the side comp, helpful. here, maybe on but And but the the drayage activity. here. decline the pivoting to little heard intermodal on the volume we've given volumes see pressure guess anecdotally just that not seen strength assessorial then just transloading what understand headwind a we've business, to in at Super the the Great. import I yield in result, on industry the your and over surprised, just I about from overall

little So maybe with on from your drayage happening business? side the insight side about the a intermodal just what's demand

Tim Phillips

Yes.

different that flow if around think different the pockets country, look have and I of you regions volume.

coastal mentioned increase that that the the Kind seen we've on on seen of retail pick Coast, but West not like that up. cities, the our of have not customers a We news. the might of I remarks, type in in you lot volumes, read steady especially

the not West in of that the it those service some recently And we on where published, into inland margins cities. those make major were seen double-digit Coast increases environment have we

So full-blown call what to expand good to drive we're on have Because with a salesforce out little leadership let's will the there business, looking we place. QX. I've that go over ultimately, the the to we we fill think speculative footprint. team a we it, how opportunities have, pipeline next, need as in But a our mentioned,

good a able the the ourselves investing We to have where network place assets. be in a We business place. We're those chipper need to wood do going wood standpoint. we're to to from in and some business terminal optimize and property

the So I corner. think around just that's

and these look an and given facilities from back economic As pause, as been it's from hard it's as side been think it's a as that we're out when at position step opportunity looking way, be that I plan and things, we'll take a And the correct sure think better making to volume of have of we us we of the hard to flow, at direct I the take a volumes. make come to assets. increased this, secure optimize that sure advantage it in

J. Bruce Chan

And I'll Perfect. side, over. and one from things then more Okay. turn maybe just my

know I that for California an focus had Southern update for on operation, of Just turnaround. kind a looking the been

some going that process great. give could So how if us you be detail would is on

Jude Beres

couple quarters is that quarter, in lot did, of a the talking Tim's slightly the over operated an to of come better been breakeven performed the overall, optimization basis March. We on fruition. Yes, Jude. have about past efforts throughout Bruce, this business the adjusted Yes, at as

obviously result not quarters year. that the was than middle looking business we're cycle the of operating is trough although the markedly better for, the So of it at the last in

Tim Phillips

are extremely And you've bring to compliant process, mean Southern but Bruce, that, and the California. what we little financial of optimization in other, seen see of time, these, add We by some bit done that filter the that of out may others ABX operating color a over let that's And businesses some on an market. playing believe things the at period same news, that to program in be of from a of not operate me field. the some of truly that back we're the will just to I that trying only not remark confident manner, a you

So a in fashion. again we compliant and positioned once property, assets, things and running new ourselves with clean

the deserve. they see going we're offer we uptick and to So there, the to be them our when do service customers that value able

J. Bruce Chan

the and Okay. color. congratulations, Well, I all great. Again, for all appreciate me. that's That's

Operator

no Instructions] over I are will Ladies turn to this further Tim. there now [Operator time. the back and call questions at gentlemen,

Tim Phillips

Well, the call. us July the be to you. report on into on dialing our to thank continue and We happy in you. call look Appreciate XXXX. with you XX, QX everyone journey having we'll QX, Thank forward again earnings

Operator

and your this Ladies your please participating disconnect that and lines. conference gentlemen, you call for for We ask you thank today. concludes

Universal Logistics (ULH) 26 Apr 242024 Q1 Earnings call transcript