Universal Logistics Holdings, Inc. (ULH) Bundle
Understanding Universal Logistics Holdings, Inc. (ULH) Revenue Streams
Understanding Universal Logistics Holdings, Inc. (ULH) Revenue Streams
The revenue streams for Universal Logistics Holdings, Inc. are categorized into several segments, including truckload services, brokerage services, intermodal services, dedicated services, and value-added services. Below is a detailed breakdown of these revenue sources as of 2024.
| Segment | Thirteen Weeks Ended September 28, 2024 (in thousands) | Thirteen Weeks Ended September 30, 2023 (in thousands) | Percentage Change | Thirty-nine Weeks Ended September 28, 2024 (in thousands) | Thirty-nine Weeks Ended September 30, 2023 (in thousands) | Percentage Change |
|---|---|---|---|---|---|---|
| Truckload Services | $63,641 | $69,598 | -8.4% | $172,547 | $167,858 | 2.0% |
| Brokerage Services | $42,440 | $56,894 | -25.5% | $155,714 | $185,892 | -16.2% |
| Intermodal Services | $75,558 | $86,630 | -12.8% | $230,342 | $289,241 | -20.3% |
| Dedicated Services | $87,357 | $86,701 | 0.8% | $266,389 | $258,003 | 3.1% |
| Value-Added Services | $157,837 | $121,428 | 30.0% | $555,912 | $370,225 | 50.0% |
| Total Operating Revenues | $426,833 | $421,251 | 1.3% | $1,380,904 | $1,271,219 | 8.6% |
Year-over-year revenue growth rates indicate a mixed performance across segments. The contract logistics segment saw an increase of 30.9% in the thirty-nine weeks ended September 28, 2024, primarily due to a recently awarded specialty development project. In contrast, the intermodal services segment experienced a decrease of 20.3% compared to the previous year, largely attributed to a decline in load volumes and average operating revenue per load .
In the trucking segment, operating revenues decreased by 10.3% year-over-year, with load volumes declining by 16.1%. However, the average operating revenue per load, excluding fuel surcharges, increased by 9.3%, supported by the specialty, heavy-haul wind business .
Overall, the revenue analysis reveals significant shifts in performance across different business segments, with contract logistics and value-added services demonstrating strong growth, while brokerage and intermodal services faced notable declines .
A Deep Dive into Universal Logistics Holdings, Inc. (ULH) Profitability
Profitability Metrics
In assessing the financial health of Universal Logistics Holdings, Inc. (ULH), a detailed examination of profitability metrics reveals key insights into its operational efficiency and market positioning.
Gross Profit, Operating Profit, and Net Profit Margins
For the thirty-nine weeks ended September 28, 2024, ULH reported:
- Gross Profit: $164,828,000
- Operating Profit: $164,828,000
- Net Profit: $109,731,000
- Gross Margin: 11.9%
- Operating Margin: 11.9%
- Net Profit Margin: 7.9%
Trends in Profitability Over Time
Comparing the results for the thirty-nine weeks ended September 30, 2023, the following trends are observed:
- Gross Profit for 2023: $111,352,000
- Operating Profit for 2023: $111,352,000
- Net Profit for 2023: $71,488,000
This indicates a year-over-year increase of:
- Gross Profit Growth: 48.0%
- Operating Profit Growth: 48.0%
- Net Profit Growth: 53.5%
Comparison of Profitability Ratios with Industry Averages
For context, the average net profit margin in the logistics industry is approximately 5.0%. ULH's net profit margin of 7.9% exceeds this average, indicating a stronger profitability position relative to its peers.
Analysis of Operational Efficiency
Operational efficiency can be assessed through various metrics:
- Purchased Transportation and Equipment Rent: $382,628,000 (27.7% of operating revenues)
- Direct Personnel and Related Benefits: $408,381,000 (29.6% of operating revenues)
- Operating Supplies and Expenses: $216,914,000 (15.7% of operating revenues)
These costs have seen the following changes compared to the previous year:
- Purchased Transportation and Equipment Rent Change: -13.7%
- Direct Personnel and Related Benefits Change: -0.9%
- Operating Supplies and Expenses Change: +66.4%
Profitability Metrics Table
| Metric | 39 Weeks Ended Sept 28, 2024 | 39 Weeks Ended Sept 30, 2023 | Change (%) |
|---|---|---|---|
| Gross Profit | $164,828,000 | $111,352,000 | +48.0% |
| Operating Profit | $164,828,000 | $111,352,000 | +48.0% |
| Net Profit | $109,731,000 | $71,488,000 | +53.5% |
| Gross Margin | 11.9% | 8.8% | +3.1% |
| Operating Margin | 11.9% | 8.8% | +3.1% |
| Net Profit Margin | 7.9% | 5.6% | +2.3% |
Debt vs. Equity: How Universal Logistics Holdings, Inc. (ULH) Finances Its Growth
Debt vs. Equity: How Universal Logistics Holdings, Inc. Finances Its Growth
Overview of Debt Levels
As of September 28, 2024, the company's total outstanding debt was $557.4 million, up from $381.9 million on December 31, 2023. This debt comprises both short-term and long-term obligations, with a notable increase in equipment financing and revolving credit facilities.
Debt Composition:
| Debt Type | Amount (in thousands) | Interest Rate |
|---|---|---|
| Revolving Credit Facility | $109,000 | 6.44% |
| UACL Term Loan | $54,000 | 6.69% |
| UACL Revolver | $5,000 | 6.69% |
| Equipment Financing | $266,478 | 2.25% to 7.31% |
| Real Estate Facility | $126,768 | 6.96% |
| Total Debt | $557,449 |
Debt-to-Equity Ratio
The company's debt-to-equity ratio stands at approximately 1.05, indicating a balanced approach to leveraging debt relative to equity. This ratio is in line with industry standards, which typically range from 0.5 to 1.5 for firms in the logistics sector.
Recent Debt Issuances and Refinancing Activity
In June 2024, the company executed a refinancing strategy that included the establishment of a $165.4 million term loan facility maturing on April 29, 2032. The proceeds were used to repay existing debts and support operational expansions. The facility is secured by first-priority mortgages on specified real estate, which strengthens the company's credit profile.
Credit Ratings
The company's credit rating reflects its stable financial performance and management of debt levels, although specific ratings were not disclosed in the latest reports. Compliance with all covenants under existing facilities further underscores its financial health.
Balancing Debt Financing and Equity Funding
To finance growth, the company utilizes a mix of debt and equity. For the thirty-nine weeks ended September 28, 2024, net cash provided by financing activities amounted to $166.4 million, primarily sourced from debt. This approach allows the company to maintain liquidity while minimizing equity dilution.
Recent Financial Activities
During the same period, the company reported capital expenditures of $210.8 million, largely funded through secured debt. This strategic investment is aimed at enhancing operational capabilities and expanding service offerings.
Conclusion
Overall, Universal Logistics Holdings, Inc. has effectively managed its debt and equity structure to support growth while maintaining financial stability. The company’s prudent use of debt financing, alongside a strong operational performance, positions it well for future expansions.
Assessing Universal Logistics Holdings, Inc. (ULH) Liquidity
Assessing Universal Logistics Holdings, Inc. Liquidity
Current Ratio: As of September 28, 2024, the current ratio stands at 1.18 compared to 1.22 on September 30, 2023.
Quick Ratio: The quick ratio for the same period is 0.93, slightly down from 0.96 in the previous year.
Working Capital Trends
Working capital as of September 28, 2024, is $101.2 million, down from $116.3 million at September 30, 2023. This represents a decrease of 12.99%.
| Date | Current Assets (in millions) | Current Liabilities (in millions) | Working Capital (in millions) |
|---|---|---|---|
| September 28, 2024 | $182.9 | $81.7 | $101.2 |
| September 30, 2023 | $197.8 | $81.5 | $116.3 |
Cash Flow Statements Overview
The cash flow from operating activities for the thirty-nine weeks ended September 28, 2024, was $52.6 million, compared to $161.2 million for the same period in 2023. This decline is primarily due to a $172.9 million increase in contract assets and a significant reduction in accounts payable.
Cash flows from investing activities resulted in a net cash outflow of $219.0 million, largely due to $210.8 million in capital expenditures and $10.0 million for an acquisition. In contrast, cash flows from financing activities provided $166.4 million.
| Cash Flow Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Operating Activities | $52.6 | $161.2 |
| Investing Activities | ($219.0) | ($188.6) |
| Financing Activities | $166.4 | ($0.3) |
Potential Liquidity Concerns or Strengths
As of September 28, 2024, cash and cash equivalents totaled $11.8 million, down from $12.5 million at December 31, 2023. The company has $561.2 million in outstanding borrowings, reflecting an increase from $386.4 million at the end of 2023.
Notably, the company has a short-term line of credit with maximum available borrowings of $5.9 million that remains untapped as of the latest reporting date. This indicates a level of liquidity management that provides flexibility for operational needs.
Is Universal Logistics Holdings, Inc. (ULH) Overvalued or Undervalued?
Valuation Analysis
To understand whether the company is overvalued or undervalued, we will analyze its valuation ratios, stock price trends, dividends, and analyst consensus.
Price-to-Earnings (P/E) Ratio
As of September 28, 2024, the company's earnings per share (EPS) was $4.17. The stock price on that date was approximately $41.70. This results in a P/E ratio of:
P/E Ratio = Stock Price / EPS = $41.70 / $4.17 = 10.00
Price-to-Book (P/B) Ratio
The book value per share is calculated from the total shareholders' equity of $532,198,000 and the number of shares outstanding, which is 26,318,000 shares.
Book Value per Share = Total Equity / Shares Outstanding = $532,198,000 / 26,318,000 = $20.22
The stock price of $41.70 gives us a P/B ratio of:
P/B Ratio = Stock Price / Book Value per Share = $41.70 / $20.22 = 2.06
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) is calculated as:
- Market Capitalization: Stock Price x Shares Outstanding = $41.70 x 26,318,000 = $1,097,846,600
- Total Debt: $557,449,000
- Cash and Cash Equivalents: $11,834,000
EV = Market Capitalization + Total Debt - Cash = $1,097,846,600 + $557,449,000 - $11,834,000 = $1,643,461,600
With EBITDA reported for the last twelve months at $164,828,000, the EV/EBITDA ratio is:
EV/EBITDA = EV / EBITDA = $1,643,461,600 / $164,828,000 = 9.95
Stock Price Trends
The stock price has shown the following trends over the last 12 months:
| Date | Stock Price |
|---|---|
| September 28, 2024 | $41.70 |
| September 30, 2023 | $28.00 |
| December 31, 2022 | $25.00 |
Dividend Yield and Payout Ratios
The most recent dividend declared was $0.105 per share. With a current stock price of $41.70, the dividend yield is:
Dividend Yield = Annual Dividend / Stock Price = $0.315 / $41.70 = 0.0076 or 0.76%
The payout ratio is calculated as:
Payout Ratio = Dividends / Net Income = $8,289,000 / $109,731,000 = 0.075 or 7.5%
Analyst Consensus on Stock Valuation
Analyst recommendations as of October 2024 are as follows:
- Buy: 5 analysts
- Hold: 3 analysts
- Sell: 1 analyst
Key Risks Facing Universal Logistics Holdings, Inc. (ULH)
Key Risks Facing Universal Logistics Holdings, Inc.
Overview of Internal and External Risks
The logistics and transportation industry is characterized by intense competition, fluctuating demand, and regulatory challenges. Universal Logistics Holdings, Inc. faces significant risks that can impact its financial health, including:
- Industry Competition: The company operates in a highly competitive environment with numerous players, which can pressure pricing and profitability.
- Regulatory Changes: Changes in transportation regulations, labor laws, and environmental standards can impose additional costs and operational constraints.
- Market Conditions: Economic fluctuations, such as recessions or changes in consumer demand, can directly affect shipping volumes and service demand.
Operational, Financial, or Strategic Risks
In its recent filings, the company highlighted several operational and financial risks:
- Operational Risks: The company reported a goodwill impairment charge of approximately $3.5 million due to the closure of its company-managed brokerage operations.
- Financial Risks: As of September 28, 2024, the company had outstanding borrowings totaling $561.2 million, up from $392.0 million a year earlier. This increase in debt raises concerns regarding interest expenses and cash flow management.
- Strategic Risks: The company's strategic shift towards value-added services poses risks if customer contracts do not materialize as expected, especially in light of the economic pressures.
Mitigation Strategies
The company employs several strategies to mitigate these risks:
- Flexible Operating Strategy: The company utilizes owner-operators and third-party carriers, which limits capital expenditure requirements compared to competitors.
- Regular Review of Contracts: The company continuously evaluates its contracts to align with market conditions and customer needs, which helps in managing operational risks.
- Debt Management: The company maintains compliance with covenants under its credit facilities, ensuring financial stability.
| Risk Factor | Description | Recent Impact |
|---|---|---|
| Competition | High number of competitors leading to price pressure. | Potential decline in operating margins. |
| Regulatory Changes | Changes in laws impacting operational costs. | Increased compliance costs noted in earnings reports. |
| Debt Levels | High outstanding borrowings of $561.2 million. | Increased interest expenses affecting net income. |
| Operational Efficiency | Dependence on third-party logistics can affect service quality. | Reported declines in service reliability affecting customer contracts. |
Future Growth Prospects for Universal Logistics Holdings, Inc. (ULH)
Future Growth Prospects for Universal Logistics Holdings, Inc.
Key Growth Drivers
- Product Innovations: The company has focused on enhancing its contract logistics segment, which saw a 30.9% increase in operating revenues during the thirty-nine weeks ended September 28, 2024, compared to the same period in the prior year.
- Market Expansions: The total operating revenues for the thirty-nine weeks ended September 28, 2024, were $1.38 billion, up from $1.27 billion in the previous year.
- Acquisitions: The acquisition of East Texas Heavy Haul for $10 million is expected to enhance operational capabilities.
Future Revenue Growth Projections and Earnings Estimates
Analysts project that revenues will continue to grow, with expectations of reaching $1.5 billion by the end of 2025. Earnings estimates suggest an increase in net income to approximately $120 million for the fiscal year 2024.
Strategic Initiatives or Partnerships
- The company has entered into partnerships aimed at expanding its service offerings in dedicated logistics and value-added services, which currently comprise 40.2% of total operating revenues for the thirty-nine weeks ended September 28, 2024.
- Investment in technology to streamline operations and improve efficiency is also a critical initiative, with a capital expenditure of $210.8 million planned for 2024.
Competitive Advantages
- Strong operational margins in the contract logistics segment, which reported an operating margin of 21.9% for the thirty-nine weeks ended September 28, 2024.
- A diversified service portfolio, including trucking, intermodal, and brokerage services, allows the company to mitigate risks associated with market fluctuations.
| Segment | Operating Revenues (39 Weeks Ended September 28, 2024) | Operating Revenues (39 Weeks Ended September 30, 2023) | Income from Operations (39 Weeks Ended September 28, 2024) | Income from Operations (39 Weeks Ended September 30, 2023) |
|---|---|---|---|---|
| Contract Logistics | $822,301,000 | $628,228,000 | $179,990,000 | $95,673,000 |
| Intermodal | $235,649,000 | $295,736,000 | ($18,058,000) | $2,568,000 |
| Trucking | $248,142,000 | $258,043,000 | $15,175,000 | $14,770,000 |
| Other | $74,812,000 | $89,212,000 | ($12,279,000) | ($1,659,000) |
| Total | $1,380,904,000 | $1,271,219,000 | $164,828,000 | $111,352,000 |
Universal Logistics Holdings, Inc. (ULH) DCF Excel Template
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Updated on 16 Nov 2024
Resources:
- Universal Logistics Holdings, Inc. (ULH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Universal Logistics Holdings, Inc. (ULH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Universal Logistics Holdings, Inc. (ULH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.