Universal Logistics has reported its financial results for the final quarter of 2019, showing its operating revenue decrease by 2.7%, to $375.9m; reflecting difficulties the company had regarding legal matters, prolonged strikes and an overall soft freight environment. The operating revenues dropped by 2.7%, compared to $386.4m in Q4 2018.
Individual segments have also not been performing well, all showing lower figures compared to 2018, with the exception of intermodal service revenue increasing by $28.4m. Q4 2019 EBITDA is the only major measure that has shown an increase. Q4 2019 EBITDA: $37.7m; compared to $31.4m in 2018, increasing $6.3m, or by 20.2%.
Important to note is that the reported operating income and EBITDA for Q4 2019 include a litigation settlement charge of $2.9m; as a result of the impact of the litigation charge, both operating income margin and EBITDA margin for Q4 2019 were reduced by 0.8%.
Both operating income and net income for Q4 2019 were down from its performances in 2018.
Operating income: $15.5m; compared to $17.9m in 2018, decreasing 13.4%.
Net income: $8.7m; compared to $9m in 2019, decreasing 3.1%.
Q4 2019 transportation segment (truckload, brokerage and intermodal services operations) operating income: $11.6m, on total operating revenues of $260.9m. A weak truckload freight environment led to the general decline in operating income in the transportation segment.
Q4 2019 operating revenues from truckload services: $58.4m; compared to $73.8, in 2018, decreasing $15.3m. The decrease in truckload services reflects an 18.0% decrease in the number of loads hauled and a 2.3% decrease in average operating revenue per load. During Q4 2019 Universal moved 54,804 loads, compared to 66,821 in 2018.
Q4 2019 brokerage services revenue: $85.3m; compared to $98.1m in 2018, decreasing $12.9m. The decline includes a $6.1m decrease Y-o-Y in brokerage revenues from its freight forwarding division. The remaining decrease is primarily due to a 12.2% decrease in the average operating revenue per load, partially offset by a 4.4% increase in the number of brokered loads moved.
Q4 2019 intermodal services revenue: $112.3m; compared to $83.9m in 2018, increasing $28.4m.
Included in intermodal revenues were $33.7m of incremental revenue from acquired companies. Intermodal services experienced increases in both the average operating revenue per load and in the number of loads hauled. During Q4 2019, Universal moved 186,646 intermodal loads, compared to 143,845 loads in 2018.
Q4 2019 logistics segment (including value-added and dedicated services): income was $6.7m on total operating revenues of $114.8m. The results of the logistics segment were negatively impacted by the UAW labour strike that lasted into Q4 2019.
Q4 2019 value-added services revenues: $86.9m; compared to $93.2m in 2018, decreasing $6.2m.
The decline is attributable to the loss of production at value-added operations supporting passenger vehicles during the United Auto Workers labour strike, as well as a $2.3m decline in value-added operations supporting heavy-truck production.
Q4 2019 operating revenues from dedicated services: $33m; compared to $37.4m in 2018, decreasing 11.7%. This is attributable to the impact the labour strike had on shuttle operations supporting General Motors during Q4 2019.
Universal expects to report 2020 total operating revenues in the range of $1.6bn to $1.bn, and operating margins in the 7% to 9% range. Capital expenditures are expected to be in the range of $70m to $80m, and total interest expense for the year is expected to be between $16m to $18m.
Source: Universal
