UNIVERSAL LOGISTICS HOLDINGS, INC. 10-Q/A

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Some of the statements and assumptions in this Amendment No. 1 to the Quarterly Report on Form 10-Q/A 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, 2024 and Part II, Item 1A of this Form 10-Q/A, 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. Restatement of Previously Issued Financial Statements As discussed in Note 2, the condensed consolidated financial statements included in this Amendment No. 1 to the Quarterly Report on Form 10-Q (Form 10-Q/A) have been restated. The accompanying Management’s Discussion and Analysis gives effect to the restatement. This Amendment amends and restates the Company’s previously filed Quarterly Report on Form 10-Q for the quarter ended September 27, 2025. Except as described herein, this Amendment does not amend or update any other information contained in the original filing. The restatement relates to an error identified in the determination of the carrying value of the intermodal reporting unit used in the Company’s goodwill impairment analysis during the quarter ended September 27, 2025, including the inclusion of certain intercompany deferred tax liabilities that should not have been included in the reporting unit’s carrying value for purposes of the impairment test. The restatement affects only the condensed consolidated financial statements for the quarter ended September 27, 2025 and does not impact previously issued financial statements for any earlier periods. Management concluded that the error is consistent with the material weakness in internal control over financial reporting previously disclosed by the Company. In addition, because the impairment analysis involves estimates and judgments, the determination of fair value is inherently subject to uncertainty and could differ based on changes in assumptions or circumstances; however, the restatement described above relates to the correction of the carrying value used in the impairment analysis during the quarter ended September 27, 2025. The goodwill impairment described above is a non-cash charge and does not affect the Company’s liquidity, operating cash flows, or compliance with debt covenants. The following discussion reflects the Company’s restated financial statements, and additional discussion of the impairment is included below under “Results of Operations.” Overview Universal Logistics Holdings, Inc. is a holding company incorporated in Nevada on May 1, 2025 and previously incorporated in Michigan on December 11, 2001. Our 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 with 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 company-managed facilities, and through a contract network of agents who solicit freight business directly from shippers. 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. 26 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 in our intermodal and trucking segments are associated with individual freight shipments coordinated by our agents and company-managed terminals. In contrast, our contract logistics segment delivers value-added services and/or transportation services to specific customers on a dedicated basis, generally pursuant to contract terms of one year or longer. Our segments are further distinguished by the amount of forward visibility we have into 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, 2024 and the unaudited Consolidated Financial Statements and related notes contained in this Quarterly Report on Form 10-Q/A. 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. New or increased tariffs on imported goods could also impose additional costs on our business or cause disruption in global supply chains. Such disruptions could lead to a decrease in shipping volumes, which would have an adverse impact on our revenues and results of operations. While operating cash flows may be negatively impacted by inflation-driven cost increases or reductions in shipping volumes, 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 and thirty-nine weeks ended September 27, 2025 and September 28, 2024, presented as a percentage of total operating revenues: Thirteen Weeks Ended Thirty-nine Weeks Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Operating revenues: Truckload services 12.7 % 14.9 % 11.4 % 12.5 % Brokerage services 4.5 9.9 4.9 11.3 Intermodal services 16.1 17.7 17.1 16.7 Dedicated services 21.7 20.5 21.6 19.3 Value-added services 45.0 37.0 45.0 40.2 Total operating revenues 100.0 % 100.0 % 100.0 % 100.0 % 27 Results of Operations Thirteen Weeks Ended September 27, 2025 Compared to Thirteen Weeks Ended September 28, 2024 The following table sets forth items derived from our consolidated statements of income for the thirteen weeks ended September 27, 2025 and September 28, 2024: Thirteen Weeks Ended (As Restated, See Note 2) September 27, 2025 September 28, 2024 Percent Change in Dollar Amount (Dollars in millions) $ % $ % % Operating revenues $ 396,786 100.0 % $ 426,833 100.0 % (7.0 )% Operating expenses: Purchased transportation and equipment rent 80,063 20.2 120,700 28.3 (33.7 ) Direct personnel and related benefits 176,572 44.5 132,081 30.9 33.7 Operating supplies and expenses 57,523 14.5 60,532 14.2 (5.0 ) Commission expense 4,271 1.1 6,985 1.6 (38.9 ) Occupancy expense 13,738 3.5 11,179 2.6 22.9 General and administrative 13,625 3.4 13,037 3.1 4.5 Insurance and claims 8,494 2.1 5,681 1.3 49.5 Depreciation and amortization 35,499 8.9 30,284 7.1 17.2 Impairment expense 124,411 31.4 3,720 1 n/m Total operating expenses 514,196 129.6 384,199 90.0 33.8 Income (loss) from operations (117,410 ) (29.6 ) 42,634 10.0 (375.4 ) Interest income (expense), net (9,985 ) (2.5 ) (7,416 ) (1.7 ) 34.6 Other non-operating income 833 0.2 4 0.0 n/m Income (loss) before income taxes (126,562 ) (31.9 ) 35,222 8.3 (459.3 ) Income tax expense (benefit) (8,624 ) (2.2 ) 8,682 1.9 (199.3 ) Net income (loss) $ (117,938 ) (29.7 )% $ 26,540 6.2 % (544.4 )% Operating revenues . The overall decrease in revenue was primarily attributable to decreases in our transportation-related services. For comparison purposes, the third quarter of 2025 included $50.2 million of revenue attributable to our recent acquisition of Parsec, while the third quarter of 2024 included $36.8 million of revenue attributable to our specialty development program, which was completed in 2024, and $16.1 million of revenue attributable to our now closed company-managed brokerage operation. Operating revenues included separately-identified fuel surcharges of $20.4 million in the third quarter 2025, compared to $21.9 million in the third quarter 2024. Also included in operating revenues were other accessorial charges such as detention, demurrage and storage, which totaled $9.0 million during the third quarter 2025 compared to $8.9 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 third quarter 2025, transactional transportation-related service revenues decreased 27.1% 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 some of our intermodal operations. The increase in the third quarter 2025 was due to an increase in headcount in our contract logistics business due to the acquisition of Parsec. 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 decrease was higher expenses incurred in the third quarter 2024 in connection with the contract logistics specialty development project, which was completed in 2024. Commission expense . Commission expense decreased due to decreased revenue in our agency-based truckload business. 28 Occupancy expense . The increase in occupancy expense was attributable to a general increase in building rents as well as additional property locations. General and administrative . The increase in general and administrative expenses was due to an increase in information technology expenses during the third quarter of 2025. Insurance and claims . The increase in insurance and claims expense was primarily due to an increase in cargo claims and general liability insurance. Depreciation and amortization . Depreciation expense increased $7.2 million in the third quarter of 2025 due to incremental fixed asset additions, including Parsec. This was partially offset by a decrease of $2.0 million in amortization. Impairment Expense . The third quarter 2025 included $124.4 million of impairment charges related to the intermodal reporting segment. These charges consisted of $101.1 million of goodwill impairment and $23.3 million of impairment related to certain customer-relationship intangible assets. The goodwill impairment charge is a non-cash item and does not impact the Company’s cash position, liquidity, operating cash flows, or compliance with debt covenants. As a result of this impairment charge, the Company has fully impaired the goodwill associated with its intermodal reporting unit and no goodwill remains attributable to that reporting unit as of September 27, 2025. The restatement described above relates to the correction of the carrying value used in the impairment analysis during the quarter ended September 27, 2025 and does not reflect a change in the Company’s valuation methodology. Management believes that, based on information currently available, the assumptions used in the impairment analysis during the quarter ended September 27, 2025 were reasonable; however, the valuation of reporting units involves significant judgments and estimates. The third quarter 2025 impairment charges of $124.4 million compare to charges of $3.7 million recorded during the third quarter of 2024 relating to our now closed company-managed brokerage operation. Interest expense, net . The increase in net interest expense reflects an increase in our outstanding borrowings. As of September 27, 2025, our outstanding borrowings were $827.0 million compared to $561.2 million at September 28, 2024. Other non-operating income . Other non-operating income for the third quarter 2025 includes gains of $0.6 million on marketable securities, compared to gains of $0.1 million in the same period of 2024. Income tax expense (benefit) . Our effective income tax rate was 6.8% in thirteen weeks ended September 27, 2025, compared to 24.6% in the thirteen weeks ended September 28, 2024. The decrease in income taxes is primarily the result of a decrease in taxable income. The decrease in our effective tax rate was due to a change in the mix of operating profits and losses between foreign and domestic tax jurisdictions and the impairment of goodwill. 29 Thirty-nine Weeks Ended September 27, 2025 Compared to Thirty-nine Weeks Ended September 28, 2024 The following table sets forth items derived from our consolidated statements of income for the thirty-nine weeks ended September 27, 2025 and September 28, 2024: Thirty-nine Weeks Ended (As Restated, See Note 2) September 27, 2025 September 28, 2024 Percent Change in Dollar Amount (Dollars in millions) $ % $ % % Operating revenues $ 1,172,970 100.0 % $ 1,380,904 100.0 % (15.1 )% Operating expenses: Purchased transportation and equipment rent 241,314 20.6 382,628 27.7 (36.9 ) Direct personnel and related benefits 509,105 43.4 408,381 29.6 24.7 Operating supplies and expenses 159,186 13.6 216,914 15.7 (26.6 ) Commission expense 12,922 1.1 22,485 1.6 (42.5 ) Occupancy expense 36,794 3.1 32,189 2.3 14.3 General and administrative 40,828 3.5 41,242 3.0 (1.0 ) Insurance and claims 23,057 2.0 20,722 1.5 11.3 Depreciation and amortization 107,190 9.1 87,795 6.4 22.1 Impairment expense 124,411 10.6 3,720 0.3 n/m Total operating expenses 1,254,807 107.0 1,216,076 88.1 3.2 Income (loss) from operations (81,837 ) (7.0 ) 164,828 11.9 (149.6 ) Interest income (expense), net (27,061 ) (2.3 ) (20,378 ) (1.5 ) 32.8 Other non-operating income 1,560 0.1 2,007 0.2 (22.3 ) Income (loss) before income taxes (107,338 ) (9.2 ) 146,457 10.6 (173.3 ) Income tax expense (benefit) (3,730 ) (0.4 ) 36,726 2.7 (110.2 ) Net income (loss) $ (103,608 ) (8.8 )% $ 109,731 7.9 % (194.4 )% Operating revenues . The overall decrease in operating revenues was attributable to decreases in both our transportation and our logistics operations. For comparison purposes, the first thirty-nine weeks of 2025 included $161.7 million of revenue attributable to our recent acquisition of Parsec, while the first thirty-nine weeks of 2024 included $176.6 million of revenue attributable to our specialty development program, which was completed in 2024, and $72.6 million of revenue attributable to our now closed company-managed brokerage operation. Operating revenues included separately-identified fuel surcharges of $61.5 million in the first thirty-nine weeks of 2025, compared to $71.1 million in the first thirty-nine weeks of 2024. Also included in operating revenues were other accessorial charges such as detention, demurrage and storage, which totaled $26.3 million during the first thirty-nine weeks of 2025 compared to $25.5 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 thirty-nine weeks of 2025, transactional transportation-related service revenues decreased 29.8% 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 thirty-nine weeks of 2025 was due to an increase in headcount in our contract logistics business due to the acquisition of Parsec. 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 decrease was higher expenses incurred in the first thirty-nine weeks of 2024 in connection with the contract logistics specialty development project, which was completed in 2024. Commission expense . Commission expense decreased due to decreased revenue in our agency-based truckload business. Occupancy expense . The increase in occupancy expense was due to a general increase in building rents as well as additional property locations. 30 General and administrative . There was a decrease in general and administrative expense due to a decrease in salaries and wages and professional fees. Insurance and claims . The increase in insurance and claims expense was primarily due to an increase in cargo claims and general liability insurance. Depreciation and amortization . The increase in depreciation and amortization expense resulted from a $19.8 million increase in depreciation expense, partially offset by a $0.4 million decrease in amortization expense. The increase in depreciation expense is the result of incremental fixed asset additions during the thirty-nine weeks ended September 27, 2025, as well increases due to the revisions on the estimated useful life and salvage value of certain equipment in the second quarter of 2024 and the acquisition of Parsec in the fourth quarter of 2024. Amortization expense decreased $0.4 million. Impairment Expense . The first thirty-nine weeks of 2025 included $124.4 million of impairment charges related to the intermodal reporting segment. These charges consisted of $101.1 million of goodwill impairment and $23.3 million of impairment related to certain customer-relationship intangible assets. The goodwill impairment charge is a non-cash item and does not impact the Company’s cash position, liquidity, operating cash flows, or compliance with debt covenants. As a result of this impairment charge, the Company has fully impaired the goodwill associated with its intermodal reporting unit and no goodwill remains attributable to that reporting unit as of September 27, 2025. The restatement described above relates to the correction of the carrying value used in the impairment analysis during the quarter ended September 27, 2025 and does not reflect a change in the Company’s valuation methodology. Management believes that, based on information currently available, the assumptions used in the impairment analysis during the quarter ended September 27, 2025 were reasonable; however, the valuation of reporting units involves significant judgments and estimates. The impairment charges of $124.4 million recorded during the first thirty-nine weeks of 2025 compare to charges of $3.7 million recorded during the first thirty-nine weeks of 2024 relating to our now closed company-managed brokerage operation. Interest expense, net . The increase in net interest expense reflects an increase in our outstanding borrowings. As of September 27, 2025, our outstanding borrowings were $827.0 million compared to $561.2 million at September 28, 2024. Other non-operating income . Other non-operating income decreased by $0.4 million in the thirty-nine weeks ended September 27, 2025. There were $0.7 million in unrealized gains in the first thirty-nine weeks of 2025, compared to $0.9 million in the same period 2024. Income tax expense (benefit) . Our effective income tax rate was 3.5% in thirty-nine weeks ended September 27, 2025, compared to 25.1% in the thirty-nine weeks ended September 28, 2024. The decrease in income taxes is primarily the result of a decrease in taxable income. The decrease in our effective tax rate was due to a change in the mix of operating profits and losses between foreign and domestic tax jurisdictions and the impairment of goodwill. Segment Financial Results We report our financial results in three distinct reportable segments: contract logistics, intermodal and trucking, 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 week and thirty-nine week periods ended September 27, 2025 and September 30, 2023 (in thousands): Operating Revenues Thirteen Weeks Ended Thirty-nine Weeks Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Contract logistics $ 264,390 $ 245,194 $ 780,839 $ 822,301 Intermodal 64,679 77,632 204,290 235,649 Trucking 67,716 87,047 187,368 248,142 Other 1 16,960 473 74,812 Total operating revenues $ 396,786 $ 426,833 $ 1,172,970 $ 1,380,904 31 Income (loss) from Operations (As Restated, See Note 2) Thirteen Weeks Ended Thirty-nine Weeks Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Contract logistics $ 13,720 $ 45,623 $ 59,349 $ 179,990 Intermodal (135,116 ) (1,127 ) (151,501 ) (18,058 ) Trucking 3,914 7,122 9,443 15,175 Other 72 (8,984 ) 872 (12,279 ) Total income (loss) from operations $ (117,410 ) $ 42,634 $ (81,837 ) $ 164,828 Thirteen Weeks Ended September 27, 2025 Compared to Thirteen Weeks Ended September 28, 2024 In the contract logistics segment, which includes our value-added and dedicated services, operating revenues increased 7.8%.Operating revenues in the third quarter 2025 included $50.2 million from the recent acquisition of Parsec, while revenues in the same period last year included $36.8 million attributable to our specialty development project in Stanton, TN, which was completed last year. At the end of the third quarter 2025, we managed 82 value-added programs, compared to 70 in the third quarter 2024. Included in contract logistics segment revenues for the thirteen weeks ended September 27, 2025, were $8.1 million in separately identified fuel surcharges from dedicated transportation services, compared to $7.0 million in the same period last year. Income from operations decreased $31.9 million and operating margin, as a percentage of revenue was 5.2% for the third quarter 2025, compared to 18.6% in the third quarter 2024. Operating revenues in the intermodal segment decreased 16.7% primarily due to a decrease in the average operating revenue per load, excluding fuel surcharges. Included in intermodal segment revenues for the third quarter 2025 were $7.6 million in separately identified fuel surcharges, compared to $10.0 million in the same period last year. Intermodal segment revenues also include other accessorial charges such as detention, demurrage and storage, which totaled $9.0 million during the third quarter 2025 compared to $8.9 million in the third quarter 2024. Load volumes declined 1.9%, and the average operating revenue per load, excluding fuel surcharges, decreased 14.2% on a year-over-year basis. In the third quarter 2025, the intermodal segment experienced an operating loss of $(135.1) million, including the $124.4 million previously discussed impairment charges, compared to an operating loss of $(1.1) million during the same period last year. In the trucking segment, operating revenues decreased 22.2% primarily due to a decrease in the number of loads hauled and the average operating revenue per load. Third quarter 2025 trucking segment revenues included $17.3 million of brokerage services compared to $24.3 million during the same period last year. Also included in our trucking segment revenues were $3.6 million in separately identified fuel surcharges during the third quarter 2025 compared to $4.8 million in fuel surcharges in the third quarter 2024. On a year-over-year basis, load volumes declined 19.4% and, the average operating revenue per load, excluding fuel surcharges, decreased 2.3%. As a percentage of revenue, operating margin in the trucking segment for the thirteen weeks ended September 27, 2025, was 5.8% compared to 8.2% for the thirteen weeks ended September 28, 2024. Thirty-nine Weeks Ended September 27, 2025 Compared to Thirty-nine Weeks Ended September 28, 2024 In the contract logistics segment, which includes our value-added and dedicated services, operating revenues decreased 5.0%. Operating revenues in the first thirty-nine weeks of 2025 included $161.7 million from the recent acquisition of Parsec, while revenues in the same period last year included $176.6 million attributable to our specialty development project in Stanton, TN, which was completed last year. At the end of the first thirty-nine weeks of 2025, we managed 82 value-added programs, compared to 70 in the first thirty-nine weeks of 2024. Included in contract logistics segment revenues for the thirty-nine weeks ended September 27, 2025, were $24.1 million in separately identified fuel surcharges from dedicated transportation services, compared to $23.7 million in the same period last year. Income from operations decreased $120.6 million and operating margin, as a percentage of revenue was 7.6% for the first thirty-nine weeks of 2025, compared to 21.9% in the first thirty-nine weeks of 2024. Operating revenues in the intermodal segment decreased 13.3% primarily due to a decrease in the average operating revenue per load and the number of loads hauled. Included in intermodal segment revenues for the thirty-nine weeks ended September 27, 2025 were $23.9 million in separately identified fuel surcharges, compared to $31.5 million in the same period last year. Intermodal segment revenues also include other accessorial charges such as detention, demurrage and storage, which totaled $26.3 million during the first thirty-nine weeks of 2025 compared to $25.5 million in the first thirty-nine weeks of 2024. Load volumes declined 6.1%, while the average operating revenue per load, excluding fuel surcharges, fell 7.2% on a year-over-year basis. In the first thirty-nine weeks of 2025, the intermodal segment experienced an operating loss of $(151.5) million, including the $124.4 million previously discussed impairment charges, compared to an operating loss of $(18.1) million during the same period last year. 32 In the trucking segment, operating revenues decreased 24.5% primarily due to a decrease in the number of loads hauled. Trucking segment revenues included $53.7 million of brokerage services compared to $78.4 million during the same period last year. Also included in our trucking segment revenues were $10.5 million in separately identified fuel surcharges during the thirty-nine weeks ended September 27, 2025 compared to $15.9 million in fuel surcharges in the thirty-nine weeks ended September 28, 2024. On a year-over-year basis, load volumes declined 24.7%; however, the average operating revenue per load, excluding fuel surcharges, increased 2.8%, supported by our specialty, heavy-haul wind business. As a percentage of revenue, operating margin in the trucking segment for the thirty-nine weeks ended September 27, 2025, was 5.0% compared to 6.1% for the thirty-nine weeks ended September 28, 2024. Liquidity and Capital Resources Our primary uses of cash are working capital requirements, capital expenditures, dividend payments, share repurchases, and debt service requirements. Additionally, we may use cash for acquisitions and other investment and financing activities. Working capital is required principally to ensure we are able to run the business and have sufficient funds to satisfy maturing short-term debt and operational expenses. Our capital expenditures consist primarily of transportation equipment, investments in support of our value-added service operations and the expansion of our terminal network. Historically, our primary source of liquidity has been cash flow from operations. In addition, we have a $400 million revolving credit facility maturing in September 30, 2027, and we may increase the available capacity by $200 million upon our request. At September 27, 2025, $20.4 million was available for borrowing. Our UACL subsidiaries have credit facility maturing in September 30, 2027, which includes a $10 million revolver. At September 27, 2025, $5.5 million was available for borrowing. We also finance the purchase of transportation and certain operating equipment with promissory notes. The notes are secured by liens on the specific equipment and are generally payable in 60 to 72 monthly installments. We also have a $165.4 million term loan facility that matures in April 2032, and it is secured by first-priority mortgages on specific parcels of owned real estate. We also maintain a short-term line of credit secured by our portfolio of marketable securities. We did not have any amounts advanced against the line as of September 27, 2025, and the maximum available borrowings were $4.9 million. We anticipate that cash generated from operations, together with amounts available under our credit facilities, will be sufficient to meet our requirements for the foreseeable future. To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that we will obtain these funds through additional borrowings, equity offerings, or a combination of these potential sources of liquidity. Our ability to fund future operating expenses and capital expenditures, as well as our ability to meet future debt service obligations or refinance our indebtedness, will depend on our future operating performance, which will be affected by general economic, financial, and other factors beyond our control. In the thirty-nine weeks ended September 27, 2025, our capital expenditures totaled $191.3 million. These expenditures primarily consisted of transportation equipment, investments in support of our value-added service operations and the expansion of our terminal network. Through the remainder of 2025, we expect our capital expenditures to be in the range of $25 million to $35 million. The following table presents our cash and cash equivalents, marketable securities, and outstanding debt and the present value of our operating lease liabilities as of September 27, 2025 and December 31, 2024 (in thousands): September 27, 2025 December 31, 2024 Cash and cash equivalents $ 27,381 $ 19,351 Marketable securities 9,791 11,590 Outstanding debt 827,014 762,641 Present value of operating lease liabilities 110,272 79,351 Debt At September 27, 2025, we were in compliance with all financial covenants under our credit agreements and the agreements governing our promissory notes. For additional information on our financing arrangements, see Item 1, Note 8 to the Unaudited Consolidated Financial Statements. 33 Subsequent Event – Third Amendment Agreement; Credit Tenant Lease Financing On October 1, 2025, which is subsequent to quarter-end, we entered into a third amendment agreement to our Revolving Credit Facility. The amendment modifies the credit agreement by increasing the maximum revolving amount by $100 million to $500 million through a partial exercise of the accordion feature set forth in the credit agreement. The amendment further modifies the credit agreement to permit a subsidiary of Universal to borrow up to $200 million under a potential credit tenant lease financing transaction, provided that the net proceeds of such financing are used (i) to repay in full all outstanding indebtedness and other obligations owing under the UACL Credit Agreement, and (ii) to prepay in part the outstanding revolving loans under the third amendment agreement. On October 22, 2025, which is subsequent to quarter-end, we completed a credit tenant lease (“CTL”) financing transaction by issuing a senior secured promissory note in the principal amount of approximately $195.9 million. The note bears interest at a fixed rate of 6.84% per annum and matures on November 15, 2034. The note is secured primarily by our interests under a long-term composite sublease agreement. The CTL debt is non-recourse to the Company and its subsidiaries, except for customary limited-recourse obligations under indemnity and guaranty agreements relating to environmental matters, lease-term compliance, and certain representations, warranties, and covenants. We used the net proceeds of the CTL financing to (i) repay in full approximately $35.3 million of outstanding indebtedness owed under the UACL Credit Agreement and (ii) prepay in part approximately $158.6 million of the outstanding revolving loans under the Revolving Credit Facility. After giving effect to the repayment, approximately $218.8 million remains outstanding under the Revolving Credit Facility. As of the filing date of this Form 10-Q, the Company’s pro forma availability under our Revolving Credit Facility, after giving effect to the CTL financing, was approximately $275.1 million. Management expects available cash, operating cash flows, and access to credit markets to be sufficient to meet anticipated operating, investing, and financing requirements for at least the next twelve months. Discussion of Cash Flows At September 27, 2025, we had cash and cash equivalents of $27.4 million compared to $19.4 million at December 31, 2024. Operating activities provided $135.9 million in net cash, financing activities provided an additional $56.0 million, and we used $181.8 million in investing activities. The $135.9 million in net cash provided by operations was primarily attributed to $(103.6) million of net losses, which reflects non-cash depreciation and amortization, noncash lease expense, impairment expenses, gains (losses) on marketable equity securities and equipment sales, amortization of debt issuance costs, stock-based compensation, provisions for credit losses, and a change in deferred income taxes totaling $253.3 million, net. Net cash provided by operating activities also reflects an aggregate increase in net working capital totaling $13.8 million. The primary drivers behind the increase in working capital were principal reductions in operating lease liabilities during the period, and increases in prepaid expenses and other receivables and prepaid income taxes, and decreases in accrued expenses, accruals for insurance and claims, and other current and long-term liabilities. These were partially offset by decreases in trade accounts receivable and other assets, and increases in trade accounts payable. Affiliate transactions increased net cash provided by operating activities by $3.4 million. The decrease in net cash resulted from an increase in accounts payable to affiliates of $4.3 million offset by an increase in accounts receivable from affiliates of $0.9 million. The $181.8 million in net cash used in investing activities consisted of $191.3 million in capital expenditures, which was partially offset by $6.5 million in proceeds from the sale of equipment and $3.0 million in proceeds from the sale of marketable securities. Financing activities provided $56.0 million in net cash during the thirty-nine weeks ended September 27, 2025. We had outstanding borrowings totaling $827.0 million at September 27, 2025 compared to $762.6 million at December 31, 2024. During the period, we made payments on term loan and equipment and real estate notes totaling $89.2 million, borrowed $80.3 million for new equipment and had net borrowings on our revolving lines of credit totaling $73.3 million. During the period, we also paid cash dividends of $8.3 million and purchased $0.1 million of treasury stock. Off Balance Sheet Arrangements As of September 27, 2025, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources. 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, 2024. There have been no changes in our accounting policies during the thirteen weeks ended September 27, 2025. 34 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. 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 September 27, 2025. For additional information, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.