What changed in this filing

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Item 1. Financial Statements

2021-11-12 compared with 2021-08-12 · 72 added, 60 removed, 495 unchanged (21% of the section changed)

53 unchanged sentences

Thirteen Weeks Ended

Twenty-six Weeks Ended

Thirty-nine Weeks Ended

Operating revenues:

29 unchanged sentences

Thirteen Weeks Ended

Twenty-six Weeks Ended

Thirty-nine Weeks Ended

Other comprehensive income (loss):

8 unchanged sentences

(In thousands)

Twenty-six Weeks Ended

Thirty-nine Weeks Ended

Cash flows from operating activities:

22 unchanged sentences

Proceeds from sale of marketable securities

Payment of acquisition obligations

Net cash used in investing activities

24 unchanged sentences

Balances – December 31, 2019

Comprehensive (loss)

Comprehensive income (loss)

Dividends ($ 0.105 per share)

2 unchanged sentences

Balances - April 4, 2020

Comprehensive income

Comprehensive income (loss)

Purchases of treasury stock

Balances - July 4, 2020

Comprehensive income (loss)

Balances – October 3, 2020

Balances – December 31, 2020

Comprehensive income

Comprehensive income (loss)

Dividends ($ 0.105 per share)

1 unchanged sentence

Balances - April 3, 2021

Comprehensive income

Comprehensive income (loss)

Dividends ($ 0.105 per share)

Balances - July 3, 2021

Comprehensive income (loss)

Dividends ($ 0.105 per share)

Balances –October 2, 2021

See accompanying notes to consolidated financial statements.

74 unchanged sentences

The fair value of marketable equity securities is determined based on quoted market prices in active markets, as described in Note 7.

The following table sets forth market value, cost, and unrealized gains on equity securities (in thousands):

The following table sets forth market value, cost, and unrealized gains (losses) on equity securities (in thousands):

Unrealized gain (loss)

5 unchanged sentences

Thirteen weeks ended

Twenty-six weeks ended

Thirty-nine weeks ended

Realized gain

3 unchanged sentences

Realized gain, net of taxes

During the thirteen-week and twenty-six week periods ended July 3, 2021, our marketable equity securities portfolio experienced a net unrealized pre-tax gain (loss) in market value of approximately $ 385,000 and $ 1,359,000 , respectively, which was reported in other non-operating income (expense) for the period.

During the thirteen-week and twenty-six week periods ended July 4, 2020, our marketable equity securities portfolio experienced a net unrealized pre-tax gain (loss) in market value of approximately $ 875,000 and $( 2,534,000 ), respectively, which was reported in other non-operating income (expense) for the period.

During the thirteen-week and thirty-nine week periods ended October 2, 2021, our marketable equity securities portfolio experienced a net unrealized pre-tax (loss) gain in market value of approximately $( 110,000 ) and $ 1,249,000 , respectively, which was reported in other non-operating income (expense) for the period.

During the thirteen-week and thirty-nine week periods ended October 3, 2020, our marketable equity securities portfolio experienced a net unrealized pre-tax (loss) in market value of approximately $( 497,000 ) and $( 3,031,000 ), respectively, which was reported in other non-operating income (expense) for the period.

UNIVERSAL LOGISTICS HOLDINGS, INC.

9 unchanged sentences

Interest Rates

at July 3, 2021

at October 2, 2021

Outstanding Debt:

15 unchanged sentences

The Credit Agreement includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions.

At July 3, 2021, we were in compliance with all covenants under the facility, and $ 49.5 million was available for borrowing on the revolver .

At October 2, 2021, we were in compliance with all covenants under the facility, and $ 27.8 million was available for borrowing on the revolver .

UNIVERSAL LOGISTICS HOLDINGS, INC.

6 unchanged sentences

Each of the notes bears interest at a variable rate ranging from LIBOR plus 1.85 % to LIBOR plus 2.25 % .

At July 3, 2021, we were in compliance with all covenants.

At October 2, 2021, we were in compliance with all covenants.

(4) Our Margin Facility is a short-term line of credit secured by our portfolio of marketable securities.

1 unchanged sentence

The amount available under the line of credit is based on a percentage of the market value of the underlying securities.

At July 3, 2021, the maximum available borrowings under the line of credit were $ 4.2 million.

At October 2, 2021, the maximum available borrowings under the line of credit were $ 4.2 million.

The Company is also party to two interest rate swap agreements that qualify for hedge accounting.

The Company executed the swap agreements to fix a portion of the interest rates on its variable rate debt that have a combined notional amount of $ 12.0 million at July 3, 2021.

The Company executed the swap agreements to fix a portion of the interest rates on its variable rate debt that have a combined notional amount of $ 11.4 million at October 2, 2021.

Under the swap agreements, the Company receives interest at the one-month LIBOR rate plus 2.25 % and pays a fixed rate.

1 unchanged sentence

The second swap became effective in October 2016 , has a rate of 3.83 % (amortizing notional amount of $ 1.4 million) and expires in May 2022 .

At July 3, 2021, the fair value of the swap agreements was a liability of $ 0.4 million.

At October 2, 2021, the fair value of the swap agreements was a liability of $ 0.4 million.

Since these swap agreements qualify for hedge accounting, the changes in fair value are recorded in other comprehensive income (loss), net of tax.

35 unchanged sentences

We categorize these borrowings as Level 2 in the fair value hierarchy.

The carrying value and estimated fair value of these promissory notes at July 3, 2021 is summarized as follows:

The carrying value and estimated fair value of these promissory notes at October 2, 2021 is summarized as follows:

Carrying Value

7 unchanged sentences

We recognize a right-of-use asset and a lease liability on the effective date of a lease agreement.

As of July 3, 2021, our obligations under operating lease arrangements primarily related to the rental of office space, warehouses, freight distribution centers, terminal yards and equipment.

As of October 2, 2021, our obligations under operating lease arrangements primarily related to the rental of office space, warehouses, freight distribution centers, terminal yards and equipment.

Our lease obligations typically do not include options to purchase the leased property, nor do they contain residual value guarantees or material restrictive covenants.

Options to extend or terminate an agreement are included in the lease term when it becomes reasonably certain the option will be exercised.

As of July 3, 2021, we were not reasonably certain of exercising any renewal or termination options, and as such, no adjustments were made to the right-of-use lease assets or corresponding liabilities.

As of October 2, 2021, we were not reasonably certain of exercising any renewal or termination options, and as such, no adjustments were made to the right-of-use lease assets or corresponding liabilities.

We did not separate lease and nonlease components of contracts for purposes of determining the right-of use lease asset and corresponding liability.

4 unchanged sentences

Lease expense for short-term and long-term operating leases is recognized on a straight-line basis over the lease term.

The following table summarizes our lease costs for the thirteen weeks and twenty-six weeks ended July 3, 2021 and July 4, 2020 (in thousands):

Thirteen weeks ended July 3, 2021

The following table summarizes our lease costs for the thirteen weeks and thirty-nine weeks ended October 2, 2021 and October 3, 2020 (in thousands):

Thirteen weeks ended October 2, 2021

With Affiliates

5 unchanged sentences

Total lease cost

Thirteen weeks ended July 4, 2020

Thirteen weeks ended October 3, 2020

With Affiliates

8 unchanged sentences

Leases – continued

Twenty-six weeks ended July 3, 2021

Thirty-nine weeks ended October 2, 2021

With Affiliates

5 unchanged sentences

Total lease cost

Twenty-six weeks ended July 4, 2020

Thirty-nine weeks ended October 3, 2020

With Affiliates

5 unchanged sentences

Total lease cost

The following table summarizes other lease related information as of and for the twenty-six week periods ended July 3, 2021 and July 4, 2020 (in thousands):

The following table summarizes other lease related information as of and for the thirty-nine week periods ended October 2, 2021 and October 3, 2020 (in thousands):

October 2, 2021

Other information

1 unchanged sentence

Right-of-use assets obtained in exchange for new operating lease liabilities

Right-of-use asset change due to lease termination

Future right-of-use asset change due to lease signed with a future commencement date

Weighted-average remaining lease term (in years)

Weighted-average discount rate

October 3, 2020

Other information

Cash paid for amounts included in the measurement of operating leases

Right-of-use asset change due to lease termination

Right-of-use assets obtained in exchange for new operating lease liabilities

Right-of-use asset change due to lease termination

Weighted-average remaining lease term (in years)

3 unchanged sentences

Leases – continued

Future minimum lease payments under these operating leases as of July 3, 2021, are as follows (in thousands):

Future minimum lease payments under these operating leases as of October 2, 2021, are as follows (in thousands):

With Affiliates

With Third Parties

2021 (remaining)

Total required lease payments

5 unchanged sentences

Universal also purchases other services from affiliates owned by our controlling shareholder, including CenTra.

Following is a schedule of costs incurred and included in operating expenses for services provided by affiliates for the thirteen weeks and twenty-six weeks ended July 3, 2021 and July 4, 2020, respectively (in thousands):

Following is a schedule of costs incurred and included in operating expenses for services provided by affiliates for the thirteen weeks and thirty-nine weeks ended October 2, 2021 and October 3, 2020, respectively (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

Thirty-nine weeks ended

Administrative support services

17 unchanged sentences

Other services from affiliates, including contracted transportation services, are delivered to us on a per-transaction basis or pursuant to separate contractual arrangements provided in the ordinary course of business.

At July 3, 2021 and December 31, 2020, amounts due to affiliates were $ 14.0 million and $ 17.1 million, respectively.

At October 2, 2021 and December 31, 2020, amounts due to affiliates were $ 15.0 million and $ 17.1 million, respectively.

In our Consolidated Balance Sheets, we record our insured claims liability and the related recovery from an affiliate insurance provider in insurance and claims, and other receivables.

At July 3, 2021 and December 31, 2020, there were $ 14.6 million and $ 13.3 million, respectively, included in each of these accounts for insured claims.

We purchased wheels and tires from an affiliate during the twenty-six weeks ended July 4, 2020 totaling $ 618,000 .

There were no such purchases made during the twenty-six weeks ended July 3, 2021.

At October 2, 2021 and December 31, 2020, there were $ 14.6 million and $ 13.3 million, respectively, included in each of these accounts for insured claims.

We contracted with an affiliate to provide real property improvements during the thirty-nine weeks ended October 2, 2021 totaling $ 956,000 .

During the thirty-nine weeks ended October 3, 2020, we purchased wheels and tires from an affiliate totaling $ 618,000 .

Services provided by Universal to Affiliates

We periodically assist our affiliates by providing selected transportation and logistics services in connection with their specific customer contracts or purchase orders.

Following is a schedule of services provided to affiliates for the thirteen weeks and twenty-six weeks ended July 3, 2021 and July 4, 2020 (in thousands):

Following is a schedule of services provided to affiliates for the thirteen weeks and thirty-nine weeks ended October 2, 2021 and October 3, 2020 (in thousands):

Thirteen weeks ended

Twenty-six weeks ended

Thirty-nine weeks ended

Purchased transportation and equipment rent

At July 3, 2021 and December 31, 2020, amounts due from affiliates were $ 1.0 million and $ 1.2 million, respectively.

At October 2, 2021 and December 31, 2020, amounts due from affiliates were $ 1.0 million and $ 1.2 million, respectively.

Stock Based Compensation

3 unchanged sentences

The grants under the Plan may be made in the form of options, restricted stock awards, restricted stock purchase rights, stock appreciation rights, phantom stock units, restricted stock units or shares of unrestricted common stock.

On September 9, 2021, the Company granted 2,355 shares of restricted stock to an employee of the Company.

The restricted stock award has a fair value of $ 20.46 per share, based on the closing price of the Company’s stock on the grant date.

The shares will vest in five equal increments on each August 9 in 2022, 2023, 2024, 2025 and 2026, subject to continued employment with the Company.

On February 5, 2020, the Company granted 5,000 shares of restricted stock to our Chief Financial Officer.

6 unchanged sentences

The restricted stock awards have a grant date fair value of $ 23.56 per share, based on the closing price of the Company’s stock, and any non-vested shares under the awards vest in four equal increments on each February 20 in 2020, 2021, 2022 and 2023.

The vesting of restricted stock awards to a grantee may be accelerated under certain conditions, including retirement.

UNIVERSAL LOGISTICS HOLDINGS, INC.

1 unchanged sentence

Stock Based Compensation - continued

The vesting of restricted stock awards to a grantee may be accelerated under certain conditions, including retirement.

The following table summarizes the status of the Company’s non-vested shares and related information for the period indicated:

2 unchanged sentences

Non-vested at January 1, 2021

Balance at July 3, 2021

In each of the twenty-six week periods ended July 3, 2021 and July 4, 2020, the total grant date fair value of vested shares recognized as compensation costs was $ 0.2 million.

As of July 3, 2021, there was approximately $ 1.5 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements.

Balance at October 2, 2021

In each of the thirty-nine week periods ended October 2, 2021 and October 3, 2020, the total grant date fair value of vested shares recognized as compensation costs was $ 0.2 million.

As of October 2, 2021, there was approximately $ 1.6 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements.

That cost is expected to be recognized on a straight-line basis over the remaining vesting period.

As a result, the Company expects to recognize stock-based compensation expense of $ 0.2 million in each year of 2022 and 2023, and $ 0.4 million in 2024, $ 0.3 million in 2026, and $ 0.2 million in each 2027 and 2028.

As a result, the Company expects to recognize stock-based compensation expense of $ 0.2 million in each year of 2022 and 2023, $ 0.4 million in 2024, $ 0.1 million in 2025, $ 0.3 million in 2026, and $ 0.2 million in each 2027 and 2028.

Earnings Per Share

1 unchanged sentence

Diluted earnings per common share include dilutive common stock equivalents determined by the treasury stock method.

For the thirteen weeks and twenty-six weeks ended July 3, 2021, there were 16,704 and 15,689 weighted average non-vested shares of restricted stock, respectively, included in the denominator for the calculation of diluted earnings per share.

For the thirteen weeks and twenty-six weeks ended July 4, 2020, no shares of non-vested restricted stock were included in the denominator for the calculation of diluted earnings per share.

In each of the thirteen weeks and twenty-six weeks ended July 4, 2020, we excluded 85,625 shares of non-vested restricted stock from the calculation of diluted earnings per share because such shares were anti-dilutive.

No such shares were excluded from the calculation of diluted earnings per share during the thirteen weeks or twenty-six weeks ended July 3, 2021.

On April 29, 2021 , our Board of Directors declared a cash dividend of $ 0.105 per share of common stock, payable on July 6, 2021 to shareholders of record at the close of business on June 7, 2021 .

For the thirteen weeks and thirty-nine weeks ended October 2, 2021, there were 8,604 and 13,433 weighted average non-vested shares of restricted stock, respectively, included in the denominator for the calculation of diluted earnings per share.

For the thirteen weeks and thirty-nine weeks ended October 3, 2020, no shares of non-vested restricted stock were included in the denominator for the calculation of diluted earnings per share.

In each of the thirteen weeks and thirty-nine weeks ended October 2, 2021, we excluded 13,750 shares of non-vested restricted stock from the calculation of diluted earnings per share because such shares were anti-dilutive.

In each of the thirteen weeks and thirty-nine weeks ended October 3, 2020, we excluded 85,625 shares of non-vested restricted stock from the calculation of diluted earnings per share because such shares were anti-dilutive.

On July 29, 2021 , our Board of Directors declared a cash dividend of $ 0.105 per share of common stock, payable on October 4, 2021 to shareholders of record at the close of business on September 6, 2021 .

Declaration of future cash dividends is subject to final determination by the Board of Directors each quarter after its review of our financial condition, results of operations, capital requirements, any legal or contractual restrictions on the payment of dividends and other factors the Board of Directors deems relevant.

15 unchanged sentences

Separate balance sheets are not prepared by segment, and we do not provide asset information by segment to the chief operating decision maker.

The following tables summarize information about our reportable segments for the thirteen week and twenty-six week periods ended July 3, 2021 and July 4, 2020 (in thousands):

The following tables summarize information about our reportable segments for the thirteen week and thirty-nine week periods ended October 2, 2021 and October 3, 2020 (in thousands):

Operating Revenues

Thirteen weeks ended

Twenty-six weeks ended

Thirty-nine weeks ended

Contract logistics

3 unchanged sentences

Thirteen weeks ended

Twenty-six weeks ended

Thirty-nine weeks ended

Contract logistics

3 unchanged sentences

Thirteen weeks ended

Twenty-six weeks ended

Thirty-nine weeks ended

Contract logistics

5 unchanged sentences

Our principal commitments relate to long-term real estate leases and payment obligations to equipment vendors.

On March 17, 2021, the Company received a complaint from the National Labor Relations Board (the “NLRB”) based on charged alleged by the International Brotherhood of Teamsters against four of the Company’s operating subsidiaries.

On March 17, 2021, the Company received a complaint from the National Labor Relations Board (the “NLRB”) based on charges alleged by the International Brotherhood of Teamsters against four of the Company’s operating subsidiaries.

The charges stem from the Company’s decision to close underperforming operations in California in December 2019.

The Teamsters allege, among other things, that the Company’s subsidiaries engaged in unfair labor practices and failure to negotiate in good faith and are seeking reinstatement of terminated individuals with back pay.

The gross amount of the claim for back pay is approximately $ 5.9 million.

The amount of the back pay does not, however, take into consideration any of the offsetting earnings made by terminated individuals since their separation from the Company.

In April 2021, the Company answered the complaint by denying it engaged in any unfair labor practices and maintaining that the Company closed the underperforming California terminal due to financial reasons.

In June 2021, the Company participated in the first phase of hearings with the NLRB.

The hearing will be continued in late July and is expected to be completed shortly thereafter.

In October 2021, the Company received an adverse ruling requiring the Company to, among other things, reinstate the terminated drivers and compensate them for back pay.

The Company intends to appeal the decision.

The calculation of the amount owed to the drivers will take into consideration any offsetting earnings made by terminated individuals since their separation from the Company.

The Company currently estimates the possible range of financial exposure in the matter to be between $ 4.3 million and $ 7.2 million.

5 unchanged sentences

As a result of the settlement, during the second quarter 2021, the Company recorded a $ 5.7 million gain in other non-operating income.

On June 9, 2021, the Company received the first payment of $ 2.0 million.

The Company received the first two $ 2.0 million payments of each on June 9, 2021 and September 30, 2021.

The Company is involved in certain other claims and pending litigation arising from the ordinary conduct of business.

2 unchanged sentences

However, if we experience claims that are not covered by our insurance or that exceed our estimated claim reserve, it could increase the volatility of our earnings and have a materially adverse effect on our financial condition, results of operations or cash flows.

At July 3, 2021, approximately 40 % of our employees in the United States, Canada and Colombia, and 86 % of our employees in Mexico were subject to collective bargaining agreements that are renegotiated periodically, 21 % of which are subject to contracts that expire in 2021.

At October 2, 2021, approximately 38 % of our employees in the United States, Canada and Colombia, and 86 % of our employees in Mexico were subject to collective bargaining agreements that are renegotiated periodically, none of which are subject to contracts that expire in 2021.

Subsequent Events

On July 29, 2021 , our Board of Directors declared the regular quarterly cash dividend of $ 0.105 per share of common stock, payable to shareholders of record at the close of business on September 6, 2021 and is expected to be paid on October 4, 2021 .

On October 28, 2021 , our Board of Directors declared the regular quarterly cash dividend of $ 0.105 per share of common stock, payable to shareholders of record at the close of business on December 6, 2021 and is expected to be paid on January 4, 2022 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements