UNIVERSAL LOGISTICS HOLDINGS, INC. Q1 FY2024 earnings call

• Tim thanked the team and customers. - Contract logistics segment had outsized results with revenues up 48.4% due to a recent program award, with 71 value-added programs managed at Q1 end. Q2 is typically strong for contract logistics, auto industry is doing well, and new programs are launching. - Trucking segment revenues decreased 12.6%, but specialized heavy haul buoyed results, with expectations of uptick later in the year. - Intermodal segment revenues decreased 30.9% due to volume and assessorial/ fuel surcharge revenue declines. - Company-managed brokerage segment revenues decreased 8.7% due to revenue per load decreases, with excess capacity being a constraint. - Universal has a strong transportation foundation, with efforts to optimize segments, expand in Mexico, and evaluate M&A. - Contract logistics sales pipeline is full with over $1 billion in value-added and dedicated opportunities, and cross-selling opportunities are being sought.

In the first quarter of 2024, Universal Logistics Holdings reported $491.9 million in total revenue. The contract logistics segment had revenues increase 48.4% to $313.5 million, which is 63.7% of total revenue. The trucking segment saw revenues decrease 12.6% to $69.7 million, making up 14.2% of total revenue. The intermodal segment had revenues decrease 30.9% to $76.7 million, accounting for 15.6% of total revenue. The company-managed brokerage segment had revenues decrease 8.7% to $31 million, representing 6.3% of total revenue.

• For Q2 2024, expecting top line revenues between $450 million to $475 million and operating margins in the 9% to 11% range. - Full-year capital expenditures expected to be in the $315 million to $330 million range. - Interest expense expected to come in between $26 million and $28 million.

• Challenges in the transportation industry, including volume and rate pressures in transactional transportation. - Excess capacity being a constraint in the brokerage market. - Intermodal segment facing volume declines and assessorial charge decreases. - Compliance issues in Southern California operations.

Q: Clarify on the contract logistics program, whether it's a one-off and margin implications.

A: Jude stated it's a 1-year phenomenon with possibility of future business, $95.3 million recognized in Q1, expecting additional revenues in Q2-Q4.

Q: SAAR and customer expectations?

A: Tim said facilities serviced in contract logistics are high-demand, gained additional programs, and expect overall increase in units.

Q: Intermodal demand?

A: Tim said different regions have different volume flows, retail customers on West Coast have steady volumes but no significant increase in inland areas.

Q: Update on Southern California operation?

A: Jude said business operated at slightly breakeven in March, better than trough last year; Tim added they're compliant and confident to service customers when uptick occurs.