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UL

UNIVERSAL LOGISTICS HOLDINGS, INC. (ULH)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue grew 19.0% year over year to $465.1M with operating margin of 8.2%; diluted EPS was $0.77, down 4.9% YoY, as mix and higher D&A from Parsec compressed margins .
  • Segment divergence persisted: Contract Logistics delivered $307.4M revenue (+52.7% YoY) and $39.1M operating income (12.7% margin), aided by $51.3M specialty development project and initial Parsec consolidation; Intermodal posted a $(9.7)M operating loss with (13.2)% margin amid SoCal headwinds; Trucking improved to $5.8M operating income (6.9% margin) on strength in specialized wind .
  • Management reset 2025 guidance lower: revenue $1.7–$1.8B (prior $1.8–$1.9B) and operating margin 7–9% (prior 10–12%), citing specialty project roll-off, added D&A/interest from acquisitions, auto softness in Q1, and Intermodal headwinds; Q1 2025 guide revenue $390–$410M, operating margin 6.5–7.5%, EBITDA margin 14.5–16.5% .
  • Dividend maintained at $0.105 per share (payable Apr 1, 2025); note one transcript instance referenced $0.15, but 8‑K confirms $0.105 and CFO reiterated $0.105 on the call .

What Went Well and What Went Wrong

What Went Well

  • Contract Logistics momentum: revenue +52.7% YoY to $307.4M; operating income up $7.0M to $39.1M; management emphasized it is the “cornerstone of our success” and called Parsec “truly transformational” .
  • Specialized wind driving Trucking: trucking operating income rose to $5.8M; average revenue per load ex-fuel +30.5% YoY; management: “specialized heavy‑haul wind business… continues to deliver outstanding results” .
  • Strong sales pipeline: “promising opportunities totaling over $800 million,” enabling selective, margin‑focused growth .

What Went Wrong

  • Intermodal deterioration: revenue fell 15.9% YoY to $73.1M; operating loss widened to $(9.7)M; load volumes −15.3%, rates −2.2%; Southern California remained particularly challenging .
  • Margin compression at Contract Logistics: segment margin declined to 12.7% (from 15.9%) due largely to ~$6M Parsec D&A lowering margin by ~200 bps; management flagged seasonal and auto production softness impacting dedicated utilization .
  • Consolidated margin headwinds and higher interest: Q4 operating margin 8.2% (vs 8.7% LY); interest expense rose to $9.8M and FY capex was elevated at $248.3M; leverage increased with net debt/TTM EBITDA at 2.31x (ex‑leases) .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$462.2 $426.8 $465.1
Operating Income ($USD Millions)$47.1 $42.6 $38.3
Operating Margin (%)10.2% 10.0% 8.2%
Net Income ($USD Millions)$30.7 $26.5 $20.2
Diluted EPS ($)$1.17 $1.01 $0.77
EBITDA ($USD Millions)$84.8 $72.9 $73.5
EBITDA Margin (%)18.4% 17.1% 15.8%
YoY Revenue Growth (%)+12.0% +1.3% +19.0%
YoY EPS Growth (%)+30.0% +14.7% −4.9%
YoY Operating Income Growth (%)+29.4% +16.0% +12.3%

Segment performance

Segment MetricQ4 2023Q3 2024Q4 2024
Contract Logistics Revenue ($M)$201.3 $245.2 $307.4
Contract Logistics Operating Income ($M)$32.1 $45.6 $39.1
Contract Logistics Operating Margin (%)15.9% 18.6% 12.7%
Intermodal Revenue ($M)$86.9 $77.6 $73.1
Intermodal Operating Income ($M)$(1.0) $(1.1) $(9.7)
Intermodal Operating Margin (%)(1.1)% (1.5)% (13.2)%
Trucking Revenue ($M)$75.2 $87.0 $83.8
Trucking Operating Income ($M)$2.5 $7.1 $5.8
Trucking Operating Margin (%)3.3% 8.2% 6.9%
Other Revenue ($M)$27.5 $17.0 $0.8
Other Operating Income ($M)$0.5 $(9.0) $3.1

KPIs

KPIQ4 2023Q3 2024Q4 2024
Contract Logistics – Active Value‑Added Programs (count)71 70 90
Contract Logistics – Avg Value‑Added Direct Employees5,582 5,189 7,337
Intermodal – Loads (ex freight forwarding)118,553 103,970 100,457
Intermodal – Avg Rev/Load ex Fuel ($)$549 $557 $537
Intermodal – Avg Tractors1,830 1,596 1,451
Intermodal – Depots9 8 8
Trucking – Loads43,468 36,909 36,068
Trucking – Avg Rev/Load ex Fuel ($)$1,673 $2,222 $2,183
Trucking – Avg Tractors828 755 699
Trucking – Avg Length of Haul (miles)399 395 394

Balance sheet and capex

MetricQ3 2024Q4 2024
Cash and Cash Equivalents ($M)$11.8 $19.4
Marketable Securities ($M)$11.7 $11.6
Debt – Net ($M)$561.2 $759.1
Capex in Quarter ($M)$65.1 $37.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($B)FY 2025$1.8–$1.9 $1.7–$1.8 Lowered
Operating Margin (%)FY 202510–12 7–9 Lowered
Capex ($M)FY 2025$140–$160 $125–$150 (pre real estate) Lowered
Interest Expense ($M)FY 2025$45–$50 $48–$51 Raised
Revenue ($M)Q1 2025—$390–$410 New
Operating Margin (%)Q1 2025—6.5–7.5 New
EBITDA Margin (%)Q1 2025—14.5–16.5 New
Dividend ($/share)Quarterly$0.105 (Dec 2024 declaration) $0.105 (payable Apr 1, 2025) Maintained

Drivers of guidance change: specialty development program roll‑off, higher D&A from acquisitions (Parsec ~$6–$8M quarterly purchase accounting costs), additional interest on borrowings, Q1 auto production softness, continued Intermodal headwinds, and exclusion of tariff/regulatory/tax impacts from guidance .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Intermodal turnaroundQ2: $(8.3)M loss; rates −5.9% YoY; focus on cost control . Q3: loss narrowed to $(1.1)M; OR 101.5%; stabilization noted .Loss widened to $(9.7)M; SoCal headwinds; new leadership, sales push, tech rollout, facility/lease rationalization .Mixed near term; structural improvement actions underway.
Parsec acquisition integrationAnnounced on 9/30; expected ~$230M revenue and ~$30M EBITDA annually .Added $59.5M Q4 revenue; ~$6M D&A lowered CL margin ~200 bps; management calls it “transformational” .Integration progressing; GAAP margin dilution, EBITDA accretive.
Specialized wind businessQ2/Q3: drove higher revenue per load; more projects scheduled .32.1% of Trucking revenue in 2024; robust demand; customers/projects largely non‑federal land (limited policy risk) .Strengthening; portfolio diversification goal in 2025.
Automotive productionQ3: SAAR ~15.8M supportive .Q4: slight downturn; fewer shifts/weekend work; 2025 SAAR expected ~16M; Q1 softness factored into guidance .Near-term soft; stable for 2025.
Tariffs/macroLimited prior discussion.Canada ~$10.5M, Mexico just under $50M annual sales exposure (~3–3.5% of guide); impacts uncertain; guidance excludes tariff impacts .Watch risk; limited direct exposure.
Technology initiativesNot highlighted earlier.New intermodal visibility tech rolling out in 2025 .New initiative.

Management Commentary

  • “Universal notched another solid performance during the fourth quarter, making the full‑year 2024 our second best financial performance in company history… Our contract logistics segment continues to be the cornerstone of our success… such as our recent acquisition of Parsec.” — Tim Phillips, CEO .
  • “Parsec had its highest Q4 revenue in its history… The Parsec acquisition was truly transformational for Universal and brings our Contract Logistics segment annual revenue run rate to over $1.1 billion.” — Tim Phillips .
  • “Included in the contract logistics operating results was $6 million of depreciation and amortization related to Parsec, which lowered the fourth quarter 2024 operating margin in this segment by 200 basis points.” — Jude Beres, CFO .
  • “We thought we needed a new level of visibility… new technology will roll out over the year 2025… Southern California… rationalized headcount… consolidated facilities… rationalized leases… property rationalization.” — Tim Phillips (Intermodal plan) .
  • “For the full year 2025, we are expecting total operating revenues between $1.7 billion to $1.8 billion and operating margins in the 7% to 9% range… Q1 2025 revenues between $390 million and $410 million… EBITDA margin 14.5% to 16.5%.” — Jude Beres .

Q&A Highlights

  • Tariff exposure quantification: Canada ~$10.5M; Mexico just under $50M in annual sales; ~3–3.5% of 2025 revenue guide; management lacks specific customer guidance; positioning for nearshoring/global supply chain resilience .
  • Contract Logistics margin mechanics: Parsec historical 8–12% operating margin, but GAAP purchase accounting adds $6–$8M D&A/intangibles, compressing GAAP margin to ~1–2% at Parsec; dedicated utilization hit from auto plants moving to fewer days/shifts .
  • Intermodal path to improvement: leadership and sales rebuild; technology rollout; SoCal cost rationalization (headcount, facilities, leases, property); centralization to improve driver/customer interfaces; competitive rate environment expected to ease over time .
  • Trucking demand durability: wind projects drove Q4 strength; pipeline robust; broader van/flatbed rates remain soft; bidding activity improved early 2025 .
  • Operating expenses: personnel increases tied to Parsec (~2,100 employees, ~1,300 union); “Other” expense changes ~93% driven by specialty development program costs .

Estimates Context

  • Wall Street consensus for Q4 2024 (EPS and revenue) from S&P Global was unavailable during this session due to provider limits; therefore, estimate comparisons cannot be presented at this time. Values would be retrieved from S&P Global.
  • Given the guidance reset (FY 2025 margins 7–9% vs prior 10–12% and revenue $1.7–$1.8B vs prior $1.8–$1.9B), sell‑side models likely need to recalibrate lower on margin assumptions and interest expense, and adjust segment trajectories (Intermodal loss depth, Parsec GAAP margin dilution) .

Key Takeaways for Investors

  • Contract Logistics remains the engine; Parsec adds scale and new customer access, but expect GAAP margin dilution from purchase accounting while EBITDA remains the more representative profitability lens; prioritize EBITDA and cash conversion tracking .
  • Intermodal is the swing factor in 2025: management is executing a turnaround in SoCal via cost and tech initiatives; monitor quarterly OR, load growth, and pricing to gauge inflection .
  • Specialized wind provides durable Trucking support: project visibility and customer diversification efforts mitigate core TL softness; watch bid activity and mix shifts .
  • Guidance reset is the catalyst: FY 2025 revenue and margin targets lowered; Q1 2025 margin compression expected; near‑term revisions likely as analysts adapt to higher D&A/interest and auto production softness .
  • Balance sheet leverage increased with acquisitions; net debt/TTM EBITDA at 2.31x (ex‑leases). Track capex normalization ($125–$150M 2025) and interest expense trajectory ($48–$51M) .
  • Dividend continuity ($0.105/share) supports yield; reconcile transcript discrepancy with 8‑K if questioned; cash/marketable securities stable .
  • Trading lens: stock sensitivity near‑term to Intermodal loss magnitude and Q1 execution vs guide; medium‑term thesis depends on Parsec synergy realization, sustained CL double‑digit EBITDA margins, and eventual Intermodal inflection .

Additional Relevant Q4 2024 Press Releases

  • Universal announced a new Intermodal initiative in October 2024, consistent with management’s emphasis on strengthening the intermodal platform ahead of 2025; the Q4 disclosures detail SoCal restructuring and technology rollout .

Notes and sources: All figures and statements are sourced from ULH’s Q4 2024 Form 8‑K and press release , Q4 2024 earnings call transcripts – –, and prior quarter releases/calls for trend analysis – – –.