New Coverage – Universal Logistics Holdings, Inc. (ULH)

The U.S. economy may be beset by inflation and frazzled by high interest rates used as a remedy, but consumers keep on buying.  Granted there has been some pull back in the flow of goods, but the trucks keep on rolling. Universal Logistics Holdings is a beneficiary, with its truckload, freight forwarding and customs brokerage services.   Importantly, Universal is distinguished in the highly populated logistics market with value-added services such as material handling, warehousing, container management, and intermodal support.  Its customers are across the spectrum from consumers goods to automotive manufacturers to steel producers.

In the first nine months of 2023, the Company recorded $1.27 billion in total sales, of which value-added services contributed $370.23 million.  Net income in the nine month period totaled $71.49 million or $2.72 per share.  Universal has not yet filed its full financial report for the quarter ending September 2023, nonetheless it did disclose by press release that earnings before interest, taxes and non-cash amortization was $169.30 million, representing an EBITDA margin of 13.3%.  We note that level of profitability might be impressive compared to business in general, but it is significantly lower than the Company’s EBITDA margin was 16.1% in the same nine months in the previous year.  The previous fiscal year ending December 2022, the Company converted 10.59% of each sales dollar to operating cash flow and sales-to-cash conversion inched higher to 12.35% in the first six months of 2023.

 

Please register and subscribe to view more details in a 6-page report dated November 6, 2023, including our rating and price target fo ULH.

 

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