Universal Logistics Holdings, Inc.: Form 10-Q for the period ended Apr 4, 2026

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events, future financial performance, anticipated demand for our services, expected operating results, future capital expenditures, liquidity, financing arrangements, market conditions, business strategies and other matters that are not historical facts. In some cases, forward-looking statements can be identified by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions.

These forward-looking statements are based on management’s current beliefs, expectations and assumptions regarding future events and are subject to risks, uncertainties and other factors, many of which are beyond our control. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include, among others, changes in freight demand, customer activity levels, automotive and industrial production, labor availability and costs, fuel prices, insurance costs, interest rates, capital expenditures, the availability of qualified owner-operators and drivers, the impact of inflationary pressures, the strength of the U.S. economy, the timing and success of cost reduction initiatives, changes in laws and regulations, cybersecurity risks, supply chain disruptions, and the other risks described in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025 and in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Overview

Universal Logistics Holdings, Inc. is a holding company whose subsidiaries provide customized transportation and logistics solutions throughout the United States and in Mexico and Canada. On May 1, 2025, we completed a reincorporation from Michigan to Nevada pursuant to a statutory conversion approved by our stockholders. Through our operating subsidiaries, we provide an integrated portfolio of transportation and logistics services designed to support customers throughout their supply chains, including value-added, dedicated, intermodal and trucking services.

Our operating subsidiaries provide a comprehensive suite of transportation and logistics solutions that allow our customers to reduce costs and manage their supply chains more efficiently. We market our services through a direct sales and marketing network focused on large customers in specific industry sectors, through company-managed facilities, and through a contract network of agents who solicit freight business directly from shippers. Our business model is designed to provide flexibility in managing purchased transportation, labor and equipment costs and to allow us to respond quickly to changes in customer demand and shipping volumes.

We generate substantially all of our revenues from fees charged to customers for transportation services and customized logistics solutions. We also derive revenue from fuel surcharges, where separately identifiable, loading and unloading activities, equipment detention, container management, storage and other related services.

Operations in our intermodal and trucking segments are generally associated with individual freight shipments coordinated by our agents and company-managed terminals. In contrast, our contract logistics segment provides value-added services and dedicated transportation solutions to specific customers, generally pursuant to contracts with terms of one year or longer. As a result, our contract logistics segment generally provides greater visibility into volumes and pricing, while our intermodal and trucking segments are more directly affected by spot market conditions, customer shipping patterns and general freight demand. Our segments are also distinguished by the extent to which we dedicate personnel, equipment and other resources to support customer-specific requirements.

During the first quarter of 2026, we continued to operate in a challenging environment in certain parts of our business, particularly in intermodal and certain industrial and automotive end markets. Freight demand remained uneven, customer activity levels remained below historical levels in certain markets, and elevated labor, insurance, equipment, maintenance and borrowing costs continued to pressure margins.

The following discussion of our 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 the Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 and the unaudited Consolidated Financial Statements and related notes included in this Quarterly Report on Form 10-Q.

Current Economic Conditions

We continue to operate in an uncertain macroeconomic environment. Freight demand remains uneven across many end markets, particularly in certain industrial, automotive and consumer-related sectors. Production levels and shipping volumes in certain automotive and heavy industrial markets have remained below historical levels, which has negatively affected demand for portions of our contract logistics, intermodal and trucking services.

In addition, we continue to experience elevated costs for labor, employee benefits, insurance, equipment, maintenance, fuel and interest expense. While we seek to mitigate these pressures through pricing initiatives, productivity improvements, cost controls and customer contract renewals, there can be no assurance that such actions will fully offset increased costs or reductions in shipping volumes.

New or increased tariffs on imported goods, trade restrictions, geopolitical instability, supply chain disruptions or other macroeconomic developments could adversely affect shipping volumes, customer demand and overall freight activity. These factors could negatively affect our revenues, profitability, cash flows and financial condition.

Despite these challenges, we believe that cash generated from operations, available cash balances and borrowing capacity under our revolving credit facility and other financing arrangements will be sufficient to fund working capital needs, planned capital expenditures and debt service requirements over the next twelve months. However, our future liquidity, financial condition and results of operations will depend on a number of factors beyond our control, including freight demand, customer shipping patterns, pricing, labor availability, interest rates and broader economic conditions.

Operating Revenues

For financial reporting purposes, we group our services into five primary categories: truckload, brokerage, intermodal, dedicated, and value-added logistics services. Truckload, brokerage and intermodal services are generally associated with individual freight shipments coordinated by our agents and company-managed terminals, while dedicated and value-added services are typically provided pursuant to customer-specific arrangements, generally under contracts with terms of one year or longer.

Truckload includes dry van, flatbed, heavy-haul and refrigerated transportation. Brokerage is provided through third-party transportation providers. Intermodal includes rail-truck, steamship-truck and related drayage support services. Dedicated consists generally of short-run or round-trip transportation services provided to specific customers within defined geographic areas. Value-added services include material handling, sequencing, warehousing, returnable container management, specialty project development and other customer-specific logistics solutions.

The following table sets forth operating revenues from each of these service categories for the thirteen weeks ended April 4, 2026 and March 29, 2025, expressed as a percentage of total operating revenues.

20

Results of Operations

The following table sets forth selected items derived from our consolidated statements of income for the thirteen weeks ended April 4, 2026 and March 29, 2025, expressed as a percentage of total operating revenues. The period-to-period discussion that follows should be read together with the table and focuses on the primary drivers of changes in revenues, operating expenses and profitability.

During the first quarter of 2026, lower freight demand, softer automotive production and continued cost pressures in labor adversely affected our operating margins.

(Dollars in millions)

Operating Revenues

Operating revenues decreased by $14.8 million, or 3.9%, to $367.6 million for the thirteen weeks ended April 4, 2026, from $382.4 million for the thirteen weeks ended March 29, 2025. The decrease was primarily attributable to lower freight demand in our intermodal and trucking segments, continued softness in certain industrial and automotive end markets, and lower fuel surcharge revenue. The decrease was partially offset by an increase in our contract logistics segment, primarily driven by an increase in our revenue from value-added programs.

Included in operating revenues for the thirteen weeks ended April 4, 2026, were separately identified fuel surcharges of $18.4 million, compared to $20.9 million in the prior year period.

Purchased Transportation and Equipment Rent

Purchased transportation and equipment rent generally increases or decreases in proportion to the revenues generated through owner-operators and third-party capacity providers. Purchased transportation and equipment rent was $60.7 million for the thirteen weeks ended April 4, 2026, compared to $79.7 million in the prior year period. The decrease was primarily attributable to lower transactional transportation volumes and a decrease in the mix of owner-operators versus employee drivers in certain intermodal operations.

Direct Personnel and Related Benefits

Direct personnel and related benefits expense was $176.2 million for the thirteen weeks ended April 4, 2026, compared to $164.5 million in the prior year period. Trends in direct personnel and related benefits are generally correlated with operating facility requirements, headcount levels and labor utilization in our contract logistics segment, including value-added services and dedicated transportation, as well as the use of employee drivers in certain intermodal operations. The increase in the current year period was primarily attributable to certain new contract logistics programs.

Operating Supplies and Expenses

Operating supplies and expenses include items such as fuel, maintenance, utilities, communications, equipment repairs, cost of materials and other operating costs. Operating supplies and expenses were $48.3 million for the thirteen weeks ended April 4, 2026, compared to $51.3 million in the prior year period. The decrease was primarily attributable to a decrease in maintenance and professional fees.

Commission Expense

Commission expense was $4.2 million for the thirteen weeks ended April 4, 2026, compared to $4.3 million in the prior year period. The change was primarily attributable to decreases in revenue generated through our agent-based trucking operations.

Occupancy Expense

Occupancy expense was $15.6 million for the thirteen weeks ended April 4, 2026, compared to $11.3 million in the prior year period. The change was primarily attributable to additional properties being leased.

General and Administrative Expense

General and administrative expense was $14.6 million for the thirteen weeks ended April 4, 2026, compared to $13.2 million in the prior year period. The change was primarily attributable to increases in salaries, wages and benefits.

Insurance and Claims Expense

Insurance and claims expense was $7.6 million for the thirteen weeks ended April 4, 2026, compared to $7.0 million in the prior year period. The change was primarily attributable to an increase in auto liability insurance premiums and claims expense.

Depreciation and Amortization

Depreciation and amortization expense was $35.6 million for the thirteen weeks ended April 4, 2026, compared to $35.5 million in the prior year period. Depreciation expense increased $2.8 million and amortization expense decreased $2.7 million. The increase in depreciation expense is primarily attributable to incremental fixed asset additions. The decrease in amortization is due to the previous impairment of certain customer-relationship intangible assets in our intermodal segment in the third quarter of 2025.

Interest Expense, Net

Net interest expense was $9.7 million for the thirteen weeks ended April 4, 2026, compared to $8.2 million in the prior year period. The change reflects increases in average borrowings outstanding as well as an increase in average interest rates on our outstanding borrowings. As of April 4, 2026, total outstanding borrowings were approximately $754.7 million, compared to $740.0 million as of March 29, 2025.

Other Non-Operating Income

Other non-operating income was $0.3 million for the thirteen weeks ended April 4, 2026, compared to $0.6 million in the prior year period. The decrease can be attributed to a decrease in dividends and gains on marketable equity securities.

Income Tax (Benefit) Expense

During the thirteen weeks ended April 4, 2026, we had an income tax benefit of $(1.1) million, compared to income tax expense of $2.0 million in the prior year period. The change is primarily attributed to a decrease in pre-tax income. Our effective income tax rate was 24.2% for the thirteen weeks ended April 4, 2026, compared to 25.1% in the prior year period.

Segment Financial Results

We report our financial results in three reportable segments: contract logistics, intermodal and trucking. This presentation reflects the manner in which management evaluates the business, including the economic characteristics and operating performance of each segment. The following tables summarize information about our reportable segments for the thirteen weeks ended April 4, 2026 and March 29, 2025 (in thousands):

Contract Logistics

Operating revenues in our contract logistics segment were $269.5 million for the thirteen weeks ended April 4, 2026, compared to $255.9 million in the prior year period. The change was primarily attributable to certain new value-added programs and increases in certain existing value-added program volumes. Included in contract logistics segment revenues for the thirteen weeks ended April 4, 2026, were separately identified fuel surcharges from dedicated transportation services of $7.9 million, compared to $8.6 million in the prior year period.

Income from operations in the contract logistics segment was $17.5 million for the thirteen weeks ended April 4, 2026, compared to $23.9 million in the prior year period. Operating margin in the contract logistics segment was 6.5% for the current year period, compared to 9.3% in the prior year period. The change in operating margin was primarily attributable to an increase in labor costs.

Intermodal

Operating revenues in our intermodal segment were $47.9 million for the thirteen weeks ended April 4, 2026, compared to $70.7 million in the prior year period. The change was primarily attributable to decreases in load volumes and average operating revenue per load. Included in intermodal segment revenues for the thirteen weeks ended April 4, 2026, were separately identified fuel surcharges of $5.4 million, compared to $8.2 million in the prior year period. Intermodal segment revenues also included detention, demurrage and storage charges of $7.2 million, compared to $8.1 million in the prior year period.

The loss from operations in the intermodal segment was $(13.1) million for the thirteen weeks ended April 4, 2026, compared to $(10.7) million in the prior year period. Operating margin in the intermodal segment was (27.4)% for the current year period, compared to (15.1)% in the prior year period.

Trucking

Operating revenues in our trucking segment were $50.2 million for the thirteen weeks ended April 4, 2026, compared to $55.6 million in the prior year period. The change was primarily attributable to decreases in load volumes and average operating revenue per load. Included in trucking segment revenues for the thirteen weeks ended April 4, 2026, were brokerage revenues of $16.2 million, compared to $18.0 million in the prior year period, and separately identified fuel surcharges of $3.6 million, compared to $3.5 million in the prior year period.

Income from operations in the trucking segment was $0.6 million for the thirteen weeks ended April 4, 2026, compared to $2.2 million in the prior year period. Operating margin in the trucking segment was 1.1% for the current year period, compared to 3.9% in the prior year period.

Liquidity and Capital Resources

Our primary uses of cash are working capital requirements, capital expenditures, debt service, dividend payments, share repurchases and acquisitions. Working capital requirements are generally driven by customer payment terms, payroll, fuel costs, insurance costs, purchased transportation costs and other operating expenses.

As of April 4, 2026, we had cash and cash equivalents of approximately $17.9 million and approximately $286.1 million of availability under our revolving credit facility. Total outstanding borrowings were approximately $754.7 million, including borrowings under our revolving credit facility, equipment financing arrangements, a term loan facility secured by real estate and approximately $189.4 million of CTL financing.

Although we were in compliance with all financial covenants as of April 4, 2026, our credit agreements require ongoing monitoring of leverage ratios, fixed charge coverage ratios, minimum liquidity levels and other financial covenants. Given the continued pressure on earnings from uneven freight demand, elevated interest rates and higher labor, insurance and maintenance costs, we continue to actively monitor covenant compliance, liquidity and borrowing capacity.

We believe that cash generated from operations, together with available borrowings under our revolving credit facility and other financing arrangements, will be sufficient to fund our working capital needs, planned capital expenditures, debt service obligations and dividend payments for at least the next twelve months.

Capital Expenditures

Capital expenditures were $9.6 million for the thirteen weeks ended April 4, 2026. Capital expenditures primarily consisted of investments in transportation equipment, terminal facilities and expenditures in support of value-added programs.

For the remainder of 2026, we currently expect capital expenditures to be approximately $75.0 million. Actual spending may vary based on customer demand, equipment availability, pricing, timing of value-added opportunities, market conditions and liquidity considerations.

Discussion of Cash Flows

Net cash provided by operating activities was $33.4 million for the thirteen weeks ended April 4, 2026. Net cash provided by investing activities was $2.0 million and primarily reflected the proceeds from the sales of marketable securities and equipment, which was partially offset by capital expenditures. Net cash used in financing activities was $50.4 million and primarily reflected net borrowings, equipment financing activity, dividend payments and other financing transactions.

Off-Balance Sheet Arrangements

As of April 4, 2026, we had no off-balance sheet arrangements that have had, or are reasonably likely to have, a material current or future effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

A summary of our critical accounting policies is presented in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies,” included in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our critical accounting policies during the thirteen weeks ended April 4, 2026.

Seasonality

Our value-added logistics services experience seasonal demand patterns driven by automotive production schedules, customer shutdown periods and model changeovers. Transportation services are also affected by weather patterns, holiday shipping schedules and changes in customer production levels.

There were no material changes in the Company’s exposure to market risk during the thirteen weeks ended April 4, 2026. The Company remains exposed to market risk associated with changes in interest rates, fuel prices, insurance costs and foreign currency exchange rates. For additional information regarding the Company’s exposure to market risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of April 4, 2026. Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

As previously disclosed in Part II, Item 9A, “Controls and Procedures,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, management identified a material weakness in the Company’s internal control over financial reporting related to deficiencies in controls over complex accounting analyses and estimates, including goodwill impairment analyses, the review of reporting unit carrying values and significant assumptions used in valuation models, and the availability of sufficient technical accounting resources to address significant non-routine transactions and related financial statement disclosures.

As a result of this material weakness, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of April 4, 2026.

The material weakness resulted in a material misstatement of the Company’s previously issued interim financial statements for the period ended September 27, 2025. The Company corrected that misstatement by filing Amendment No. 1 to its Quarterly Report on Form 10-Q/A on March 9, 2026. Management has concluded that the material weakness did not result in a material misstatement of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q; however, until remediated, the material weakness could result in a material misstatement of the Company’s annual or interim financial statements that may not be prevented or detected in a timely manner.

Notwithstanding the identified material weakness, management believes the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, the Company’s financial position, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles.

Remediation Activities

Management, with oversight from the Audit Committee of the Board of Directors, continues to implement measures designed to remediate the material weakness described above. During the quarter ended April 4, 2026, the Company continued to enhance its internal control environment through the following actions:

• Expanding internal accounting and financial reporting resources, including personnel with technical accounting expertise;
• increasing the use of third-party technical accounting, tax, valuation and internal control specialists, as appropriate;
• enhancing quarterly review controls over goodwill impairment analyses, reporting unit carrying values and significant assumptions used in valuation models;
• formalizing documentation standards and review procedures for significant estimates, judgments and non-routine transactions;
• strengthening controls over the review and approval of journal entries, account reconciliations, financial statement preparation and SEC disclosures;
• implementing additional controls designed to validate deferred tax balances, reporting unit carrying values and other inputs used in impairment testing; and
• enhancing Audit Committee oversight over complex accounting matters, remediation activities and internal control progress.

The Company is also in the process of further enhancing its internal control framework and documentation procedures in connection with the continued engagement of external internal control consultants. Although management believes these remediation activities will strengthen the Company’s internal control over financial reporting, the material weakness will not be considered remediated until the applicable controls have been fully implemented, have operated for a sufficient period of time and management has concluded, through testing, that the controls are operating effectively.

Changes in Internal Control over Financial Reporting

Except for the remediation measures described above, there were no changes in the Company’s internal control over financial reporting during the quarter ended April 4, 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Management recognizes that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving its objectives. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected.

There have been no material changes to our risk factors as previously disclosed in Item 1A to Part 1 of our Form 10-K for the fiscal year ended December 31, 2025.