Q3 2020 Universal Logistics Holdings Inc Earnings Call
Hello, and welcome to Universal Logistics, Holding's third quarter Twentytwenty earnings Conference call. At this time, all all participants are in a listen only mode.
Brief question and answer session will follow the formal presentation [laughter]. During the course of this call management may make forward looking statements based on their best view of the business I've seen today statements that are forward looking relate to universal versus business objectives or expectations and can be identified by the use of the words.
Such as believe expect anticipate and project.
Such statements are subject to risks and uncertainties and actual results could differ materially from those expectations. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Mr., Tim Phillips, Chief Executive Officer, Mr., Jude Bearish, Chief Financial Officer, and Mr. Stephen Fitzpatrick.
Vice President of Finance and Investor Relations. Thank you Mr. Philips you may begin sir.
Good morning, and thank you for joining universal logistic Holdings' third quarter earnings call.
Before we begin I would like to thank the thousands of hard working men and women of universal for their continued attention to operating safely.
The filling the needs of our customers.
Because of your unselfish effort Universal continues to deliver real world solutions in a less than optimal environment.
Now for the quarter.
Universal had a great quarter, we saw strong rebound from the second quarter, increasing topline revenues over 40% and.
And more than doubling our earnings per share.
Yesterday's reported results included 2.5 million in losses at our company managed brokerage operation.
Cost of 70 basis points in operating margin and seven cents per share in the quarter.
The rest of her operations were firing on all cylinders led by our <unk> book, a robust rebound in automotive production.
Massive imports at record rates in our truckload ban operation.
We expect robust volumes to continue through mid November tapering off during the normal automotive holiday slowdowns around Thanksgiving and Christmas.
Based on what we're hearing from our customers 2021 should be a great year each of the service lines, particularly autos, where we remain bullish on light trucks and Sq V.
Jude walk their outlook for Q4, and the full year 2021 shortly.
For the third quarter, we reported 365 million in top line revenues and earnings of 50 cents per share which included the previously mentioned seven cents per share loss in company managed brokerage and a one cents per share losses are non cash holding losses are on our marketable securities portfolio.
We entered the third quarter was tempered optimism of a continued recovery of the U.S. economy.
And the rebound of associated freight volumes volumes walks in the second quarter shelter in place orders that plague many retail providers.
Each of our transportation service lines experienced substantial increase in freight volume as the quarter progressed we've.
We began to experience a tightening labor market over the same corresponding timeframe and believe this will be a challenge in the months to come out.
There is a definite shortage that both truck drivers warehouse men and women across the country. We do not believe this will go away anytime soon and are facing it head on were increasing pay rates across the country.
Offer some of the newest and most well maintained equipment in the industry we.
We believe this will give us a competitive advantage to attract retain the talent we need to further our success.
On the sales front, we continue to make inroads with our cross pollination of customers between service lines.
We've identified substantial opportunities, where we are providing supreme service to our customers, but are only conducting business with them in one of our service lines.
With an expanded collaborative effort between the sales group, we've identified multiple opportunities within each of our top customers.
Our value added in dedicated transportation service lines have continued to add to the 140 million in previously reported new business with 30 million in additional third quarter Awards.
The awards will area and over the next several quarters are.
Our transportation sector has experienced many opportunities brought about by the recent freight search.
Intermodal closed on 7 million 7 million of new National Drayage business, while experiencing a substantial increase in volumes within our existing customer base.
Our company managed brokerage operation is rebuilding over a quarter of its contractual business that is expiring in the fourth quarter.
The truckload agent group Onboarded 17, new agents in the third quarter, which should result in over $20 million of yearly truckload agent revenue.
Now for some color on each of the service line.
For intermodal, we experienced a 16.6 increase in loads over the second quarter as well as an 18.2% increase in loans over the same period last year.
Although volumes have increased rates are still lagging with the average revenue per load excluding fuel down 11% over the same period of 2019.
September saw Universal's intermodal group moved the most amount of load ever in their history.
This trend has continued in October as the average daily load has increased 8.7% from the third quarter average.
Any increase in rates will drive operating leverage in this business and further drive profitability.
We remain very bullish on our drayage franchise and will continue to expand our national footprint and seek additional M&A in this space.
The truckload group sell robust rates and volumes for both our agent and company terminals that support dry van however.
However, our flatbed business that supports metals and industrial growth good underperformed from the first quarter of this year revenue for metals and industrial goods was up 22.6% and 15.3% respectively.
As mentioned earlier in my comments, our company managed brokerage operation group had an extremely challenging quarter with load count down 7.8% over the same period and 19, we could not advanced the contracted rates with our customers quick enough.
The offset the rates from our partner carriers.
Although loads were down revenue per load was up 11.5% still.
Still leading the group and negative margin territory for much of the quarter.
Gross margin for the quarter finished in the low single digits.
This led to an operating ratio of 104.5% on quarterly revenues of 56.4%.
We have been profitable each week in October thus far and look for that trend to continue the remainder of the year.
Our largest opportunity remains with our company brokerage group for upcoming bids in Q4, and Q1 of 2021, we will remain disciplined with our pricing and maximize the increases that we work so hard to obtain in the third quarter.
The highlights of the third quarter was the automotive industry has returned to pre coated production numbers.
We are equally optimistic in the near term demand for Sq, Vsan trucks, which are value added services and dedicated sectors. So strongly support.
Dedicated load volumes increased 15.7% compared to the same period last year we.
We continue to layer with business wins into our existing dedicated a location.
That has allowed for the optimization of our dedicated asset.
[noise] dedicated to that business that three years ago was operating over 100% of revenues.
Now.
It has not only best in class management drivers and equipment, but best in class margins.
Our value added group successfully launched three new sites supporting class eight truck manufacturer and began operating in plant for heavy equipment manufacturer.
Launch costs were also a drag of about $1 million in Q3 weeks.
We expect about the same in Q4 as those operations ramp up to full production.
Our value added business supporting auto manufacturing Soleus, best result of the year and pent up demand and inventory restock as he is the sq vs and pickup trucks was at breakneck pace in the quarter.
Production volumes are expected to be solid in Q4, although the number of billable weeks will be down due to the upcoming holiday season.
The Saar for 2021 looks great returning to pre covert levels, we expect to have another banner year in our legacy business as well as reaping the rewards of our contract wins mentioned on previous call.
In closing our ultimate success will still depend on the health and performance of our associates.
We will remain acutely aware of COVID-19, the potential resurgence over the next few quarters.
We will ensure we are on point with our cobot response, and readiness plan as to support our associated and provide a safe work environment.
I would like to now turn the call over to June June. Thanks, Tim Good morning, everyone. Universal Logistics Holdings reported consolidated net income of 13.6 million or 50 cents per share on total operating revenues of 365 million in the third quarter of 2020. This compares to a net loss.
8.4 million or negative 30 cents per share on total operating revenues of $375.5 million in the third quarter of 2019.
To refresh everyone's memory Universal third quarter of 2019 result included pre tax charges of $27 million of litigation charges as well as an estimated 4 million dollar impact attributable to the U.S.W. strike against General Motors.
Consolidated income from operations was 22.1 million for the quarter compared to an operating loss of 7.4 million one year earlier, EBITDA increased 26.8 million to $38.5 million in the third quarter 2020, which compares to $11.6 million in the third quarter 2019.
Our operating margin and EBITDA margin for the third quarter of 2020, our 6% and 10.5% of total operating revenues these metrics compared to negative, 2% and positive 3.1% respectively in the third quarter of 2019.
Looking at our segment performance for the third quarter of 2020, and our transportation segment, which includes our truckload intermodal and freight brokerage businesses operating revenues for the quarter declined 6.7% to $237.1 million compared to 254.1 million in the same quarter last year.
Income from operations increased to 10.4 million compared to an operating loss of $17.2 million in the third quarter of 2019. The previously mentioned litigation charges in the third quarter of 2019 were attributable to our transportation segment.
As highlighted in our release and intense Tim's comments, the largest headwind for Universal transportation segment in the third quarter was our company managed brokerage operations, which operated at a loss of $2.5 million for the quarter on $56.4 million of topline revenue.
In our logistics segment, which is comprised of our value added services, including where we service the class eight heavy truck market and our dedicated transportation business income from operations increased 1.8 million to 11.6 million on 127.7 million of total operating revenues compared to operating income.
Of $9.8 million on $121 million of total operating revenue in the third quarter of 2019.
On our balance sheet, we held cash and cash equivalents totaling $8.7 million and $6.7 million of marketable securities.
Outstanding interest bearing debt net of $1.7 million of debt issuance costs totaled $466.6 million at the end of the period.
Excluding lease liabilities related to I guess, the 42, our interest bearing our net interest bearing debt to reported TTM EBITDA was 3.19 times Universal 12 month target total leverage ratio is between two and two and a half times EBITDA.
Capital expenditures for the quarter totaled 30.5 million and we have spent $72.9 million year to date, our forecasted capex for the full year are now expected to be in the $90 million to $100 million range as a number of our real estate projects will roll into 2021.
Interest expense for the year is expected to come in between 14 and $16 million yes.
If current if the current operating environment holds we expect fourth quarter topline revenues to be between 345 to 365 million and operating margins to be in the 6% to 7% range as Tim mentioned in his comments, we have less billable days in our value added dedicated transportation in Q4 than we did.
In Q3 due to the upcoming holiday season.
For the full year 2021, we are forecasting topline revenues between 1.6, and 1.7 billion and operating margins in the 7% to 9% range Capex for 2021 exclusive of any additional business wins and strategic real estate purchases will be in the $65 million to $75 million range.
And interest expense between 14 and $16 million.
Finally, we are excited to announce that on Wednesday, our board of directors reinstated Universal 10, and a half cent per share quarterly dividend. This quarters dividend is payable to shareholders of record at the close of business on December 7th 2012, and is expected to be paid on January four 2021.
With that we're ready to take some questions.
At this time I would like to remind everyone that if you would like to ask a question. Two question one on your telephone keypad now again Thats star one for any questions. We'll pause for just a moment to can tie all the acuity roster.
And your first question will come from Chris Wetherbee with Citi. Please go ahead.
Hey, Thanks, Good morning, guys good.
Morning, Chris.
So first maybe a bigger picture question just want to pick up on what you just mentioned there about 2021 the outlook, particularly the margin guidance, 7% to 9% can you talk a little bit about sort of what are the variables that could influence coming in at sort of the bottom end or maybe the high end of that range I'm, specifically I guess on me.
Sure I understand sort of the market dynamics that there's anything specific on the cost side that you think you can control to get those numbers up.
Yeah for sure I think Chris a couple of things first is that the wins that we've.
As mentioned on previous calls the 140 million plus the additional wins that we've received and Q3 are all in our higher margin businesses. So value add as Tim mentioned in his comments our dedicated as Tim mentioned in his comments was a real drag on our earnings three years ago, but now that is a operating within our car.
To get margin aspect.
Expectations of 10% to 12% as it is our value add business sold to more and more of that type of business that we bring on at those close to those historical margins will really help us drive profitability now that in conjunction with our.
M&A that we've done and the density that we've built in the intermodal franchise over the years.
Get the more volume that we push through that intermodal network will of course continue to drive that operating leverage that we see in that business. So imports.
Just get to a normal run rate and we see any type of improvement in rates, which are still down year over year, it's really going to put us in a good position to walk to hit that target margin range that we guided today.
Okay. Okay got it that's helpful.
So a couple of follow ups. There we had the 140 in terms of the new business wins did you give a specific number for the third quarter and is there any discussion around what the pipeline might look like for Fourq and beyond.
Yes, Chris this is Tim.
Yes, we we secured in the value added group $30 million of new third quarter wins, and what we expect to happen is that the layer in in the fourth quarter, there should be pretty close to an open yearly run rate on that we expect it to be somewhere in the neighborhood.
About a seven and a half million a quarter and we should be at full run rate by by the end of the fourth quarter into 2021 in those projects.
Okay, that's very helpful.
And then rate you mentioned, the intermodal side rate still being negative I guess I wanted to talk about a little bit intermodal rates as well as on the truckload side, how do we think that that kind of plays out as we move into next year, certainly seems like a strong outlook starting with truck in presumably intermodal follows but can you give us some of your thoughts around what you think rates could look like in 2021.
Yes, I would think that truckload rates.
Well they have kind of sky rocketed out of July into.
The fourth quarter were experiencing of course as everybody else is great spot rate I'm not sure. The customers mentality has come full circle, yet on contractual rate, but we are having some progress.
In seeing those rates at a higher level I don't know if I have the exact percentage guidance for next year, where we see the rates falling but we expect that as we go through these contracts and through bid season that we will see at least a mid single digit rate increase for 2001 and.
The 2021 on the truckload side I can't guarantee that on the flatbed open debt portion of our business because as I've mentioned in the comments that we're still seeing some lag in steel metals industrial goods.
That support that on the truckload side, so we're not I'm not quite as bullish on that.
The intermodal on the intermodal front I think that there was such a cavity.
That we saw not just entering into what.
In the states with the coated but but it had an effect that intermodal before that because of the Chinese shut down and.
And so weve had month, there that we had a kind of depressed state of volumes coming into the country, which which drove the rates down now we're seeing some rate escalation there. It just hasn't caught up as quick as as the truckload market. So we expect rates to continue to climb in the intermodal Mark.
We do think that we'll see better rates for build going into 21, but we're cautious on on what that's going to look like and the other thing that I think will play into our game plan is that we also want to be a volume player as Jude mentioned, we're going to want to make sure we're putting a higher.
On a velocity through the intermodal space.
So we can we can gain on that so I guess, what I'm, saying there is as rates go up we'll be cautious, but we also want to make sure that we're getting the volume push through the intermodal product.
Okay, Yeah, I know that certainly makes a lot of sense and I guess the last question for me.
I know you touched on this but just kind of coming back to the brokerage in the Trans transportation segment in terms of the profitability. There we've heard a lot of change in this business kind of across the industry over the course of the third quarter, just given what's happening with.
Spot rate environment is that something that can be balanced for fourq, you, where you can come back to profitability that you've talked a little bit about it but could you expand a bit more on your thoughts into next year.
Yes. This is Chris Chew that it's Chris So, yes, I think really more of a breakeven in Q4, I mean, we have a huge portion of our business in Q4, and Q1, that's really rebid, which will kind of stuff.
The table for 2021, so we're just really just trying to get that back to what breakeven renegotiate that the fact that we can in Q4 in Q1, and then come out at the end of Q1 early Q2 with the right customers and the right level of profitability for 2021, but it's still going to be a grind.
Okay got it I appreciate the color. This morning, thanks, guys. Thanks for.
The next question will come from Jeff Kauffman with loop capital markets. Please go ahead, hey, good morning, everybody. Congratulations good morning, John and Jeff. Thank you good morning.
So a couple of questions can you talk a little bit about the delays that you're seeing on the intermodal dray I know that's a complaint that a number of intermodal providers have been talking about and did that cause some.
Some revenue slippage in your opinion in intermodal this quarter and kind of what's the status of that as we head into Fourq.
Yes, Great question, Yes, we did like many others see.
See some delays associated with the high level.
Of import volume coming in from the international standpoint, as well as some of the congestion at the rail heads around the country on both international.
And domestic and yes. It did have an effect I mean, we only have a certain amount of trucks that we have in rotation, so where we run into these pinch points at port ports and rails and more so.
It's at the ports right now and specifically the West coast is under in a little bit of direct based on the large amount of import volumes coming in so where are we could plan on navigating a port and 45 minutes to an hour and a half we may have to plan now for being there from anywhere from one to five hours depending on.
Where the volumes, though would appear the volumes are coming at us. So we've lost a little bit of the productivity per truck.
And getting it to the customer and then on the other end of the spectrum of course with the large volumes coming into into the state the customers and the warehouses. There also being stress and thats, taking labor out of it right do I have enough labor to staff by facility. It's just the sheer volume.
And then I'll use the West Coast example, again in La and long Beach. That's further exasperated. The chat these that have to be used of course to move the containers, if they're sitting in a warehouse under a load then they're not available to go back into the port So theres some inefficiencies in the whole.
The whole intermodal.
For rail congestion, that's causing some maybe missed opportunities for revenue, but we know the freight still has to be moved at some point in sometime.
So we're looking forward to those continued high volumes.
So put differently, you're not getting as many loads per vehicle.
As you could be getting and I guess, you kind of answered the second half of that question, which is do those eventually come to you just slower or do you risk, losing those loads to other dray companies well.
Well theres always the risk of loss, but I think and much of our business.
We're able to we're able to work with the customers because as we don't have an infinite amount of trucks. Neither does the whole industry and we're seeing pinch points on that everywhere. So overall, Jeff the customers have been accommodating into working into our capacity and what we're able to bring them. This summer.
In the third ensure they may look for somebody else, but we don't think that theres going to be a deterioration in our revenue based on how many loads that we can pick up right now or our productivity as it said okay.
Okay. When I look at rail carloads that are released from the American Association of railroads, it's accelerating.
In the month of October can you give us an update on what you're seeing in your intermodal business and as these have these congestion issues alleviated at all are they getting worse.
Well when you say railcar loads for intermodal rail network.
You know I'm not so sure on that train speed that you that takes the train from Los Angeles to Chicago, but I do know that the trains are full and intermodal boxes were picking up whether they are domestic 50 threes or international 40 are coming in at a heavy volume so less in some of the major metropolitan areas.
The volumes are large and to navigate we're working the drayage end of it to navigate the rail terminal has taken a little longer now I don't have specific numbers, but I can tell you. This is nothing like it is in some of the ports on the west coast as far as getting in and getting out.
Okay, and then just two quick.
Operating expenses questions when I looked at the line numbers or were two lines that surprised me a little bit when.
When I looked at direct personnel it benefits it came in a little higher than I was looking for you saw revenues up 11% with personnel up 23% I was just wondering if there was anything unusual in there like a stay bonus or adding back expenses or something you mentioned the ramp up and the buildup you had on on some new.
Logistics business and then the depreciation line, which normally doesn't move a whole lot came in a little lower and I expect that I was just wondering what's going on there.
Yes for sure yes, no problem, Jeff So yes, a couple of things so on the on the wages, yes, it's definitely the wages are up because we're launching and have been launching customers on the value add and the dedicated side. So on one of our value add customers, we're launching with staff and we're not filling the customer yet so OCTG.
Caliber will be the first month that were billing on.
To apply against those wages. So those should get more in line at least on a percentage basis over the next couple of quarters.
And then secondly on the DNA line that was an adjustment that we had to our amortization, which related to our purchase accounting for road runner intermodal that we bought last year. So now that that now that that is.
Trued up.
The run rate on that should be consistent going forward okay.
Okay, great well, great idea, bringing the dividend back love seeing that and it looks like things are moving in the right direction. So congratulations thanks guys. Thanks, Jeff. Thank you.
The next question will come from Bruce Chen with Stifel. Please go ahead.
Hey, good morning, John So I appreciate the time just a couple of quick ones left here from me just wanted to focus on brokerage from minute.
Get the margin squeeze there that makes a lot of sense given what's going on.
But maybe a little bit surprised that the low decline and I'm wondering if that's business that you maybe active we fired or was that just difficulty sourcing capacity can you just give us some flavor around that dynamic.
Yes for sure and I guess I would start off with you know, we don't fire any of our customers, but we do work diligently with them to try to come up with a rate that works both for them moving their freight and sourcing that capacity can you kind of hit the nail on the head. We just we just took a very strategic.
Roche that we had to watch.
Some of the moves that we were we were taking because they were coming at large losses. So we work collaboratively with our customer and there was some lanes that we mutually agreed that potentially would be resource. So no. There is not a lack of work in the brokerage market right now there's just the level of this.
The plan that we're trying to maintain to get those margins back in line.
One further comment on that Bruce our tender acceptance in Q2 was over 80% are tender acceptance in Q3 was only 44. So if we would've except at those same number of low with our losses would have been about three to four times as large.
Got it okay I appreciate that color and then just.
Moving over to the logistics business real quick nice nice result, there you've been posting some nice wins and just thinking kind.
Kind of Big picture about the industry, we're seeing a lot of major changes in a lot of TV manufacturers rollout.
Are there any material opportunities there for universal.
Most definitely we think that we will be a player in that space and we're already engaged one of the one of the 10 launches.
That we haven't done stream or process right now involved.
And you know I think that we've gained a lot of experience with it over the last six months or so we'll continue to gain as we fully launch it and were definitely definitely prepared to capitalize on those opportunities moving forward.
Okay Awesome and then just last one here on the class eight side you'd mentioned in your prepared remarks that that business was.
It was a little bit slow, but as we kind of look at the class eight orders coming in in September and obviously, we'll see what happens in October here. It looks like things are starting to ramp.
What's your outlook for that business there.
So once again it was the cyclical was down about 40% year over year from.
19 to 20, and I think it's expected to go up 38% from two.
21 versus 20, so we basically right perfectly along with the cyclicality of the class eight so as our profitability or non profitability just basically moved directly with whatever those orders are so if orders are bigger in Q4, where they can get some more deliveries.
That will be great for our logistics franchise that supports class eight if not it will be it will be depressed as it has been in the past when they don't have their delivery targets.
Got it okay, well really appreciate the time. Thank you thanks for answers.
And once again, if you would like to ask a question. Please press star one again Thats star one for any questions over the phone line, we'll pause for just a moment.
Okay. We do have a question from Mike from you with Newland capital. Please go ahead.
Guys, how you doing Mike our reporting excellent excellent.
Just go over you've had some excellent wins and logistics just what the pipeline looks there new bids out there.
Can we expect any or are you hoping for any of the same size of wins. This year I'm sure they're not factored into the guide, but you know what's out there.
No, they're not they're not factored in because the sales process with some of those more complex operation that.
That we bid on is long, but we're pretty happy with what we do have in the pipeline not getting an exact dollar amount guidance. We know we have many opportunities out there that we feel you know better than 50% confident that we're we're in the running or maybe even in the final stages.
Of.
With the customer so excited about what we have in the pipeline and yeah. There are some there are a few of those out there that are is equally as opposed to enlarge as what we experienced.
With some of those ones we mentioned in prior calls so our expectation is that we are in that we are in the latter stages with a few of them were optimistic that we can move the ball forward and there are a couple that are larger that we would hope to be able to report on maybe within the next.
Couple of quarters that they come to fruition.
Excellent excellent okay.
Jude I guess just going through the you said for 2021.
I, just reiterate 1.6 to 1.7 and the 7% to 9% range, Yes, that's right. Mike. So that gets you to roughly a three dollar plus earnings number yes.
Yes, yes, yes, basically on the mid point to 75 at the low end Threeeighty two at the high 382 right. Okay.
Yes.
Desert numbers trading below $20 right now so that's my next question when when we're looking at acquisitions and you've done some fantastic.
Fantastic acquisitions over the past couple of years.
[music].
You know when you're thinking about we're trading at.
Yeah call It 767 times earnings and five and a half.
Six times EBITDA can you really find anything out there better than that yes. It's I know, we're looking to pay down debt, but there is a point where.
Instead of going to do acquisitions, you take the cash you just by some of the stock here at these levels. There is nothing that trades like this out there.
No. That's the exact calculus that actually we normally do so we look at those opportunities that we have but once again.
Our M&A is very very strategic we look for specific things. So we're just not out we're not just hunters and gatherers trying to buy a whole bunch of stuff that.
That doesnt make a lot of sense. So were looking for strategic acquisitions, and we always look at the stock and how its trading on an EBITDA EBITDA and if it's not if it's at a multiple that saw less than what we could buy a company and then of course, our stock looks attractive and of course in 2021 will definitely capex stock buyback at the firm.
One of our capital allocation, if the stock is trading at depressed levels.
Excellent Okay, and then when well I just wanted to go through so and then Capex you said 65 to 75 and 14 to 16 and interest yet for 2021 and that doesn't include if we win any of the value add opportunities that Tim just mentioned and of course, we're also in the market for strategic real estate and our large intermodal and truckload.
Market. So we'll just layer those in as we get them.
Yes, so at the midpoint I got it was like 330 or something like that on on that earnings that's great. Yeah Yep that's right.
Fantastic and thanks for reinstating the dividends Youre welcome. Thank you guys yeah. Thank you.
The next question is a follow up from Jeff Kauffman with loop capital markets. Please go ahead Sir.
This is great I get to follow one of the better sell side analysts out there.
Uh huh.
So you know something piqued my interest.
You were answering the question on the class eight ramp ups and you mentioned one of them is an electric vehicle.
Planned or story and I know, that's kind of a new budding area of class eight but I was just curious.
Are there different requirements on your logistics or value added operation for electric vehicles and is this something where you could develop a brand because every truck OEM I'm looking at seems to be moving toward either E V or hydrogen or some kind of hybrid as we move forward does this change your rig.
Firemen in the value added or is it pretty much the same thing you're just taking a different box in the plant.
No I think Jeff I think it's pretty much the same thing we're still doing many things with the parts, taking the parts that plan et cetera, and just to clarify on my statement there from a from an EPS standpoint, we havent navigated our way into the truck space, but we will work with.
Any any opportunity that comes through the pipeline and I think that the opportunity. We already are in works of launching.
It will give us some great detail. If there is anything out there that we need to further hone our skills sets on but at this point.
Our expertise.
In manufacturing error supplying the manufacturing of autos is still holding that holding true with the product.
Okay. That's all as a follow up thank you.
And at this time there are no further questions are there any closing comments.
Thank you. We appreciate you calling in to Universal logistics, holding <unk> third quarter earnings call and we look forward to talking to you again soon with either with even better news. Thank you.
Ladies and gentlemen, thank you for participating in today's conference call you may now disconnect.
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