Q2 2024 Universal Logistics Holdings Inc Earnings Call

Operator: Hello and welcome to Universal Logistics Holdings' second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Operator: Hello and welcome to Universal Logistics Holdings' second quarter 2024 earnings conference call. At this time, all participants are in a listen or lay mode. Should you need assistance, to signal a conference specialist by pressing star followed by zero?

Speaker Change: Hello and welcome to Universal Logistics Holdings second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star followed by zero.

Operator: Should you need assistance, please signal a conference specialist by pressing the star followed by zero. A brief question and answer session will follow the formal presentation. During the course of this call, management may make forward-looking statements based on their best view of the business as seen today. Statements that are forward-looking relate to Universal's 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.

Operator: A brief question-and-answer session will follow the formal presentation. During the course of this call, management may make forward-looking statements based on their best view of the business as seen today. Statements that are forward-looking relate to Universal's business objectives or expectations and can be identified by the use of the words such as belief, expect, anticipate, and project. Such statements are subject to risks and uncertainties, and actual results could differ materially from those expectations.

Speaker Change: A brief question and answer session will follow the formal presentation. During the course of this call, management may make forward-looking statements based on their best view of the business as seen today.

Speaker Change: Statements that are forward-looking relate to universal 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 risk and uncertainties and actual results could differ materially from those expectations.

Operator: As a reminder, this conference is being recorded.

Operator: 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 Beres, Chief Financial Officer, and Mr. Stephen Fitzpatrick, Vice President of Finance and Investor Relations. Thank you. Mr. Phillips, you may begin.

Operator: It is now my pleasure to introduce your host, Mr. Tim Phillips, Chief Executive Officer; Mr. Jude Beres, Chief Financial Officer; and Mr. Steven Fitzpatrick, Vice President of Finance and Investor Relations. Thank you.

Speaker Change: As a reminder, this conference is being recorded.

Speaker Change: It is now my pleasure to introduce your host, Mr. Tim Phillips, Chief Executive Officer, Mr. Jude Beres, Chief Financial Officer, and Mr. Stephen Fitzpatrick, Vice President of Finance and Investor Relations. Thank you. Mr. Phillips, you may begin.

Tim Phillips: Mr. Phillips, you may begin. Thank you, Ludy.

Tim Phillips: Thank you, Ludi. Good morning, everyone.

Tim Phillips: Good morning, everyone. Thank you for joining Universal's 2024 second quarter earnings call. Once again, the theme of the quarter can be summed up in four words. Diversity is our strength. Universal's diversity service offerings are what differentiates us from our competitors in the transportation and logistics space. And is what allows us to deliver outstanding results even during this prolonged transportation downcycle.

Tim Phillips: Thank you for joining Universal's 2024 second quarter earnings call. Once again, the theme of the quarter can be summed up in four words. Diversity is our strength. Universal's diversity of service offerings is what differentiates us from our competitors in the transportation and logistics industry and is what allows us to deliver outstanding results even during this prolonged transportation down cycle. But before I get into the results, I would also like to take the moment to thank the entire Universal team.

Tim Phillips: Thank you, Ludi. Good morning, everyone.

Speaker Change: Thank you for joining Universal's 2024 Second Quarter Earnings Call.

Speaker Change: Once again, the theme of the quarter can be summed up in four words, diversity is our strength. Universal's diversity service offerings are what differentiates us from our competitors in the transportation and logistics space.

Speaker Change: and is what allows us to deliver outstanding results even during this prolonged transportation down cycle.

Tim Phillips: But before I dig into the results, I would also like to take the moment to thank the entire Universal Team. The tremendous work and effort of our 10,000-plus employees and contractors are what make these results possible. This is what allows us to deliver outstanding service to our customers and continue to be the best-of-breed transportation and logistics provider.

Speaker Change: But before I dig into the results, I would also like to take a moment to thank the entire Universal team. The tremendous work and effort of our 10,000-plus employees and contractors are what make these results possible. Thank you. Thank you. Thank you.

Tim Phillips: The tremendous work and effort of our 10,000-plus employees and contractors are what make these results possible. This is what allows us to deliver outstanding service to our customers and continue to be the best of great transportation and logistics providers. Now, let's move on to the quarter.

Speaker Change: This is what allows us to deliver outstanding service to our customers and continue to be the best of breed transportation and logistics provider.

Tim Phillips: Now, let's move on to the quarter. Overall, Universal once again delivered outstanding results in the second quarter of 2024. We grew top-line revenue by 12 percent, delivered double-digit operating margins, increased our earnings per share by 30 percent compared to the same period last year. We did all this during one of the longest and deepest freight recessions I've experienced.

Tim Phillips: Overall, Universal once again delivered outstanding results in the second quarter of 2024. We increased top-line revenue by 12%, delivered double-digit operating margin, and increased our earnings per share by 30% compared to the same period last year. We did all this during one of the longest and deepest freight recessions I've experienced.

Speaker Change: Now let's move on to the quarter. Overall, Universal once again delivered outstanding results in the second quarter of 2024.

Speaker Change: We grouped top-line revenue by 12%, delivered double-digit operating margin, and increased our earnings per share by 30% compared to the same period last year. We did all this during one of the longest and deepest freight recessions I've experienced.

Tim Phillips: Universal's second quarter results, however, were mixed and varied considerably amongst our different business segments. Our contract logistics business continues to outperform and deliver excellent results, while our intermodal and company-managed brokerage segments continue to perform below our expectations. The trucking segment performed well despite softness and the overall truckload market on the back of our specialized heavy haul wind business. Q2 was another challenging environment to navigate in the transportation market.

Tim Phillips: Universal's second quarter results, however, were mixed and varied considerably amongst our different business segments. Our contract logistics business continues to outperform and deliver excellent results, while our intermodal and company-managed brokerage segments continue to perform below our expectations. The trucking segment performed well despite softness in the overall truckload market on the back of our specialized heavy haul wind vehicles. Q2 is another challenging environment to navigate in the transportation market. However, Universal's diversified business model is working as designed, and I'm very happy with the outcome.

Speaker Change: Universal's second quarter results, however, were mixed and varied considerably amongst our different business segments.

Speaker Change: Our contract logistics business continues to outperform and deliver excellent results while our intermodal and company-managed brokerage segments continue to perform below our expectations.

Speaker Change: The trucking segment performed well despite softness in the overall truckload market on the back of our specialized heavy haul wind business.

Tim Phillips: However, Universal's diversified business model is working as designed, and I'm very happy with the outcome. For the second quarter, 2024, Universal reported 462.2 million of revenue, $1.17 of earnings per share, and an operating margin of 10.2 percent. This was the second best revenue, earnings per share, and operating margin for the second quarter in Universal's TISC. Industry. In our contract logistics segment, revenues increase 26.2% to 263.6 million. This was largely due to our previously announced specialty development program. At the end of Q2 2024, Universal managed 68 value added programs unchanged from Q2 2023. Contract logistics remains our most consistent and profitable segment.

Tim Phillips: For the second quarter of 2024, Universal reported $462.2 million of revenue, $1.17 of earnings per share, and an operating margin of 10.2%. This was the second best revenue, earnings per share, and operating margin for the second quarter in Universal's history.

Speaker Change: For the second quarter 2024, Universal reported $462.2 million of revenue, $1.17 of earnings per share, and an operating margin of 10.2%.

Speaker Change: This was the second best revenue, earnings per share, and operating margin for the second quarter in Universal's history.

Tim Phillips: In our contract logistics segment, revenues increased 26.2% to $263.6 million. This was largely due to our previously announced specialty development program. At the end of Q2 2024, Universal managed 68 value-added programs, unchanged from Q2 2023. Contract Logistics remains our most consistent and profitable segment. This was the 10th straight quarter of operating ratios below 90%, with six of the last 10 below 85%, and the last two were below 80%.

Speaker Change: In our contract logistics segment, revenues increased 26.2% to $263.6 million.

Speaker Change: This was largely due to our previously announced specialty development program. At the end of Q2 2024, Universal managed 68 value-added programs, unchanged from Q2 2023.

Speaker Change: Contract Logistics remains our most consistent and profitable segment. This was the 10th straight quarter of operating ratios below 90%, with 6 of the last 10 below 85%, and the last 2 were below 80%.

Tim Phillips: This was at its 10th straight quarter of offering ratios below 90%, with six of the last 10 below 85%, and the last two were below 80%.

Tim Phillips: We expect the strengthening segments to continue going forward. The outlook for the automotive industry remains positive with the SAR for June at 15.3 million and 15.9 million expected for the four year 2024. As a landscape for a transition to electric vehicles continues to evolve, we are staying closely in tune with the needs of our customers. As customers demand to drive their production forecast, remain well positioned to support their inbound logistics needs for both EV and ICE platforms. Class aid production also remains stable with a large backlog of expected builds for the four year 2024.

Tim Phillips: We expect the strength in this segment to continue going forward. The outlook for the automotive industry remains positive, with the SAR for June at $15.3 million and $15.9 million expected for the full year 2024. As the landscape for a transition to electric vehicles continues to evolve, we will stay closely in tune with the needs of our customers. As customers demand to drive their production forecast, we remain well-positioned to support their inbound logistics needs for both EV and ICE platforms. Class A production also remains stable, with a large backlog of expected builds for the full year 2024.

Speaker Change: We expect the strength in this segment to continue going forward. The outlook for automotive industry remains positive with the SAR for June at $15.3 million and $15.9 million expected for the full year 2024.

Speaker Change: As the landscape for a transition to electric vehicles continues to evolve, we will stay closely in tune with the needs of our customers.

Speaker Change: As customers' demands drive their production forecast, we remain well-positioned to support their inbound logistic needs for both EV and ICE platforms.

Speaker Change: Class A production also remains stable with a large backlog of expected builds for the full year 2024.

Tim Phillips: Overall, our trucking segment is also doing quite well given the depressed transportation backdrop. Trucking segment revenues increased 12.6% to $91.4 million. This was due to a 28.5% increase in revenue per load, excluding fuel surcharges, while loads hauled decreased 11.1%. Trucking segment results were bolstered by an uptick in our specialized heavy haul wind turbine business. We expect this to continue throughout the rest of the year as we have a full pipeline. This should be a secular headwind for years to come, allowing solid trucking segment performance sheltered from fluctuations in broader truckload markets.

Tim Phillips: Overall, our trucking segment is also doing quite well given the depressed transportation backdrop. Trucking segment revenues increase 12.6% to 91.4 million. This was due to a 28.5% increase in revenue for loads, excluding fuel surcharge as well. Load haul decreased 11.1%. Trucking segment results were bolstered by an uptick in our specialized heavy haul wind business. We expect this to continue throughout the rest of the year as we have a full pipeline. This should be a secular headwind for years to come, allowing solid trucking segment performance sheltered from fluctuations in the broader truckload market. Outside of specialized freight, the truckload market remains soft.

Speaker Change: Overall, our trucking segment is also doing quite well given the depressed transportation backdrop.

Speaker Change: Trucking segment revenues increased 12.6% to $91.4 million. This was due to a 28.5% increase in revenue per load, excluding fuel surcharges, while loads hauled decreased 11.1%.

Speaker Change: Trucking segment results were bolstered by an uptick in our specialized heavy haul wind business.

Speaker Change: We expect this to continue throughout the rest of the year as we have a full pipeline. This should be a secular headwind for years to come, allowing solid trucking segment performance sheltered from fluctuations in broader truckload markets.

Tim Phillips: Outside of specialized freight, the truckload market remains soft. Flatbed volumes were down once again, and we did not see the increase in rates that we expected. We expect the weakness in the broader truckload market to persist until excess capacity comes out. The intermodal segment continues to face significant headwinds.

Speaker Change: Outside of specialized freight, the truckload market remains soft.

Tim Phillips: Flatbed volumes were down once again, and we did not see the increase in rates that we expected.

Speaker Change: Flatbed volumes were down once again and we did not see the increase in rates that we expected.

Tim Phillips: We expect the weakness in the broader truckload market to persist until excess capacity comes out.

Speaker Change: We expect the weakness in the broader truckload market to persist until excess capacity comes out.

Tim Phillips: The intermodal segment continues to face significant headwinds. In the intermodal segment, revenues decrease 14.8% to 78.1 million in the second quarter of 2024. Compared to Q2-2023, our intermodal segment experienced a 4.1% decrease in volume, while rates decrease 5.9%. Additionally, at the sorial charges decrease 5.4 million and fuel surcharge revenue decrease 2.7 million.

Speaker Change: The intermodal segment continued to face significant headwinds. In the intermodal segment, revenues decreased 14.8 percent to $78.1 million in the second quarter of 2024.

Tim Phillips: In the intermodal segment, revenues decreased 14.8% to $78.1 million in the second quarter of 2020. Compared to Q2 2023, our intermodal segment experienced a 4.1% decrease in volume, while rates decreased 5.9%. Additionally, assessorial charges decreased $5.4 million, and fuel surcharge revenue decreased $2.7 million.

Speaker Change: Compared to Q2 2023, our intermodal segment experienced a 4.1% decrease in volume, while rates decreased 5.9%.

Speaker Change: Additionally, assessorial charges decreased $5.4 million and fuel surcharge revenue decreased $2.7 million.

Tim Phillips: While it is too soon to say if we have turned the corner, we have seen some improvement in reasons for optimism. Our intermodal segment had its best results for the year in the final month of Q2, showing our cost-cutting measures are getting to bear fruit, and we are seeing our highest truck productivity in several quarters. We could see a strong second half of 2024, if 2025 volumes get pulled forward and in case of anticipation of higher tariffs on import. There could be additional pull forward to get ahead of any labor disputes at the East Coast ports.

Tim Phillips: While it is too soon to say if we have turned the corner, we have seen some improvement and reasons for optimism. Our intermodal segment had its best results for the year in the final month of Q2, showing our cost-cutting measures are beginning to bear fruit, and we are seeing our highest truck productivity in several quarters. We could see a strong second half of 2024 if 2025 volumes get pulled forward in anticipation of higher tariffs on imports. Additionally, there could be additional pull forward to get ahead of any labor disputes at the East Coast port.

Speaker Change: While it is too soon to say if we have turned the corner, we have seen some improvement and reasons for optimism.

Speaker Change: Our intermodal segment had its best results for the year in the final month of Q2, showing our cost-cutting majors are beginning to bear fruit and we are seeing our highest productivity in several quarters.

Speaker Change: We could see a strong second half of 2024 if 2025 volumes get pulled forward in anticipation of higher tariffs on imports.

Speaker Change: There could be additional pull forward to get ahead of any labor disputes at the East Coast ports.

Tim Phillips: Any increase in volumes will contribute to our profitability after streamlining the business and cutting costs. Our Southern California operations are ready for whatever the market throws at us in the back half of the year.

Tim Phillips: Any increase in volumes will contribute to our profitability. After streamlining the business and cutting costs, our Southern California operations are ready for whatever the market throws at us in the back half of the year. As far as rates go, we expect to see an increase in spot rates as we get into peak season later in the year. The company-managed brokerage segment also continues to underperform. Revenues decreased 4.9%, to $28.1 million, and the business continues to struggle to meet our profitability expectations. The revenue decline was primarily due to a 21.9% decrease in revenue per load, which was partially offset by a 20.1% increase in load count.

Speaker Change: Any increase in volumes will contribute to our profitability after streamlining the business and cutting costs, our Southern California operations are ready for whatever the market throws at us in the back half of the year.

Tim Phillips: As far as race go, we expect to see an increase in spot rates as we get into peak season later in the year.

Speaker Change: As far as rates go, we expect to see an increase in spot rates as we get into peak season later in the year.

Tim Phillips: The company-managed brokerage segment also continues to underperform. Revenue's decrease is 4.9% to 28.1 million, and the business continues to struggle to meet our profitability expectations. The revenue decline was primarily due to a 21.9% decrease in revenue per load, which was partially offset by a 20.1% increase in load count. Over capacity continues to put a damper on pricing and squeeze our gross margins. We were able to take some share back in the quarter but had the stack of price margins to do so.

Speaker Change: The company-managed brokerage segment also continues to underperform. Revenues decreased 4.9 percent to $28.1 million, and the business continues to struggle to meet our profitability expectations.

Speaker Change: The revenue decline was primarily due to a 21.9% decrease in revenue per load, which was partially offset by a 20.1% increase in load count.

Tim Phillips: Overcapacity continues to put a damper on pricing and squeeze our gross margin. We were able to take some share back in the quarter, but we had to sacrifice margins to do so. The brokerage market is extremely challenging, and some experts do not expect it to recover until these excess capacities come out of the market sometime in 2026. As a result, we are taking a proactive approach to evaluating the brokerage, looking to right-size the business as soon as possible, and looking to cut costs where possible to improve efficiencies and return to profitability.

Speaker Change: Overcapacity continues to put a damper on pricing and squeeze our gross margins.

Speaker Change: We were able to take some share back in the quarter, but had to sacrifice margins to do so.

Tim Phillips: The brokerage market is extremely challenging; some experts do not expect it to recover until these excess capacities come out of the market sometime in 2026. As a result, we are taking a proactive approach in evaluating the brokerage business, looking to right size of the business as soon as possible and look to cut costs where possible to improve efficiencies and return to profitability.

Speaker Change: The brokerage market is extremely challenging and some experts do not expect it to recover until these excess capacities come out of the market sometime in 2026.

Speaker Change: As a result, we are taking a proactive approach in evaluating the brokerage business, looking to right-size the business as soon as possible, and look to cut costs where possible to improve efficiencies and return to profitability.

Tim Phillips: M&A remains a key part of our strategy with the objective of penetrating new markets, gaining new customers, or densitizing and existing markets. We were constantly looking for acquisition targets that would be a good fit for Universal while also staying disciplined. A quality target must offer within our core competencies, add to our existing service lines, fit within our target margins, and must be available at a reasonable multiple. Any addition to the portfolio that must be accrued to earnings and large enough to move the needle.

Tim Phillips: M&A remains a key part of our strategy with the objective of penetrating new markets, gaining new customers, or densitizing an existing market. We're constantly looking for acquisition targets that would be a good fit for Universal while also staying disciplined. A quality target must operate within our core competencies, add to our existing service lines, fit within our target margin, and must be available at a reasonable multiple. Additionally, any addition to the portfolio must be accretive to earnings and large enough to move the needle.

Speaker Change: M&A remains a key part of our strategy with the objective of penetrating new markets, gaining new customers, or densitizing an existing market. We're constantly looking for acquisition targets that would be a good fit for Universal while also staying disciplined.

Speaker Change: A quality target must operate within our core competencies, add to our existing service lines, fit within our target margins, and must be available at a reasonable multiple.

Speaker Change: Any addition to the portfolio must be accretive to earnings and large enough to move the needle. We are beginning to see more opportunities becoming available and will continue to seek acquisition targets that can be added, that can be added value to Universal.

Tim Phillips: We are beginning to see more opportunities becoming available and will continue to seek acquisition targets that can add value to the universal.

Tim Phillips: We are beginning to see more opportunities becoming available and will continue to seek acquisition targets that can be added value to Universal. As we look ahead, we are encouraged by a robust sales pipeline brimming with opportunities. Specifically, value-added and dedicated opportunities alone account for nearly $750 million. This strong pipeline enables us to be selective, ensuring that we only bid on programs aligned with our core competencies and desired margin profile.

Tim Phillips: As we look ahead, we are encouraged by a robust sales pipeline bringing with opportunity. Specifically, value added and dedicated opportunities alone account for nearly 750 million. This strong pipeline enables us to be selective, ensuring that we only bid on programs aligned with our core competencies and desired margin profiles. Additionally, we are constantly exploring cross-selling opportunities with our existing customers, aiming to deliver more value through diverse service offerings. Our contract logistics segment serves a wide variety of industries beyond OEMs, including aerospace, defense, agriculture, heavy truck, consumer manufacturing, and e-commerce. We continue to discover new and exciting opportunities within these sectors.

Speaker Change: As we look ahead, we are encouraged by a robust sales pipeline brimming with opportunities. Specifically, value-added and dedicated opportunities alone account for nearly $750 million.

Speaker Change: This strong pipeline enables us to be selective, ensuring that we only bid on programs aligned with our core competencies and desired margin profiles.

Tim Phillips: Additionally, we are constantly exploring cross-selling opportunities with our existing customers, aiming to deliver more value through diverse service options. Our contract logistics segment serves a wide variety of industries beyond auto OEMs, including aerospace, Defense, Agriculture, Heavy Truck, Consumer Manufacturing, and E-Commerce.

Speaker Change: Additionally, we are constantly exploring cross-selling opportunities with our existing customers, aiming to deliver more value through diverse service offerings.

Speaker Change: Our contract logistics segment serves a wide variety of industries beyond auto OEMs, including aerospace, defense, agriculture, heavy truck, consumer manufacturing, and e-commerce.

Tim Phillips: We continue to discover new and exciting opportunities within these sectors. I'm extremely pleased with our performance in the second quarter of 2024. Universal continues to provide the resiliency and durability of our diverse model in any environment. Once again, I would like to thank all of Universal's stakeholders for their contributions. I remain optimistic about the rest of 2024 and confident about our future. I would now like to turn over to Jude to provide more color on our financials and expectations for the upcoming quarter. Jude? Thanks, Tim. Good morning, everyone!

Speaker Change: We continue to discover new and exciting opportunities within these sectors.

Tim Phillips: I'm extremely pleased with our performance in the second quarter of 2024. The universal continues to provide the resiliency and durability of our diverse model in any environment.

Speaker Change: I'm extremely pleased with our performance in the second quarter of 2024. Universal continues to provide the resiliency and durability of our diverse model in any environment. Once again, I would like to thank all of Universal's stakeholders for their contributions.

Tim Phillips: Once again, I would like to thank all of the universal stakeholders for their contribution. I remain optimistic for the rest of 2024 and confident about our future.

Speaker Change: I remain optimistic for the rest of 2024 and confident about our future.

Tim Phillips: I would now like to turn over to Jude to provide more color on our financials and expectations for the upcoming quarter.

Speaker Change: I would now like to turn over to Jude to provide more color on our financials and expectations for the upcoming quarter. Jude?

Jude Beres: Jude, thanks, Tim.

Jude Marcus Beres: Good morning, everyone. Yesterday, Universal Logistics Holdings reported consolidated net income of $30.7 million, or $1.17 per share, on total operating revenues of $462.2 million for the second quarter of 2024. This compares to net income of $23.6 million, or $0.90 per share, on total operating revenues of $412.6 million during the same period last year. Consolidated income from operations was $47.1 million for the quarter, compared to $36.4 million one year earlier. EBITDA increased $29 million to $84.8 million, which compares to $55.8 million during the same period last year.

Jude Beres: Good morning, everyone. Yesterday, Universal Logistics Holdings reported consolidated net income of $30.7 million, or $1.17 per share, on total operating revenues of $462.2 million in the second quarter of 2024. This compares to net income of $23.6 million or $0.90 per share on total operating revenues of $412.6 million during the same period last year. Consolidated income from operations was $47.1 million for the quarter compared to $36.4 million one year earlier. EBITDA increased $29 million to $84.8 million, which compares to $55.8 million during the same period last year. Our operating margin and EBITDA margin for the second quarter of 2024 are 10.2% and 18.4% of total operating revenues.

Jude: Thanks Tim. Good morning everyone. Yesterday, Universal Logistics Holdings reported consolidated net income of $30.7 million, or $1.17 per share, on total operating revenues of $462.2 million in the second quarter of 2024.

Jude: This compares to net income of $23.6 million or $0.90 per share on total operating revenues of $412.6 million during the same period last year.

Jude: Consolidated income from operations was $47.1 million for the quarter compared to $36.4 million one year earlier.

Jude: EBITDA increased $29 million to $84.8 million, which compares to $55.8 million during the same period last year.

Jude Marcus Beres: Our operating margin and EBITDA margin for the second quarter of 2024 are 10.2% and 18.4% of total operating revenue, respectively. These metrics compare to 8.8% and 13.5%, respectively, in the second quarter of 2023. During the quarter, Universal took an $11.3 million charge for depreciation expense. This charge was due to revisions made to the useful lives and salvage values of certain pieces of equipment, primarily Class VIII tractors. Prior to COVID, it was not uncommon for four to five-year-old tractors to retain a 40 to 50 percent salvage value when sold on either the open market or traded in for new models. Now, after the extreme bubble experienced in used truck prices during COVID, we have seen a massive unwind in the value of used tractors.

Jude: Our operating margin and EBITDA margin for the second quarter of 2024 are 10.2% and 18.4% of total operating revenues. These metrics compare to 8.8% and 13.5% respectively in the second quarter of 2023.

Jude Beres: These metrics compare to 8.8% and 13.5%, respectively, in the second quarter of 2023. During the quarter, Universal took an $11.3 million charge depreciation expense. This charge was due to revisions made to the useful lives and salvage values of certain pieces of equipment, primarily class 8 tractors. Prior to COVID, it was not uncommon for fortified-year-old tractors to retain a 40% to 50% salvage value when sold on either the open market or traded in for new models. Now, after the extreme bubble experienced in the used truck prices during COVID, we have seen a massive unwind in the value of used tractors.

Jude: During the quarter, Universal took an $11.3 million charge depreciation expense. This charge was due to revisions made to the useful lives and salvage values of certain pieces of equipment, primarily Class VIII tractors.

Jude: Prior to COVID, it was not uncommon for 4- to 5-year-old tractors to retain a 40- to 50-percent salvage value when sold on either the open market or traded in for new models.

Jude: Now, after the extreme bubble experienced in the used truck prices during COVID, we have seen a massive unwind in the value of used tractors. We are now seeing residual values fall to 20 to 25 percent of historical costs.

Jude Beres: We are now seeing residual values fall to 20 to 25% of historical costs. This update to the estimated residual values on certain tractors resulted in the additional depreciation expense impacting our operating ratio by 245 basis points. Looking at our segment performance for the second quarter of 2024, in our contract logistics segment, which includes our value add and dedicated transportation businesses, income from operations increased, 20.1 million to 52.9 million on 236.6 million of total operating revenues. This compares to operating income of 32.8 million on 208.8 million of total operating revenue in the second quarter of 2023.

Jude Marcus Beres: We are now seeing residual values fall to 20 to 25 percent of historical costs. This update to the estimated residual values on certain tractors resulted in the additional depreciation expense impacting our operating ratio by 245 basis points. Looking at our segment performance for the second quarter of 2024, in our contract logistics segment, which includes our value-added and dedicated transportation businesses, income from operations increased $20.1 million to $52.9 million on $236.6 million of total operating revenue.

Jude: This update to the estimated residual values on certain tractors resulted in the additional depreciation expense impacting our operating ratio by 245 basis points.

Jude: Looking at our segment performance for the second quarter of 2024, in our contract logistics segment, which includes our value-add and dedicated transportation businesses, income from operations increased $20.1 million to $52.9 million on $236.6 million of total operating revenues.

Jude Marcus Beres: This compares to operating income of $32.8 million on $208.8 million of total operating revenue in the second quarter of 2023. Operating margins for the quarter were 20.1% of total operating revenues compared to 15.7% one year earlier. We continue to make excellent progress on our specialty development contract logistics program.

Jude: This compares to operating income of $32.8 million on $208.8 million of total operating revenue in the second quarter of 2023.

Jude Beres: Operating margins for the quarter were 20.1% of total operating revenues, compared to 15.7% one year earlier. We continue to make excellent progress on our specialty development contract logistics program. During the second quarter of 2024, we recognize an additional 44.6 million of operating revenues related to this program. This brings our year-to-date total operating revenues on this program to 139.8 million. As a reminder, during the full year 2024, we expect to recognize total operating revenues on this program of approximately 228 million and continue to expect this program to be substantially complete by January 1st of 2025. Revenue generated from this program are reported in the Value Added Services line and the associated cost in Operating Supplies and Expense.

Jude: Operating margins for the quarter were 20.1% of total operating revenues compared to 15.7% one year earlier.

Jude: We continue to make excellent progress on our Specialty Development Contract Logistics Program.

Jude Marcus Beres: During the second quarter of 2024, we recognized an additional $44.6 million of operating revenues related to this program. This brings our year-to-date total operating revenues on this program to $139.8 million. As a reminder, during the full year 2024, we expect to recognize total operating revenues on this program of approximately $228 million and continue to expect this program to be substantially complete by January 1st, 2025. Revenues generated from this program are reported in the value-added services line and the associated costs in operating supplies and expenses.

Jude: During the second quarter of 2024, we recognized an additional $44.6 million of operating revenues related to this program. This brings our year-to-date total operating revenues on this program to $139.8 million.

Jude: As a reminder, during the full year 2024, we expect to recognize total operating revenues on this program of approximately $228 million and continue to expect this program to be substantially complete by January 1st of 2025.

Jude: Revenues generated from this program are reported in the value-added services line and the associated costs in operating supplies and expense. The results of this program are included in our contract logistics segment.

Jude Marcus Beres: The results of this program are included in our contract logistics segment. Based on its current cycle, we expect this program to generate additional revenues in the range of $14 to $50 million during the third and fourth quarters of 2024. Our guidance, which I will discuss momentarily, reflects the expected impact of this program during the third quarter.

Jude Beres: The results of this program are included in our contract logistics segment. Based on its current cadence, we expect this program to generate additional revenues in the range of 40 to 50 million during the third and fourth quarters of 2024. Our guidance that I will discuss momentarily reflects the expected impact of this program during the third quarter. Onto our intermodal segment, operating revenues decreased 13.5 million to 78.1 million compared to 91.6 million in the same period last year. And income from operations decreased 8.1 million to an operating loss of 8.3 million. This compares to an operating loss of 200,000 in the second quarter of 2023.

Jude: Based on its current cadence, we expect this program to generate additional revenues in the range of $14 to $50 million during the third and fourth quarters of 2024. Our guidance, that I will discuss momentarily, reflects the expected impact of this program during the third quarter.

Jude Marcus Beres: On the intermodal segment, operating revenues decreased $13.5 million to $78.1 million compared to $91.6 million in the same period last year, and income from operations decreased $8.1 million to an operating loss of $8.3 million. This compares to an operating loss of $200,000 in the second quarter of 2023. Operating ratios for the quarter were 110.6% versus 100.3% last year. In our trucking segment, operating revenues for the quarter increased $10.2 million to $91.4 million, compared to $81.2 million in the same quarter last year, and income from operations remained flat at $4.4 million during both quarters of 2024 and 2023.

Jude: Onto our intermodal segment, operating revenues decreased $13.5 million to $78.1 million compared to $91.6 million in the same period last year. And income from operations decreased $8.1 million to an operating loss of $8.3 million.

Jude: This compares to an operating loss of $200,000 in the second quarter of 2023. Operating ratios for the quarter were 110.6% versus 100.3% last year.

Jude Beres: Operating ratios for the quarter were 110.6 percent versus 100.3 percent last year. In our trucking segment, operating revenues for the quarter increased 10.2 million to 91.4 million compared to 81.2 million in the same quarter last year. And income from operations remained flat at 4.4 million during both quarters of 2024 and 2023. Operating margins for the quarter were 4.8% versus 5.4% last year. In our company managed brokerage segment, operating revenues for the quarter decreased 1.5 million to 28.1 million compared to 29.6 million in the same quarter last year. And income from operations decreased 1.5 million to an operating loss of 2.2 million.

Jude: In our trucking segment, operating revenues for the quarter increased $10.2 million to $91.4 million compared to $81.2 million in the same quarter last year. Ending come from operations remained flat at $4.4 million during both quarters of 2024 and 2023.

Jude Marcus Beres: Operating margins for the quarter were 4.8 percent versus 5.4 percent last year. In our Company Managed Brokerage segment, operating revenues for the quarter decreased $1.5 million to $28.1 million, compared to $29.6 million in the same quarter last year, and income from operations decreased $1.5 million to an operating loss of $2.2 million. This compares to an operating loss of $800,000 in the second quarter of 2023. Additionally, our company-managed brokerage segment reported an operating ratio of 107.9% compared to 102.7% in the second quarter of last year.

Jude: Operating margins for the quarter were 4.8 versus 5.4 percent last year.

Jude: In our company managed brokerage segment, operating revenues for the quarter decreased $1.5 million to $28.1 million, compared to $29.6 million in the same quarter last year, and income from operations decreased $1.5 million to an operating loss of $2.2 million.

Jude Beres: This compares to an operating loss of 800,000 in the second quarter of 2023. Our company managed brokerage segment reported an operating ratio of 107.9 percent compared to 102.7 in the second quarter last year. On our balance sheet, we held cash and cash equivalents totaling 7.5 million and 11.6 million of marketable securities. Outstanding interest bearing debt net of 4 million of debt issuance costs totaled 483.8 million at the end of the period. Excluding lease liabilities related to ASD842, net interest bearing debt to reported TTM EBITDA was 1.65 times. Capital expenditures for the quarter totaled 77.1 million.

Jude: This compares to an operating loss of $800,000 in the second quarter of 2023. Our company managed brokerage segment reported an operating ratio of 107.9% compared to 102.7% in the second quarter last year.

Jude Marcus Beres: On our balance sheet, we held cash and cash equivalents totaling $7.5 million and $11.6 million of marketable securities. outstanding interest-bearing debt, net of $4 million of debt issuance costs, totaled $483.8 million at the end of the period. Excluding LACE liabilities related to ASD 842, our net interest-bearing debt to reported TTM EBITDA was 1.65 times. Capital expenditures for the quarter totaled $77.1 million. For the full year, we are expecting capital expenditures to be in the $315 to $330 million range and interest expense to come in between $30 and $32 million.

Jude: On our balance sheet, we held cash and cash equivalents totaling $7.5 million and $11.6 million of marketable securities.

Jude: Outstanding interest-bearing debt, net, of $4 million of debt issuance costs, totaled $483.8 million at the end of the period. Excluding LACE liabilities related to ASD 842, our net interest-bearing debt to reported TTM EBITDA was 1.65 times.

Jude Beres: For the full year, we are expecting capital expenditures to be in the 315 to 330 million dollar range and interest expense to come in between 30 and 32 million dollars. Based on the current operating environment and the expected cadence of the new contract logistics program mentioned earlier.

Jude: Capital expenditures for the quarter totaled $77.1 million.

Jude: For the full year, we are expecting capital expenditures to be in the $315 to $330 million range, and interest expense to come in between $30 and $32 million.

Jude Marcus Beres: Based on the current operating environment and the expected cadence of the new contract logistics program mentioned earlier, for the third quarter of 2024, we are expecting top-line revenues between $450 million and $475 million and margins in the 9 to 11 percent range. Finally, on Wednesday, our Board of Directors declared Universal's $0.105 per share regular quarterly dividend. This quarter's dividend is payable to shareholders of record at the close of business on September 2, 2024, and is expected to be paid on October 1, 2024. With that, Ludi, we're ready to take some questions.

Jude: Based on the current operating environment and the expected cadence of the new contract logistics program mentioned earlier, for the third quarter of 2024, we are expecting top-line revenues between $450 and $475 million and margins in the 9 to 11 percent range.

Jude Beres: For the third quarter of 2024, we are expecting top line revenues between 450 and 475 million and margins in the 9 to 11 percent range.

Jude Beres: Finally, Wednesday, our Board of Directors declared a universal 10.5 percent per share regular quarterly dividend. This quarter's dividend is payable to shareholders of record at the close of business on September 2, 2024, and is expected to be paid on October 1, 2024.

Jude: Finally, Wednesday, our Board of Directors declared Universal's $0.105 per share regular quarterly dividend. This quarter's dividend is payable to shareholders of record at the close of business on September 2, 2024, and is expected to be paid on October 1, 2024.

Operator: With that, Loody, we're ready to take some questions. Thank you, and ladies and gentlemen, we will now begin the question-and-answer session. If you would like to ask a question, please press the star 1 on your telephone keypad to raise your hand and join the queue. If you're using a speaker phone, please pick up your handset before pressing any keys. If you would like to withdraw your question, simply press the star 2. Again, please press the star 1 to join the queue. One moment, please, for your first question.

Speaker Change: With that, Ludi, we're ready to take some questions.

Operator: Thank you, and ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you are using a speakerphone, please pick up your handset before pressing any keys. If you would like to withdraw your question, simply press star 2. Again, please press star 1 to join the queue. One moment, please, for your first question. And your first question comes from the line of Bruce Chan with Steeple, please go ahead.

Ludi: Thank you, and ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you are using a speakerphone, please pick up your handset before pressing any keys. If you would like to withdraw your question, simply press star 2.

Ludi: Again, please press star 1 to join the queue. One moment please for your first question.

Bruce Chan: And your first question comes from the line of Bruce Chan with Steve Ols. Please go ahead. Hey, good morning, and thanks as always. Maybe just to start here with contract logistics, you showed some really nice growth in that division even, you know, these strip out the special project business, but it does look like programs are down from, I think, 71 quarter of a quarter to 68. Is there anything to read from that? Or was that just kind of the normal cadence of contracts rolling off? Now, that's just the normal cadence of contracts rolling off in this particular situation.

Speaker Change: And your first question comes from the line of Bruce Chan with Steeple. Please go ahead.

Jizong Chan: Hey, good morning. And thanks, as always.

Jizong Chan: Good morning and thanks as always. Maybe just to start here with contract logistics, you showed some really nice growth in that division, even if you strip out the special project business, but it does look like programs are down from

Speaker Change: I think 71 quarter over quarter to 68. Is there anything to read from that or was that just kind of the normal cadence of contracts rolling off?

Jizong Chan: Maybe just to start here with contract logistics, you showed some really nice growth in that division, even, you know, these strip out the special project business, but it does look like programs are down from, I think, 71 a quarter of a quarter to 68. Is there anything to read from that? Or was that just kind of the normal cadence of contracts rolling off?

Tim Phillips: Now, that's just the normal cadence of contracts rolling off. In this particular situation, we had some end-of-life agreements that were moved out, and we continue to move new opportunities in to replace those, and as the pipeline continues to fill, we have the hope and the opportunity that we'll continue to build on the 68 that we exited Q2 with.

Speaker Change: Now, that's just the normal cadence of contracts rolling off in this particular situation.

Bruce Chan: We had some end of life agreements and that were moved out, and we continue to move new opportunities in to replace those. And as the pipeline continues to fill, we have the hope and the opportunity will continue to build on the 68 that we exited on Q2 with. Okay, that's good to hear, and I think you said it was 600 to 750 million of pipeline opportunity. You know, just kind of wondering, you know, given the software backdrop, if you expect any changes and maybe the rate of conversion of that pipeline or any, you know, maybe elongation in the in the sales cycle or, you know, are customers still kind of just making decisions is normal.

Speaker Change: We had some end-of-life agreements that were moved out, and we continue to move new opportunities in to replace those, and as the pipeline continues to fill, we have the hope and the opportunity that we'll continue to build on the 68 that we exited on Q2 with.

Tim Phillips: Okay, that's good to hear. And I think you said it was like 600 to 750 million in pipeline opportunity. You know, just kind of wondering, you know, given the softer backdrop, if, you know, you expect any changes in maybe the rate of conversion of that pipeline or any, you know, maybe elongation in the sales cycle, or, you know, our customers still kind of just making decisions as normal.

Speaker Change: Okay that's good to hear and I think you said it was like 600 to 750 million of pipeline opportunity. You know just kind of wondering you know given the softer backdrop if

Speaker Change: You know, you expect any changes in maybe the rate of conversion of that pipeline or any, you know, maybe elongation in the in the sales cycle or, you know, our customers still kind of just making decisions as normal.

Tim Phillips: So far, customers are making decisions as normal if I debundle the transportation from the four walls type of activity in contract logistics. There's been more pressure put on the transportation sector as we look to advance a new bid or even renew bids, so we're cautiously optimistic as we work our way through that. There's still been a level of consistency on the value-added services bid, and we still see a full pipeline.

Bruce Chan: So far, customers are making decisions as normal if I if I debundled the transportation from the four walls type of activity in the contract logistics. There's been more pressure put on the transportation sector as we look to advance in new bid or even renew bid, so we're cautiously optimistic as we work our way through that. There's still been a level of consistency on the value added services bid, and we still see a full pipeline. You know, the determining factor on that will be, you know, as corporations look at their internal costs for employees, do we provide a logical solution and outsourced solution for those companies?

Speaker Change: So far customers are making decisions as normal if I if I debundle the transportation from the four walls type

Speaker Change: of Activity in the Contract Logistics.

Speaker Change: There's been more pressure put on the transportation sector as we look to advance in new bids or even renew bids, so we're cautiously optimistic as we work our way through that. There's still been a level of consistency on the value-added services bid.

Tim Phillips: The determining factor in that will be, as corporations look at their internal costs for employees, do we provide a logical solution, an outsourced solution for those companies? I think we do, but we have to sort through that. That does take a little bit of time from a sales cycle standpoint as the company's management structure makes sure they look at their P's and Q's. However, once again, I'm cautiously optimistic that we'll continue to see additional outsourcing opportunities.

Speaker Change: and we still see a full pipeline, the determining factor on that will be as corporations look at their internal costs for employees, do we provide a logical solution, an outsourced solution for those companies.

Bruce Chan: I think we do, but you know, we have to sort through that. That does take a little bit of time from a sales cycle standpoint as the company's management structure makes sure they look at their fees and queues. But once again, I'm cautiously optimistic that we'll continue to see additional outsourcing opportunities. Okay, that's great. That's good to hear.

Speaker Change: I think we do, but, you know, we have to sort through that. That does take a little bit of time from a sales cycle standpoint as the company's management structure makes sure they look at their P's and Q's. But, once again, I'm cautiously optimistic that we'll continue to see additional outsourcing opportunities.

Jizong Chan: Okay, that's great. That's good to hear.

Bruce Chan: And then you talked about residual values on used trucks falling, and that was a big factor in the depreciation revision. Seems like that is maybe a healthy indication of capacity exiting the market, but I'm also wondering on the flip side of that raises, you know, maybe any concerns about what class aid activity might look like as we move into 2025 and beyond and just kind of how you're thinking about that. Yeah, for sure. I just think, Bruce, that I think all companies in the space just have to be really smarter about what these residual values are going to be in a post-COVID environment.

Jude Marcus Beres: And then, Jude, you know, you talked about residual values on used trucks falling, and, you know, that was a big factor in the, you know, depreciation revision. Seems like that is, you know, maybe a healthy indication of capacity exiting the market, but I'm also wondering, on the flip side, if that raises, you know, maybe any concerns about what Class 8 activity might look like as we move into 2025 and beyond and just kind of how you're thinking about that. Yeah, for sure.

Speaker Change: That's great. That's good to hear. And then, Jude, you know, you talked about residual values on used trucks falling and that was a

Jude: a big factor in the depreciation revision.

Jude: It seems like that is...

Jude: you know, maybe a healthy indication of capacity exiting the market, but I'm also wondering on the flip side if that raises, you know, maybe any concerns about what Class 8 activity might look like as we, you know, move into 2025 and beyond and just kind of how you're thinking about that.

Jude Marcus Beres: I just think, Bruce, that all companies in the space just have to be really smarter about what these residual values are going to be in a post-COVID environment. I mean, there seems to be a glut of trucks on the market, and you can see from the ACT numbers that orders were down markedly sequentially from Q1 to Q2, coupling that with really, really soft residuals. So, yeah, I think there's going to be some concern.

Jude: Yeah, for sure. I just think, Bruce, that I think all companies in the space just have to be really smarter about what these residual values are going to be in a post-COVID environment. I mean, there seems to be a glut of trucks.

Bruce Chan: I mean, there seems to be a lot of trucks on the market. And you can see from the, you know, the ACT numbers that, you know, orders were down markedly sequentially from, you know, Q1 to Q2, coupling that with really, really soft residuals. Yeah, I think there's going to be some concern. We really haven't seen a decline in prices of the class aid trucks, though, which would be a great indication for us that, hey, there is the OEMs are recognizing some form of oversupply. We expect that to happen, but we really haven't seen it yet.

Speaker Change: on the market, and you can see from the, you know, the ACT numbers that, you know, orders were down markedly sequentially from, you know, Q1 to Q2, coupling that with really, really soft residuals, yeah, I think there's going to be some concern. We really haven't seen a decline in prices.

Jude Marcus Beres: We really haven't seen a decline in prices for Class A trucks, though, which would be a great indication for us that, hey, there is, the OEMs are recognizing some form of oversupply. We expect that to happen, but we really haven't seen it yet. So, Universal, once again, we're just trying to manage our own balance sheet and our own assets, and when we see a pretty large delta between what the expectation was and what the reality is, we're just reacting to it.

Speaker Change: of the Class A trucks though, which would be a great indication for us that, hey, there is, the OEMs are recognizing some form of oversupply. We expect that to happen, but we really haven't seen it yet. So, Universal, once again, we're just trying to manage our own balance sheet and our own assets.

Bruce Chan: So universal once again, we're just trying to manage our own balance sheet and our own assets. And that when we see, you know, a pretty large delta between what the expectation was and what the reality is, we're just reacting. to it. Okay, that's great.

Speaker Change: And when we see, you know, a pretty large delta between what the expectation was and what the reality is, we're just reacting to it.

Bruce Chan: And then just switching gears here a little bit to intermodal. You know, we've seen some good inbound volumes to the West Coast ports. Maybe if you could just walk us through, you know, kind of this disparity between those numbers and then what you're seeing in terms of, you know, load volumes and, you know, wondering if that's maybe just a delay between those volumes showing up in your network or if there's some other reason why, you know, maybe you wouldn't be seeing that uplift. Yeah, the inbound into the West Coast is up. I wouldn't say that from the customer base that we're moving freight four right now in the West Coast, we have experienced that type of double-digit uptick.

Jude Marcus Beres: Okay, that's great. And then, just switching gears here a little bit to intermodal, we've seen some good inbound volumes to the West Coast ports. Maybe you could just walk us through kind of this disparity between those numbers and then what you're seeing in terms of load volumes, and wondering if that's maybe just a delay between those volumes showing up on your network or if there's some other reason why maybe you wouldn't be seeing that uplift.

Speaker Change: Okay, that's great. And then just switching gears here a little bit to intermodal, you know, we've seen some good inbound volumes to the West Coast ports.

Speaker Change: Maybe if you could just walk us through, you know, kind of this disparity between those numbers and then what you're seeing in terms of, you know, load volumes and, you know, wondering if that's maybe just a delay between those volumes showing up in your network or if there's some other reason why, you know, maybe you wouldn't be seeing that uplift.

Tim Phillips: Yeah, the inbound into the West Coast is up. But I wouldn't say that from the customer base that we're moving freight for right now on the West Coast, we have experienced that type of double-digit uptick. And as we look as the freight moves inland into the Midwest and other parts of the country, we would expect to see some uplift from that. And I would say that if I had to have one market that I've seen some uptick based on those West Coast numbers, it would be the inbound coming off the West Coast into Chicago.

Speaker Change: Yeah, the inbound into the West Coast is, uh, I wouldn't say that from the customer base that we're moving freight for right now in the West Coast, we have experienced that type of

Bruce Chan: And as we look as the freight moves itself inland into the Midwest and other parts of the country, we would expect to see some uplift from that. And I would say that if I had to have one market that I've seen some uptick based on those West Coast numbers, it would be the inbound coming off the West Coast into Chicago. So we have seen some uptick there. The other markets are harder to read, but we would think that an uptick in West Coast imports should filter into the inland parts of the United States. And to that point, we mentioned that, you know, the month of June was one of our best months from an intermodal standpoint.

Speaker Change: Double digit uptick.

Speaker Change: And as we look as the freight moves itself inland into the Midwest and other parts of the country, we would expect to see some uplift from that. And I would say that if I had to have one market that I've seen some uptick.

Speaker Change: Based on those West Coast numbers would be the inbound coming off the West Coast into Chicago. So we have seen some uptick there. The other markets are harder to read, but we would think...

Tim Phillips: So we have seen some uptick there. The other markets are harder to read, but we would think that an uptick in West Coast imports should filter into the inland parts of the United States. And to that point, we mentioned that, you know, the month of June was one of our best months from an intermodal standpoint. So that's somewhat reflective of those inbound volumes. And if we strip out California from those numbers, I thought we had a fairly decent June as a whole, other than California on the intermodal front.

Speaker Change: that an uptick in West Coast imports should filter into the inland parts of the United States.

Speaker Change: And to that point, we mentioned that, you know, the

Speaker Change: Month of June was one of our best months from an intermodal standpoint, so that's somewhat reflective of that inbound volume. And if we strip out California...

Bruce Chan: So that's somewhat reflective of that inbound, inbound volumes. And if we strip out California from those numbers, I thought we had a fairly decent June as a whole other than California on the intermodal front. Yeah, Bruce, and just to give a little bit more color to Tim's comments on the legacy non-California business, June had our largest load counts for the entire year. And although California was filled down sequentially, it was down less than 600 loads for the quarter. So we are seeing a little bit of a repair to those volumes. But once again, we're just really cautiously optimistic because there's still a lot of carriers that are taking freight at below-market prices.

Speaker Change: From those numbers, I thought we had a fairly decent June as a whole, other than California on the intermodal front.

Tim Phillips: I've got Bruce, and just to give a little bit more color to Tim's comments on the legacy non-California business, June had our largest load counts for the entire year, and although California was still down sequentially, it was down less than 600 loads for the quarter. So we are seeing a little bit of a repair to those volumes, but once again, we're just really cautiously optimistic because there's still a lot of carriers that are taking freight at below market prices. That's a great color.

Speaker Change: Yeah, Bruce, and just to give a little bit more color to Tim's comments on the legacy non-California business.

Jizong Chan: June had our largest load counts.

Jizong Chan: for the entire year, and although California was still down sequentially, it was down less than 600 loads for the quarter, so we are seeing a little bit of a repair to those volumes, but once again, we're just really cautiously optimistic because there's still a lot of carriers that are taking freight at below market prices.

Bruce Chan: Got it. That's great color.

Jizong Chan: And then just the last question here is a kind of point of clarification. You know, Tim, you talked about trucking, and you're certainly seeing some very nice increases there in revenue and revenue per load, which you attributed to the specialized heavy haul. But you said that, you know, you were expecting that to be a secular headwind in subsequent years.

Bruce Chan: And then just the last question here is a kind of point of clarification. Tim, you talked about trucking, and you're certainly seeing some very nice increases there in revenue and revenue promote, which you attributed to the specialized heavy haul. You said that you know, you were expecting that to be a secular headwind in subsequent years. I just want to make sure I heard that correctly. Well, sometimes I get coming and going confused. That should be a good tale. Okay, all right, I just wanted to clarify that point. Okay, that's all I have. I really appreciate the time, as always.

Speaker Change: Tim, you talked about trucking and you're certainly seeing some very nice increases there in revenue and revenue per load.

Speaker Change: which you attributed to the specialized Hebby Hall. You said that you were expecting that to be a secular headwind in subsequent years. I just want to make sure I heard that correctly.

Tim Phillips: Well, sometimes I get coming and going confused. That should be a good deal. Okay, alright.

Speaker Change: Well, sometimes I get coming and going confused.

Speaker Change: That should be a good deal. Okay. All right. Yeah, that's what I thought. That makes sense.

Jizong Chan: Okay, I just wanted to clarify that point. Okay, great. That's all I have.

Speaker Change: Okay, I just wanted to clarify that point. Okay, great. That's all I have. Really appreciate the time, as always. Congratulations. Hey, thanks, Beres. We appreciate it.

Bruce Chan: Congratulations. Hey, thanks, Bruce. I appreciate it. Thank you.

Jizong Chan: I really appreciate the time, as always. Congratulations. Hey, thanks, Beres. We appreciate it.

Operator: Thank you. And once again, if you would like to ask a question, please press star 1. And there are no further questions at this time. I would like to turn it back to Mr. Phillips for closing remarks.

Operator: And once again, if you would like to ask a question, these presses are one.

Operator: And there are no further questions at this time.

Tim Phillips: I would like to turn it back to Mr. Phyllis for closing remarks. Thank you, Loody. Universal continues to employ various cost-cutting strategies while advancing our various opportunities and key segments in vertical. I'm pleased with our Continuous Improvement Plan, which encompasses our human assets, the use of technology, and the focus on the customer's needs and visibility.

Speaker Change: And there are no further questions at this time. I would like to turn it back to Mr. Phillips for closing remarks.

Tim Phillips: Thank you, Ludi. Universal continues to employ various cost-cutting strategies while advancing our various opportunities and key segments in vertical. I'm pleased with our continuous improvement plan, which encompasses our human assets, the use of technology, and the focus on the customer's needs and visibility. I appreciate everyone taking time to listen this morning and look forward to talking to you on our Q3 earnings call in October. Thank you.

Tim Phillips: Thank you, Ludi. Universal continued to employ various cost-cutting strategies while advancing our various opportunities in key segments and verticals.

Speaker Change: I'm pleased with our continuous improvement plan, which encompasses our human assets, the use of technology, and the focus on the customer's needs and visibility.

Tim Phillips: I appreciate everyone taking time to listen this morning and look forward to talking to you in Q3 earnings call in October. Thank you.

Tim Phillips: I appreciate everyone taking time to listen this morning and look forward to talking to you in Q3 earnings call in October . Thank you.

Operator: Thank you, and ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.

Operator: Thank you. And, ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.

Speaker Change: Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.