Investment Thesis
Universal Logistics faces severe financial distress with negative profitability, sharply declining revenues (-15.6% YoY), and critically unsustainable leverage. Most alarmingly, the 0.4x interest coverage ratio indicates the company cannot service its $750.3M debt burden from operating income, creating imminent refinancing risk and potential default exposure.
Strengths
- Positive operating cash flow of $33.4M demonstrates underlying business still generates cash
- Free cash flow of $23.8M remains positive, providing limited financial flexibility
- Current ratio of 1.13x maintains minimal liquidity buffer above distressed levels
Risks
- Interest coverage ratio of 0.4x is critically unsustainable—operating income cannot cover interest obligations, indicating acute solvency risk
- Revenue contraction of 15.6% YoY signals deteriorating business conditions in cyclical trucking sector
- Elevated debt-to-equity of 1.39x with only $17.9M cash against $750.3M long-term debt creates acute refinancing vulnerability
- Negative net margin of -1.0% and unprofitable operations provide no cushion for adverse developments
- Razor-thin operating margin of 1.3% leaves zero tolerance for further operational deterioration
Key Metrics to Watch
- Interest coverage ratio trend—any further decline indicates default risk escalation
- Revenue stabilization or continued decline—sequential trends will signal business stabilization
- Free cash flow sustainability—must remain positive to service debt absent profitability improvement
- Debt refinancing activities—market access at reasonable rates will determine survival timeline
Financial Metrics
Revenue
367.6M
Net Income
-3.5M
EPS (Diluted)
$-0.13
Free Cash Flow
23.8M
Total Assets
1.7B
Cash
17.9M
Profitability Ratios
Gross Margin
N/A
Operating Margin
1.3%
Net Margin
-1.0%
ROE
-0.7%
ROA
-0.2%
FCF Margin
6.5%
Balance Sheet & Liquidity
Current Ratio
1.13x
Quick Ratio
1.10x
Debt/Equity
1.39x
Debt/Assets
0.0%
Interest Coverage
0.39x
Long-term Debt
750.3M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-15T06:16:12.962024 |
Data as of: 2026-04-04 |
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