UNIVERSAL LOGISTICS HOLDINGS, INC.

Current report

The following risks and uncertainties could materially and adversely affect our business, financial condition, results of operations, cash flows, or the market price of our common stock. The risks described below are not the only risks we face. Additional risks not presently known to us or that we currently deem immaterial may also impair our business. You should carefully consider these risk factors together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

Current report

Risks Related to Our Industry and Operating Environment

Current report

Our business is sensitive to general economic conditions, customer demand cycles, and macroeconomic volatility.

Current report

Demand for our transportation and logistics services is highly dependent on general economic conditions and the business cycles of our customers. Adverse economic conditions—including inflation, rising interest rates, reduced industrial production, supply chain disruptions, or recessionary pressures—may reduce shipping volumes, increase pricing pressure, delay customer payments, or increase customer credit risk. These effects may be more pronounced in industries where we have meaningful customer concentration, including automotive, metals, and industrial manufacturing.

Current report

Deterioration in U.S. or global economic conditions may also constrain our customers’ access to capital, adversely affect their production levels, or cause them to reduce or delay logistics spending, any of which could materially and adversely affect our results of operations and cash flows.

Current report

We operate in a highly competitive and fragmented industry, which could limit our ability to maintain pricing, margins, or market share.

Current report

The transportation and logistics industry is intensely competitive and fragmented. We compete with asset-based and non-asset-based carriers, integrated logistics providers, railroads, and increasingly with technology-enabled brokers and digital freight platforms. Some competitors have greater financial resources, larger equipment fleets, broader service offerings, more advanced technology platforms, or greater economies of scale.

Current report

Competitive pressures may result in downward pricing, reduced margins, loss of customers, increased capital or technology investment requirements, or higher labor and capacity costs. In addition, customers may reduce the number of carriers they use, rely on lead logistics providers that allocate freight on a non-neutral basis, or rebid freight frequently, which could further pressure pricing and volumes.

Current report

Volatility in diesel fuel prices or disruptions in fuel supply could adversely affect our operating results.

Current report

We do not currently hedge against fuel price fluctuations. Although we have historically recovered a portion of fuel cost increases through fuel surcharge mechanisms, rate adjustments, or other contractual pricing arrangements, there can be no assurance that these measures will fully offset increases in fuel prices, fuel taxes or other energy-related costs. In particular, fuel surcharge programs may lag market price movements, may not apply to all of our services or contracts, and may be difficult to implement or adjust during periods of rapid or sustained price volatility or competitive pricing pressure.

Current report

Recent geopolitical developments, including military conflicts and instability in regions critical to global energy production and shipping, have increased volatility in global oil markets and could further disrupt energy supply chains. If disruptions to oil production, refining capacity, or maritime transportation routes occur or intensify, diesel fuel prices could increase significantly and fuel availability in certain markets could be constrained.

Current report

Sustained increases in fuel prices, reduced fuel availability, or disruptions in fuel distribution networks could increase operating costs for our company-owned equipment and may also adversely affect the economics of owner-operator arrangements and third-party transportation providers on whom we rely. Any such developments could materially adversely affect our operating margins, operating results, cash flows, and overall financial condition.

Current report

Driver and labor availability constraints could limit growth and increase costs.

Current report

The transportation industry continues to experience challenges in attracting and retaining qualified drivers and skilled logistics personnel. Competition for labor may require increased wages, benefits, incentives, or recruiting costs and could result in equipment under-utilization, service disruptions, or missed growth opportunities. If we are unable to attract or retain sufficient personnel, our profitability and ability to meet customer service requirements could be adversely affected.

Current report

Capital intensity and equipment cost trends may adversely affect cash flows and returns.

Current report

Our business requires significant ongoing capital investment in tractors, trailers, chassis, and other equipment. Purchase prices for new equipment may increase due to regulatory requirements, supply constraints, or manufacturer pricing actions, while the resale value of used equipment may decline due to market oversupply or technological obsolescence. These factors could increase depreciation expense, reduce proceeds from asset sales, and adversely affect our cash flows and financial condition.

Current report

Trade policy changes, tariffs, and geopolitical developments could adversely affect our business.

Current report

Our business depends heavily on cross-border trade between the United States, Canada, and Mexico. Changes in trade policy, tariffs, customs regulations, or geopolitical tensions could disrupt supply chains.

Current report

Risks Related to Regulation, Legal Matters, and Compliance

Current report

We operate in a highly regulated industry, and changes in laws or regulations could increase costs or limit operations.

Current report

Our operations are subject to extensive federal, state, and international regulation, including safety, labor, environmental, customs, and transportation requirements. Compliance with existing or future regulations may increase operating costs, restrict capacity, disrupt operations, or require additional capital expenditures. Violations could result in fines, penalties, operational restrictions, or reputational harm.

Current report

Independent contractor classification risks could result in significant liabilities.

Current report

Federal and state authorities continue to scrutinize the classification of independent contractors in the transportation industry. Changes in laws, regulations, or enforcement interpretations could result in reclassification of owner-operators or agents as employees, which could materially increase labor costs, tax obligations, benefit liabilities, and potential retroactive exposure.

Current report

Environmental and climate-related regulations may increase costs or constrain operations.

Current report

We are subject to environmental laws governing emissions, fuel storage, hazardous materials, and stormwater discharge. Increased focus on climate change may result in new regulations, customer requirements, or emissions-related taxes that increase operating or capital costs, reduce fuel efficiency, or require equipment upgrades. Compliance costs or failure to meet customer sustainability expectations could adversely affect our results.

Current report

We have restated previously issued financial statements, which may adversely affect investor confidence and expose us to additional risks.

Current report

In March 2026, the Company determined that its previously issued condensed consolidated financial statements as of and for the quarter ended September 27, 2025 should no longer be relied upon due to an error identified in the goodwill impairment analysis for the Company’s intermodal reporting unit. Specifically, certain deferred tax liabilities attributable to intercompany allocations were included in the carrying value used in the impairment analysis when they should not have been included. As a result, the Company restated those financial statements and recorded an additional goodwill impairment charge of approximately $43.2 million.

Current report

Restatements of previously issued financial statements may negatively affect investor confidence in the reliability of our financial reporting and could cause our stock price to decline. Restatements may also increase the risk of regulatory scrutiny, including inquiries or investigations by the Securities and Exchange Commission, and may expose us to litigation or other claims. In addition, responding to matters arising from a restatement can require significant management time and attention and may increase professional fees and other costs.

Current report

Although the restatement described above relates to a non-cash accounting adjustment and does not affect the Company’s previously reported revenues, operating cash flows, liquidity, or compliance with debt covenants, we cannot assure you that additional issues will not be identified in the future or that similar matters will not occur again.

Current report

We have identified a material weakness in our internal control over financial reporting. If we fail to remediate this material weakness or otherwise maintain effective internal control over financial reporting, our ability to accurately report our financial results could be adversely affected.

Current report

As discussed elsewhere in this Annual Report on Form 10-K, the Company restated its condensed consolidated financial statements for the quarter ended September 27, 2025 as a result of an error identified in the goodwill impairment analysis for the Company’s intermodal reporting unit. Management concluded that the error that resulted in the restatement is consistent with a previously identified material weakness in the Company’s internal control over financial reporting related to the accounting for complex and non-routine transactions and the preparation and review of financial statements and related disclosures.

Current report

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Because of this material weakness, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2025.

Current report

Management has begun implementing remediation measures designed to address this material weakness, including enhancing the Company’s internal technical accounting expertise and strengthening review procedures relating to complex and non-routine accounting matters, including goodwill impairment analyses. However, these remediation efforts are ongoing, and management cannot provide assurance that these measures will fully remediate the material weakness or prevent future deficiencies in internal control over financial reporting.

Current report

Management continues to evaluate the effectiveness of these remediation measures and may determine that additional steps are necessary to address the material weakness. In addition, management may identify additional deficiencies or material weaknesses in internal control over financial reporting in the future as remediation efforts continue and controls are tested.

Current report

Maintaining effective internal control over financial reporting requires ongoing diligence, particularly as our business continues to evolve through acquisitions, operational changes, increased transaction complexity, and personnel changes. As our operations grow and change, there can be no assurance that additional deficiencies or material weaknesses will not be identified in the future.

Current report

If the Company is unable to successfully remediate the material weakness, or if additional material weaknesses or significant deficiencies are identified in the future, the Company’s ability to accurately record, process, summarize and report financial information could be adversely affected. In addition, the Company could become subject to increased regulatory scrutiny, incur additional costs related to remediation and external audit procedures, or experience reduced investor confidence in the reliability of its financial statements.

Current report

We may be required to record additional impairment charges related to goodwill and other long-lived assets, which could materially adversely affect our results of operations.

Current report

We carry goodwill and other intangible assets on our consolidated balance sheet as a result of prior acquisitions. We evaluate goodwill for impairment at least annually and more frequently if events or changes in circumstances indicate that the carrying value of a reporting unit may not be recoverable. We also evaluate long-lived tangible and intangible assets for impairment when triggering events occur.

Current report

During the year ended December 31, 2025, we recorded material non-cash impairment charges totaling approximately $124.4 million related to goodwill and customer-relationship intangible assets associated with our intermodal reporting unit. As a result of these impairment charges, no goodwill remains attributable to the intermodal reporting unit.

Current report

The determination of whether an impairment exists requires significant judgment and involves estimates and assumptions regarding future cash flows, revenue growth rates, operating margins, terminal values, and discount rates. These estimates and assumptions reflect management’s judgments based on information available at the time the analyses are performed, and future events or changes in circumstances may differ from those assumptions.

Previous report

Set forth below, and elsewhere in this Report and in other documents we file with the SEC, are risks and uncertainties that could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this Report or our other filings with the SEC or in oral presentations such as telephone conferences open to the public. You should carefully consider the following factors in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and our Consolidated Financial Statements and related Notes in Item 8.

Previous report

Risks Related to Our Industry

Previous report

Our business is subject to general economic and business factors that are largely beyond our control, any of which could have a material adverse effect on our operating results.

Previous report

Our business is dependent upon a number of general economic and business factors that may adversely affect our results of operations. These factors include significant increases or rapid fluctuations in fuel prices, excess capacity in the transportation and logistics industry, surpluses in the market for used equipment, interest rates, fuel taxes, license and registration fees, insurance premiums, self-insurance levels, and difficulty in attracting and retaining qualified drivers and independent contractors.

Previous report

We operate in a highly competitive and fragmented industry, and our business may suffer if we are unable to adequately address any downward pricing pressures or other factors that may adversely affect our ability to compete with other carriers.

Previous report

We are affected by recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries, such as the automotive industry, where we have a significant concentration of customers. Economic conditions may also adversely affect our customers and their ability to pay for our services.

Previous report

Deterioration in the United States and world economies could exacerbate any difficulties experienced by our customers and suppliers in obtaining financing, which, in turn, could materially and adversely impact our business, financial condition, results of operations and cash flows.

Previous report

The Trump administration has stated its intention to impose new or increased tariff rates on imported goods from a number of countries, including China, Canada, Mexico, and the E.U. Such trade policies and tariff implementations, and any related retaliatory trade policies and tariff implementations by foreign governments, may result in decreased shipping volumes and have an adverse impact on our revenues and results of operations.

Previous report

We operate in the highly competitive and fragmented transportation and logistics industry, and our business may suffer if we are unable to adequately address factors that may adversely affect our revenue and costs relative to our competitors.

Previous report

Numerous competitive factors could impair our ability to maintain our current profitability. These factors include the following:

Previous report

we compete with many other truckload carriers and logistics companies of varying sizes, some of which have more equipment, a broader coverage network, a wider range of services and greater capital resources than we do;

Previous report

some of our competitors periodically reduce their rates to gain business, especially during times of reduced growth rates in the economy, which may limit our ability to maintain or increase rates, maintain our operating margins, or maintain significant growth in our business;

Previous report

many customers reduce the number of carriers they use by selecting so-called “core carriers” as approved service providers and, in some instances, we may not be selected;

Previous report

some companies hire lead logistics providers to manage their logistics operations, and these lead logistics providers may hire logistics providers on a non-neutral basis which may reduce the number of business opportunities available to us;

Previous report

many customers periodically accept bids from multiple carriers and providers for their shipping and logistic service needs, and this process may result in the loss of some of our business to competitors and/or price reductions;

Previous report

the trend toward consolidation in the trucking and third-party logistics industries may create other large providers with greater financial resources and other competitive advantages relating to their size and with whom we may have difficulty competing;

Previous report

advances in technology require increased investments to remain competitive, and our customers may not be willing to accept higher rates to cover the cost of these investments;

Previous report

competition from Internet-based and other brokerage companies may adversely affect our relationships with our customers and freight rates;

Previous report

economies of scale that may be passed on to smaller providers by procurement aggregation providers may improve the ability of smaller providers to compete with us;

Previous report

some areas of our service coverage require trucks with engines no older than 2011 in order to comply with environmental rules; and

Previous report

an inability to continue to access capital markets to finance equipment acquisition could put us at a competitive disadvantage.

Previous report

Diesel fuel represents a significant operating expense for the Company, and we do not currently hedge against the risk of diesel fuel price increases. An increase in diesel fuel prices or diesel fuel taxes, or any change in federal or state regulations that results in such an increase, could have a material adverse effect on our operating results to the extent we are unable to recoup such increases from customers in the form of increased freight rates or through fuel surcharges. Historically, we have been able to offset, to a certain extent, diesel fuel price increases through fuel surcharges to our customers, but we cannot be certain that we will be able to do so in the future. We continuously monitor the components of our pricing, including base freight rates and fuel surcharges, and address individual account profitability issues with our customers when necessary. While we have historically been able to adjust our pricing to help offset changes to the cost of diesel fuel through changes to base rates and/or fuel surcharges, we cannot be certain that we will be able to do so in the future.

Previous report

Difficulty in attracting drivers could affect our profitability and ability to grow.

Previous report

The transportation industry routinely experiences difficulty in attracting and retaining qualified drivers, including independent contractors, resulting in intense competition for drivers. We have from time to time experienced under-utilization and increased expenses due to a shortage of qualified drivers. If we are unable to attract drivers when needed or contract with independent contractors when needed, we could be required to further adjust our driver compensation packages, increase driver recruiting efforts, or let trucks sit idle, any of which could adversely affect our growth and profitability.

Previous report

Purchase price increases for new revenue equipment and/or decreases in the value of used revenue equipment could have an adverse effect on our results of operations, cash flows and financial condition.

Previous report

During the last decade, the purchase price of new revenue equipment has increased significantly as equipment manufacturers recover increased materials costs and engine design costs resulting from compliance with increasingly stringent EPA engine emission standards. Additional EPA emission mandates in the future could result in higher purchase prices of revenue equipment which could result in higher than anticipated depreciation expenses. If we were unable to offset any such increase in expenses with freight rate increases, our cash flows and results of operations could be adversely affected. If the market price for used equipment continues to decline, then we could incur substantial losses upon disposition of our revenue equipment which could adversely affect our results of operations and financial condition.

Previous report

We have significant ongoing capital requirements that could affect our liquidity and profitability if we are unable to generate sufficient cash from operations or obtain sufficient financing on favorable terms.

Previous report

The transportation and logistics industry is capital intensive. If we are unable to generate sufficient cash from operations in the future, we may have to limit our growth, enter into unfavorable financing arrangements, or operate our revenue equipment for longer periods, any of which could have a material adverse effect on our profitability.

Previous report

We operate in a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future regulations could have a material adverse effect on our business.

Previous report

The FMCSA and various state and local agencies exercise broad powers over our business, generally governing such activities as authorization to engage in motor carrier operations, drug and alcohol testing, safety and insurance requirements. Our owner-operators must comply with the safety and fitness regulations promulgated by the FMCSA, including those relating to drug and alcohol testing and hours-of-service. There also are regulations specifically relating to the trucking industry, including testing and specifications of equipment and product handling requirements. These measures could disrupt or impede the timing of our deliveries and we may fail to meet the needs of our customers. The cost of complying with these regulatory measures, or any future measures, could have a materially adverse effect on our business or results of operations.

Previous report

A determination that independent contractors are employees could expose us to various liabilities and additional costs.

Previous report

Federal and state legislators and other regulatory authorities, as well as independent contractors themselves, often seek to assert that independent contractors in the transportation services industry are employees rather than independent contractors. An example of such legislation enacted in California is now enforceable against trucking companies. There can be no assurance that interpretations that support the independent contractor status will not change, that other federal or state legislation will not be enacted or that various authorities will not successfully assert a position that re-classifies independent contractors to be employees. If our independent contractors are determined to be our employees, that determination could materially increase our exposure under a variety of federal and state tax, workers’ compensation, unemployment benefits, labor, employment and tort laws, as well as our potential liability for employee benefits. In addition, such changes may be applied retroactively, and if so, we may be required to pay additional amounts to compensate for prior periods. Any of the above increased costs would adversely affect our business and operating results.

Previous report

We may incur additional operating expenses or liabilities as a result of potential future requirements to address climate change issues.

Previous report

Federal, state, and local governments, as well as some of our customers, are beginning to respond to global warming issues. This increased focus on sustainability may result in new legislation or regulations and customer requirements that could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements. Legislation or regulations that potentially impose restrictions, caps, taxes, or other controls on emissions of greenhouse gases such as carbon dioxide, a by-product of burning fossil fuels such as those used in the Company’s trucks, could adversely affect our operations and financial results. More specifically, legislative, or regulatory actions related to climate change could adversely impact the Company by increasing our fuel costs and reducing fuel efficiency and could result in the creation of substantial additional capital expenditures and operating costs in the form of taxes, emissions allowances, or required equipment upgrades. Any of these factors could impair our operating efficiency and productivity and result in higher operating costs. In addition, revenues could decrease if we are unable to meet regulatory or customer sustainability requirements. These additional costs, changes in operations, or loss of revenues could have a material adverse effect on our business, financial condition, and results of operations.

Previous report

Our revenue is largely dependent on North American automotive industry production volume and may be negatively affected by future downturns in North American automobile production.

Previous report

A significant portion of our larger customers are concentrated in the North American automotive industry. During 2024, 47% of our revenues were derived from customers in the North American automotive industry. Our business and growth largely depend on continued demand for its services from customers in this industry. Any future downturns in North American automobile production, which also impacts our steel and other metals customers, could similarly affect our revenues in future periods.

Previous report

Our business derives a large portion of revenue from a few major customers, and the loss of any one or more of them as customers, or a reduction in their operations, could have a material adverse effect on our business.

Previous report

A large portion of our revenue is generated from a limited number of major customers concentrated in the automotive, railroad, retail and consumer goods, steel and other metals, energy and manufacturing industries. Our top 10 customers accounted for approximately 56% of our operating revenues during 2024. Our contracts with customers generally contain cancellation clauses, and there can be no assurance that these customers will continue to utilize our services or that they will continue at the same levels. Further, there can be no assurance that these customers will not be affected by a future downturn in demand, which would result in a reduction in their operations and corresponding need for our services. Moreover, our customers may individually lose market share, apart from general economic trends. If our major customers lose U.S. market share, they may have less need for services. A reduction in or termination of services by one or more of our major customers could have a material adverse effect on our business and results of operations.

Previous report

If we are unable to retain our key employees, our business, financial condition, and results of operations could be harmed.

Previous report

We are highly dependent upon the services of our key employees and executive officers. The loss of any of their services could have a material adverse effect on our operations and future profitability. We must continue to develop and retain a core group of managers if we are to realize our goal of expanding our operations and continuing our growth. We cannot assure that we will be able to do so.