Universal Logistics Holdings, Inc. (NASDAQ:ULH) Files An 8-K Other Events
Item 8.01 Other Events.

On October 16, 2017, a jury in state court in Cook County, Illinois rendered a verdict of $54.2 million against Universal Am-Can, Ltd. (“UACL”) in the matter of Denton v. UACL, et al. The litigation relates to a vehicular accident that occurred on February 8, 2011 on I-65 in Rensselaer, Indiana. The accident involved a tractor-trailer being driven by an independent owner-operator of UACL. The driver was braking on the expressway in order to avoid another vehicle being driven the wrong way on the interstate. The truck attempted to avoid the oncoming vehicle and the plaintiff’s vehicle and, in so doing, struck the plaintiff’s vehicle. As a result of the accident, the plaintiff sustained non-life threatening injuries. In connection with the verdict, the jury determined that UACL was responsible for the liability associated with the accident, with UACL and the other co-defendants being jointly responsible for 40% of the compensatory damages. The verdict included $19.2 million in compensatory damages and $35.0 million in punitive damages against UACL. The insurance coverage available for reimbursement of UACL’s damages underlying the verdict is limited to $1.0 million.

Based on knowledge of the facts and the analysis of outside counsel in advance of trial, we had estimated our liability for this matter at that time at $2.6 million, net of the $1.0 million insurance coverage. This specific amount was taken into consideration when we provided earnings guidance on October 5, 2017 for the third quarter 2017. Although we are in the process of finalizing our estimate, as a result of the verdict, and after considering the facts and additional analysis of outside counsel, we expect to increase this accrued liability by $15.6 million to $18.2 million. Accordingly, the earnings guidance that we provided on October 5, 2017, which was 11 days before the jury returned its verdict on October 16, 2017, did not reflect the adverse financial impact of the increased accrual or the ultimate outcome of these claims on our financial results for the third quarter 2017. While it is not feasible to predict with any certainty the outcome of this litigation, its ultimate resolution could be material to our cash flows and results of operations.

We intend to file motions in the trial court seeking judgment in UACL’s favor on certain claims that are the subject of the verdict, and for a new trial on others. We believe the facts and the law do not support the jury’s findings of liability against UACL, and we intend to appeal the verdict to the extent the circuit court does not set it aside as a result of these motions.

About Universal Logistics Holdings, Inc. (NASDAQ:ULH)

Universal Logistics Holdings, Inc., formerly Universal Truckload Services, Inc., is an asset-light provider of transportation and logistics solutions across the United States, Mexico, Canada and Colombia. The Company operates through two segments: the transportation segment and the logistics segment. The Company’s operations aggregated in the transportation segment are associated with individual freight shipments coordinated by its agents, company-managed terminals and specialized services operations. The Company’s operations aggregated in the logistics segment delivers value-added services and transportation services to specific customers, pursuant to contract terms of approximately one year or longer. Other operating segments consist of the Company’s subsidiaries that provide support services to other subsidiaries and to owner-operators, including shop maintenance and equipment leasing. The Company owns approximately 20 terminal yards and other properties.