SUMMARY

This summary highlights selected information from this Information Statement with respect to the proposed merger of Upton Merger Sub I, Inc., a Michigan corporation, which we refer to in this Information Statement as “Merger Sub,” with and into LINC Logistics Company, a Michigan corporation, which we refer to in this Information Statement as “LINC,” with LINC as the surviving entity, and promptly thereafter the merger of LINC with and into Upton Merger Sub II, LLC, a Michigan limited liability company, which we refer to in this Information Statement as “Merger Sub, LLC,” with Merger Sub, LLC as the surviving entity, and the Merger Agreement (as defined below). In this Information Statement we refer to the foregoing mergers collectively as the “merger.” This summary may not contain all of the information that is important to you. To understand the merger fully and for a more complete description of the legal terms of the Merger Agreement and the related agreements, you should carefully read this entire Information Statement. Please see “Where You Can Find More Information” beginning on page 135. We have included references to other portions of this Information Statement to direct you to a more complete description of the topics presented in this summary, which you should review carefully in their entirety.

The Companies (Page 31)

Universal

Universal is a publicly traded Michigan corporation, whose common shares, no par value, which we refer to in this Information Statement as Universal “common stock,” are traded on The NASDAQ Global Select Market. Universal is primarily an asset-light provider of transportation services to shippers throughout the United States and in the Canadian provinces of Ontario and Quebec. Its over-the-road trucking services include both flatbed and dry van operations and it provides rail-truck and steamship-truck intermodal support services. Universal also offers truck brokerage services, which allows it to supplement its capacity and provide its customers with transportation of freight by using third party capacity, as well as full service international freight forwarding and customs house brokerage services.

Universal conducts its operations through its wholly-owned operating subsidiaries under the brand names Universal Am-Can, Ltd., Mason & Dixon Lines, Inc., Louisiana Transportation Inc., Mason Dixon Intermodal, Inc., Economy Transport, Inc., Great American Lines, Inc., Universal Logistics Solutions, Inc., Universal Logistics Solutions International, Inc., and Cavalry Transportation, LLC.

Merger Sub

Merger Sub was formed as a Michigan corporation by Universal solely for the purpose of completing the transactions contemplated by the Merger Agreement. Merger Sub is a wholly-owned subsidiary of Universal and has not carried on any activities to date, except for activities incidental to its incorporation and activities undertaken in connection with the transactions contemplated by the Merger Agreement.

Merger Sub, LLC

Merger Sub, LLC was formed as a Michigan limited liability company by Universal solely for the purpose of completing the transactions contemplated by the Merger Agreement. Merger Sub, LLC is a wholly-owned subsidiary of Universal and has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the Merger Agreement.

LINC Logistics Company

LINC is a Michigan corporation that is a leading provider of custom-developed third-party logistics solutions that allow its customers and clients to reduce costs and manage their global supply chains more efficiently. LINC offers a comprehensive suite of supply chain logistics services, including value-added, transportation and specialized services, through 43 locations in the United States, Canada and Mexico. Historically, LINC’s largest end-market has been the automotive segment.

 

The Merger (Page 32)

On July 25, 2012, we entered into an Agreement and Plan of Merger, which we refer to in this Information Statement as the “Merger Agreement,” with LINC, Merger Sub, Merger Sub, LLC, Matthew T. Moroun, Matthew T. Moroun as Trustee of the MJ Moroun 2012 Annuity Trust dated April 30, 2012, which we refer to in this Information Statement as the “Annuity Trust,” Manuel J. Moroun, in his capacity as Trustee of the Manuel J. Moroun Revocable Trust U/A dated March 24, 1977, as amended and restated on December 22, 2004, which we refer to in this Information Statement as the “MJM Revocable Trust,” Matthew T. Moroun, in his capacity as agent and attorney-in-fact for the shareholders of LINC, and Manuel J. Moroun, solely with respect to certain sections of the Merger Agreement. We refer to Messrs. Moroun and the MJM Revocable Trust as the “Moroun family” in this Information Statement. The merger will be effectuated pursuant to the terms of the Merger Agreement. At the effective time of the merger of Merger Sub with and into LINC, each outstanding voting common share, no par value, of LINC, which we refer to in this Information Statement as “LINC common stock,” will be converted into the right to receive consideration consisting of 0.700 of a share of Universal common stock and cash in lieu of fractional shares. This will result in the issuance of approximately 14.5 million shares, valued at approximately $182 million based on Universal’s closing stock price as of July 25, 2012. It is anticipated that Messrs. Moroun and their affiliated trusts will own approximately 82%, and Universal’s current shareholders, other than the Moroun family, will own approximately 18% of the outstanding common stock of Universal following the completion of the merger.

Financing of the Merger (page 68).

It is a condition to the closing of the merger that Universal obtain new financing of between $200,000,000 and $220,000,000. Based on Universal’s and LINC’s outstanding indebtedness and dividends payable at March 31, 2012, Universal would expect to borrow approximately $152.1 million under the proposed new credit facility and use the proceeds for the following: (i) to pay off LINC’s outstanding indebtedness to lenders totaling $59.7 million, (ii) to pay off $24.5 million of a dividend payable to affiliates of Messrs. Moroun, (iii) to pay off a $25.0 million Dividend Distribution Promissory Note to an affiliate of Messrs. Moroun, (iv) to pay off an aggregate $45.0 million promissory notes to LINC’s current shareholders, and (v) to pay an estimated $1.3 million of debt issuance costs. The use of proceeds would be offset by the $5.0 million repayment of notes receivable from affiliates resulting in an increase in cash of $1.6 million. Universal may also borrow additional amounts under the new credit facility to refinance any outstanding amounts under Universal’s existing credit facility.

Approval of the Universal Board of Directors and Special Committee (page 33).

The terms of the Merger Agreement were negotiated and considered by a special committee, which we refer to in this Information Statement as the “Special Committee,” comprised entirely of independent and disinterested members of Universal’s Board of Directors, which we refer to in this Information Statement as the “Board.” The Special Committee unanimously recommended that the Board adopt the Merger Agreement and approve the transactions contemplated thereby, including the issuance of shares of common stock of Universal in accordance with the Merger Agreement. The Board, with Messrs. Moroun recusing themselves, acting upon the unanimous recommendation of the Special Committee, adopted the Merger Agreement and approved the transactions contemplated thereby including the issuance of shares of common stock of Universal in accordance with the Merger Agreement. For additional information, see the section captioned “Background of the Merger” beginning on page 33 of the Information Statement.

NASDAQ Shareholder Approval Requirement.

Universal’s common stock is listed on The NASDAQ Global Section Market. Pursuant to NASDAQ Listing Rule 5635(a), the affirmative vote or written consent of the holders of a majority of the issued and outstanding shares of common stock of Universal is required to issue shares with voting power equal to or in excess of 20% of the voting power of the shares outstanding before such issuance or equal to or more than 20% of the number of shares outstanding before such issuance. Accordingly, the issuance of shares of Universal common stock in connection with the merger will require shareholder consent. On July 26, 2012, the Moroun family executed a written consent authorizing the issuance of shares of Universal common stock in connection with the merger in accordance with NASDAQ Listing Rule 5635(a). Because the Moroun family owns approximately 65% of the issued and outstanding shares of common stock of Universal, no further action by any other shareholder of Universal is required to approve the issuance of shares of common stock. There is no requirement under Michigan law requiring consent of the shareholders of Universal to the merger.

 

Reasons for the Merger (page 47).

In making its decision to recommend that the Universal Board of Directors adopt the Merger Agreement and approve the merger and the other transactions contemplated by the Merger Agreement, the Special Committee considered the factors described in the section of this Information Statement entitled “The Merger—Reasons for the Merger” beginning on page 47 of this Information Statement. The Universal Board of Directors, with Messrs. Moroun recusing themselves, acting upon the unanimous recommendation of the Special Committee and taking into account the factors considered by the Special Committee, adopted the Merger Agreement and approved the merger and the other transactions contemplated by the Merger Agreement.

Opinion of the Special Committee’s Financial Advisor (page 50).

On July 25, 2012, the Special Committee’s financial advisor, Evercore Group L.L.C., who we refer to in this Information Statement as “Evercore,” delivered its oral opinion to the Special Committee, which opinion was subsequently confirmed by delivery of a written opinion dated July 25, 2012, to the effect that, as of such date and based upon and subject to the factors, procedures, assumptions, qualifications and limitations set forth in its opinion, the exchange ratio pursuant to the Merger Agreement was fair, from a financial point of view, to Universal.

The full text of the written opinion of Evercore, dated as of July 25, 2012, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex B to this Information Statement and is incorporated by reference in its entirety into this Information Statement. You are urged to read this opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the Special Committee in connection with its evaluation of the exchange ratio from a financial point of view and did not address any other aspects or implications of the merger. The opinion does not constitute a recommendation to the Special Committee or to any other persons in respect of the merger, including as to how any holder of shares of the Universal common stock should act in respect of the Universal share issuance. Evercore’s opinion does not address the relative merits of the merger as compared to other business or financial strategies that might be available to Universal, nor does it address the underlying business decision of Universal to engage in the merger. The summary of the Evercore opinion set forth herein is qualified in its entirety by reference to the full text of the opinion included as Annex B.

Interests of Executive Officers and Directors of Universal in the Merger

Messrs. Moroun are directors of Universal and beneficially own, in the aggregate, approximately 65% of the outstanding common stock of Universal. Messrs. Moroun also beneficially own, in the aggregate, 100% of the common stock of LINC and are directors of LINC. After the completion of the merger, Messrs. Moroun will beneficially own, in the aggregate, approximately 82% of Universal’s outstanding shares of common stock. In connection with the transactions described herein, Messrs. Moroun and entities they control will receive cash in an aggregate amount of $94.5 million to pay previously declared but unpaid dividends and related promissory notes. The Moroun family has interests that are different from, or in addition to, the interests of the Universal shareholders generally. For additional information, see the sections captioned “The Merger—Interests of Executive Officers and Directors of Universal in the Merger” on page 65 of the Information Statement.

Material Agreements and Relationships between Universal and LINC and their Respective Affiliates (page 61).

In addition to the relationships between Messrs. Moroun and both LINC and Universal that are described above relating to Messrs. Moroun’s roles as directors and beneficial owners, Universal and LINC have significant ongoing business relationships with each other and with other affiliates of Messrs. Moroun. For example, both Universal and LINC obtain various administrative and management services from CenTra, Inc., which we refer to in this Information Statement as “CenTra,” and its affiliates. CenTra is wholly-owned and controlled by the Moroun family or its affiliates. LINC and Universal also obtain auto liability and property damage insurance and employee health and other insurances from an affiliate of CenTra, and lease various properties from affiliates of CenTra. Additionally, LINC and Universal have ongoing business relationships with each other and with CenTra including freight carrier services and transportation services. Universal and the Moroun family are also parties to a registration rights agreement, which is described below and will be amended and restated in connection with the closing of the merger.

LINC also pays tolls and other fees to Detroit International Bridge Company and certain related entities, which is ultimately controlled by the Moroun family or its affiliates, when LINC crosses the Ambassador Bridge between Detroit, Michigan and Windsor, Ontario. LINC previously advanced $5 million to an affiliate of DIBC Investments, Inc. in return for a promissory note accruing interest at 6.5% per annum, compounded daily. This note will be paid off in connection with the closing of the merger.

 

Executive Compensation (page 65).

None of Universal’s or LINC’s named executive officers will receive any compensatory payments or benefits that constitute “golden parachute” payments within the meaning of Item 402(t) of Regulation S-K.

Impact of Stock Issuance on Existing Stockholders (page 66).

The issuance of common stock of Universal as consideration for the merger will dilute the ownership and voting interests of the Universal existing shareholders. Upon the issuance of 14,527,334 shares of Universal common stock in connection with the merger and assuming no other issuances of shares prior to the date of completion of the merger, the Moroun family will own 81.8% of the Universal common stock issued and outstanding immediately after the consummation of the merger. Therefore, the ownership and voting interests of Universal’s existing shareholders (other than the Moroun family) will be proportionately reduced.

Material U.S. Federal Income Tax Consequences of the Merger to Universal and its Shareholders (page 66).

No gain or loss will be recognized by us or our shareholders in connection with the issuance of Universal common stock or the exchange of LINC common stock for shares of Universal common stock in the merger. See “The Merger—Material U.S. Federal Income Tax Consequences of the Merger to Universal and its Shareholders” beginning on page 66 of this Information Statement for further information.

Accounting Treatment of the Merger (page 67).

Under United States Generally Accepted Accounting Principles, the merger will be accounted for using the guidance for transactions between entities under common control as described in Accounting Standards Codification (“ASC”) Topic 805—“Business Combinations.”

Regulatory Approvals and Clearances (page 67).

The parties cannot close the merger until the appropriate pre-merger notification forms are filed with the U.S. Federal Trade Commission and the U.S. Department of Justice and the statutory 30-calendar day waiting period following the filing of the notification forms has expired or been terminated. The pre-merger notification forms were filed on July 27, 2012.

Expected Timing of the Merger (page 68).

We expect to complete the merger before the end of the third quarter of 2012. However, the merger is subject to a number of conditions, some of which are beyond the control of Universal, LINC and the Moroun family, and we cannot predict the precise timing for completion of the merger with certainty. See “The Merger Agreement” beginning on page 69 of this Information Statement and “Risk Factors—The merger may not be completed, which could adversely affect Universal’s financial condition, results of operation, and trading price of its common stock” business operations and stock price.” beginning on page 16 of this Information Statement for further information.

Conditions to the Merger (page 80).

The completion of the merger is subject to the satisfaction or, to the extent legally permissible, the waiver of a number of conditions in the Merger Agreement, such as:

 

•

the expiration of any waiting period under the HSR Act applicable to the Merger Agreement or transactions or documents contemplated thereby;

 

•

the absence of any restraining order, injunction or other order or decree from a governmental authority or any applicable law which prevents the merger, and the absence of any proceeding initiated by any governmental authority that seeks to prevent the consummation of the merger;

 

•

the receipt by Universal or one of its subsidiaries of the proposed financing described above;

 

•

the receipt and effectiveness of the required written consents of the LINC Shareholders, as shareholders of LINC, and of Messrs. Moroun, as shareholders of Universal;

 

•

compliance in all material respects by the parties with their respective obligations under the Merger Agreement;

 

•

the absence of breaches of representations and warranties in the Merger Agreement, subject in certain instances to materiality or material adverse effect qualification;

 

•

the receipt of required consents of affiliates of the Moroun family; and

 

•

the absence of a material adverse effect of either LINC or Universal since January 1, 2012.

Termination of the Merger Agreement (page 81).

The Merger Agreement may be terminated at any time prior to the completion of the merger in any of the following ways:

 

•

by mutual written consent of Universal and LINC;

 

•

by LINC or the Special Committee, on behalf of Universal, if the merger has not been consummated on or before December 31, 2012, subject to certain conditions and possible extensions;

 

•

by LINC or the Special Committee if any governmental authority has issued a final and non-appealable order, injunction or other decree which restrains, enjoins or otherwise prohibits the merger or any other transaction contemplated by the Merger Agreement;

 

•

by the Special Committee if LINC or the LINC Shareholders breach any representation, warranty, covenant or agreement contained in the Merger Agreement, which breach (1) would result in the failure of a condition to the merger and (2) cannot be or has not been cured within 30 days after the giving of written notice by Universal to LINC and the LINC Shareholders of such breach;

 

•

by LINC if Universal breaches any representation or warranty or if Universal, Merger Sub and Merger Sub, LLC breach any covenant or agreement contained in the Merger Agreement, which breach (1) would result in the failure of a condition to the merger and (2) cannot be or has not been cured within 30 days after the giving of written notice by LINC to Universal of such breach; provided that LINC may not terminate because of such breach if it or the LINC Shareholders had actual knowledge of the breach on or prior to the date of the Merger Agreement;

 

•

by the Special Committee if the Moroun family have not delivered, in their capacity as shareholders of LINC and of Universal, written consents to the transactions contemplated by the Merger Agreement; and

 

•

by the Special Committee, or if the Special Committee is no longer in existence, by the audit committee of Universal, if, prior to the closing date of the merger, the authority granted by the Board to the Special Committee has been terminated, materially reduced or has expired.

If terminated in accordance with its terms, the Merger Agreement will become wholly void and of no further force and effect and there shall be no liability or obligation of any party, except with respect to any damages incurred or suffered by a party to the extent that such damages were the result of, or otherwise arose from, the fraud or willful and material breach of the terms of the Merger Agreement by another party.

Appraisal Rights (page 68).

Holders of Universal common stock will not be entitled to exercise appraisal or dissenters rights under Michigan law in connection with the Merger, the issuance of shares of Universal common stock pursuant to the merger or the amendment to Universal’s Amended and Restated Articles of Incorporation.

Amended and Restated Registration Rights Agreement

In connection with the execution of the Merger Agreement, Universal entered into an Amended and Restated Registration Rights Agreement with Matthew T. Moroun, the Annuity Trust and the MJM Revocable Trust, which will become effective upon the closing of the merger. The Amended and Restated Registration Rights Agreement amends and restates the Registration Rights Agreement, dated December 31, 2004, among Universal, Matthew T. Moroun and the MJM Revocable Trust. The Amended and Restated Registration Rights Agreement provides Matthew T. Moroun, the Annuity Trust and the MJM Revocable Trust with certain demand registration rights, whereby such persons may demand that Universal use its reasonable best efforts to effect the registration under the Securities Act of 1933, as amended, which we refer to in this Information Statement as the “Securities Act,” of the registrable securities held by such persons, subject to certain limitations contained therein. These rights include the right to “piggyback” on registration statements on which Universal registers additional shares of common stock.

Amendment to Certificate of Incorporation

Universal’s Amended and Restated Articles of Incorporation currently authorize 40,000,000 shares of common stock. As of July 25, 2012, Universal had 15,490,954 shares of common stock outstanding. Although Universal currently has a sufficient number of shares of common stock authorized to issue the shares of common stock in connection with the merger, Universal intends to amend its Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock from 40,000,000 to 100,000,000.

The approval of the amendment to the Universal Amended and Restated Articles of Incorporation requires the affirmative vote or written consent of the holders of a majority of the issued and outstanding shares of common stock of Universal. The written consent executed by the Moroun family on July 26, 2012 authorized this amendment and, because the Moroun family owns approximately 65% of the issued and outstanding shares of common stock of Universal, no further action by any other shareholder of Universal is required to approve the amendment.

 

Summary Historical Consolidated Financial Data

Summary Historical Consolidated Financial Data of Universal

The following table sets forth the selected historical financial and operating data of Universal as of and for the periods presented. The selected historical balance sheet data at December 31, 2011, 2010 and 2009 and the selected historical statement of income data for the years ended December 31, 2011, 2010 and 2009 have been derived from Universal’s audited consolidated financial statements incorporated by reference into this Information Statement. The selected unaudited historical balance sheet data as of March 31, 2012 and April 2, 2011 and Universal’s unaudited historical statement of income data for the thirteen weeks ended March 31, 2012 and April 2, 2011 have been derived from Universal’s historical unaudited consolidated financial statements incorporated by reference into this Information Statement. The unaudited consolidated financial statements were prepared on a basis consistent with Universal’s audited financial statements and include, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the financial information contained in those statements. The selected historical financial and operating data presented below should be read in conjunction with the information included under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Universal’s consolidated financial statements and related notes in its Annual Report on Form 10-K for the year ended December 31, 2011 and its Quarterly Report on Form 10-Q for the fiscal period ended March 31, 2012. incorporated by reference into this Information Statement. The following financial and operating data may not be indicative of Universal’s future performance.

 

		Thirteen weeks ended								Year ended December 31,
		March 31, 2012				April 2, 2011				2011				2010				2009				2008				2007
		(in thousands, except per share information, operating data and percentages)
Statements of Income Data:
Operating revenues		$	175,848			$	157,630			$	699,771			$	605,943			$	503,230			$	759,517			$	680,359
Operating expenses:
Purchased transportation			135,070				120,459				538,313				461,041				378,008				592,982				520,064
Commissions expense			10,074				9,906				41,930				38,805				33,953				47,333				45,081
Other operating expense			4,018				3,704				14,178				13,276				10,316				9,510				9,429
Selling, general and administrative			14,198				12,723				52,367				49,253				44,232				52,036				48,418
Insurance and claims			4,142				4,137				16,956				17,205				17,348				21,388				21,178
Depreciation and amortization			2,968				2,871				11,636				10,996				10,354				9,638				8,163
Total operating expenses			170,470				153,800				675,380				590,576				494,211				732,887				652,333
Income from operations			5,378				3,830				24,391				15,367				9,019				26,630				28,026
Interest and other non-operating income (expense), net			516				1,007				1,836				6,089				(999	)			(2,375	)			944
Income before provision for income taxes			5,894				4,837				26,227				21,456				8,020				24,255				28,970
Provision for income taxes			2,296				1,938				10,414				8,712				3,120				9,369				11,134
Net income		$	3,598			$	2,899			$	15,813			$	12,744			$	4,900			$	14,886			$	17,836
Earnings per common share:
Basic		$	0.23			$	0.19			$	1.01			$	0.80			$	0.31			$	0.93			$	1.11
Diluted		$	0.23			$	0.19			$	1.01			$	0.80			$	0.31			$	0.93			$	1.11
Weighted average number of common shares outstanding:
Basic			15,537				15,632				15,594				15,917				15,982				16,073				16,115
Diluted			15,537				15,632				15,594				15,917				15,982				16,077				16,122
Cash dividends per common share		$	1.00			$	—			$	1.00			$	—			$	1.00			$	—			$	—
Balance Sheet Data (end of period):
Cash and cash equivalents		$	1,761			$	920			$	878			$	6,261			$	953			$	28,767			$	5,416
Total assets			230,683				223,374				228,944				212,048				201,611				211,547				207,188
Lines of credit and long-term debt, including current portion			—				—				—				90				730				820				910
Total shareholders’ equity			149,935				166,460				162,136				164,211				154,425				164,477				151,442

 

		Thirteen weeks ended								Year ended December 31,
		March 31, 2012				April 2, 2011				2011				2010				2009				2008				2007
		(in thousands, except operating data and percentages)
Other Financial Data (unaudited):
Pretax margin			3.4	%			3.1	%			3.7	%			3.6	%			1.6	%			3.2	%			4.3	%
EBITDA(1)		$	8,850			$	7,691			$	37,805			$	32,332			$	18,640			$	33,881			$	36,811
Capital expenditures(2)		$	1,211			$	3,302			$	21,044			$	10,256			$	22,262			$	10,108			$	14,774
Return on average assets(3)			1.6	%			1.3	%			7.2	%			6.2	%			2.4	%			7.1	%			9.0	%
Operating Data (unaudited):
Number of agents(4)			414				424				384				401				397				409				425
Average number of tractors provided by owner-operators			2,934				2,970				3,118				3,111				3,387				3,618				3,776
Number of employees			617				675				675				714				630				649				642
Operating revenues per loaded mile(5)		$	2.90			$	2.57			$	2.77			$	2.42			$	2.19			$	2.74			$	2.34
Operating revenues per load(5)		$	1,181			$	1,102			$	1,166			$	1,079			$	1,007			$	1,175			$	1,031
Average length of haul (in miles)(5)			407				429				421				445				460				429				439
Number of loads (5)			199,059				187,772				496,572				466,250				414,822				531,716				529,497

 

(1)

EBITDA represents earnings before interest, taxes, depreciation and amortization. Management believes that the presentation of EBITDA included in this Information Statement provides useful information to investors regarding our results of operations because it assists in analyzing and benchmarking the performance and value of our business. Although management uses EBITDA as a financial measure to assess the performance of our business compared to that of others in our industry, the use of EBITDA is limited because it does not include certain material costs, such as depreciation, amortization and interest, necessary to operate our business. EBITDA is not measured under generally accepted accounting principles and, when analyzing our operating performance, investors should use EBITDA in addition to, not as an alternative for, operating income, net income and cash flows from operating activities. Investors also should note that our presentation of EBITDA may not be comparable to similarly titled measures used by other companies.

EBITDA is calculated in the following manner for each of the periods presented:

 

 

(2)	Excludes property and equipment acquired in connection with the acquisition of businesses in each of the following periods: $117,000 in 2010, $675,000 in 2009, and $1.2 million in 2008.

(3)	Net income divided by total average assets during the period. Average assets are the sum of our total assets at the end of the fiscal period and our total assets at the end of the prior fiscal year divided by two.

(4)	Includes only those agents who generated at least $100,000 in operating revenues during the period indicated.

(5)

Includes fuel surcharges and excludes operating data from our intermodal support services and the operating results of Universal Logistics Solutions, Inc. and Universal Logistics Solutions International, Inc. in order to improve the relevance of the statistical data related to our truckload and brokerage services and improve the comparability to our peer companies.

 

Summary Historical Consolidated Financial Data of LINC

The following table sets forth a summary of LINC’s consolidated financial and operating data as of and for the periods presented. LINC’s selected historical balance sheet data at December 31, 2011, 2010 and 2009 and the selected historical statement of income data for the years ended December 31, 2011, 2010 and 2009 have been derived from LINC’s audited consolidated financial statements included elsewhere in this Information Statement. The summary consolidated statements of income data for the thirteen weeks ended March 31, 2012 and April 2, 2011 and summary consolidated balance sheet data as of March 31, 2012 are derived from LINC’s unaudited consolidated interim financial statements included elsewhere in this Information Statement. LINC has prepared the unaudited consolidated interim financial statements on the same basis as its audited financial statements and include, in the opinion of LINC’s management, all adjustments, which include only normal recurring adjustments, necessary to present fairly in all material respects their financial position and results of operations.

The information below should be read in conjunction with the information included under the headings “Selected Historical Consolidated Data of LINC” and “Information about LINC Logistics Company—LINC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included elsewhere in this Information Statement. The results for any interim period are not necessarily indicative of the results that may be expected for the full year. The following historical financial information may not be indicative of LINC’s future performance.

 

		Thirteen weeks ended								Year Ended December 31,
		March 31, 2012				April 2, 2011				2011				2010				2009				2008				2007
		(in thousands, except share and per share amounts and employee and facility counts)
Statements of Income Data:
Revenue		$	80,044			$	69,566			$	290,929			$	245,785			$	177,938			$	247,815			$	299,195
Operating expenses			68,027				58,822				249,287				208,732				160,316				233,413				261,706
Operating income			12,017				10,744				41,642				37,053				17,622				14,402				37,459
Interest expense, net			(808	)			(388	)			(2,215	)			(1,514	)			(1,354	)			(2,071	)			(3,414	)
Income before provision for income taxes			11,209				10,356				39,427				35,539				16,268				12,331				34,075
Provision for income taxes			368				839				3,794				2,574				1,339				1,412				1,361
Income before provision for income taxes		$	10,841			$	9,517			$	35,633			$	32,965			$	14,929			$	10,919			$	32,714
Earnings per share, basic and diluted			0.52				0.46				1.72				1.59				0.72				0.53				1.58
Weighted average shares outstanding			20,753,334				20,753,334				20,753,334				20,753,334				20,753,334				20,753,334				20,753,334
Balance Sheet Data (at end of period):
Cash and cash equivalents		$	4,119			$	6,041			$	4,633			$	3,512			$	1,203			$	4,517			$	422
Total assets		$	85,839			$	76,569			$	74,663			$	68,798			$	70,757			$	80,470			$	97,086
Total debt		$	84,740			$	59,832			$	83,061			$	63,454			$	66,240			$	85,861			$	68,381
Other Data:
Adjusted EBITDA(1)		$	13,568			$	12,283			$	48,150			$	42,749			$	26,064			$	30,194			$	45,953
Cash flow from operations		$	10,202			$	9,641			$	44,537			$	34,387			$	16,892			$	19,145			$	42,992
Capital expenditures		$	1,377			$	980			$	8,559			$	2,661			$	1,655			$	2,726			$	11,110
Cash dividends paid(2)		$	6,143			$	2,522			$	22,790			$	21,316			$	71			$	5,690			$	68,006
Employees at end of period			1,740				1,541				1,721				1,528				1,504				1,904				2,776
Facilities managed at end of period			37				29				37				29				27				24				26

 

(1)

Adjusted EBITDA is presented as a supplemental measure of LINC’s performance. Adjusted EBITDA is defined as net income plus (i) interest expense, net, (ii) provision for income taxes and (iii) depreciation and amortization, or EBITDA, adjusted to eliminate the impact of certain items that LINC does not consider indicative of their ongoing operating performance, including facility closing costs, a change in selected vacation policies, suspended capital market activity and legal settlement. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons LINC considers them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future LINC may incur expenses that are the same as or similar to some of the adjustments in this presentation. Presentation of Adjusted EBITDA should not be construed as an inference that LINC’s future results will be unaffected by unusual or non-recurring items.

 

		Thirteen weeks ended								Year Ended December 31,
		March 31, 2012				April 2, 2011				2011				2010				2009				2008				2007
		(in thousands)
Net income		$	10,841			$	9,517			$	35,633			$	32,965			$	14,929			$	10,919			$	32,714
Provision for income taxes			368				839				3,794				2,574				1,339				1,412				1,361
Interest expense, net			808				388				2,215				1,514				1,354				2,071				3,414
Depreciation and amortization			1,485				1,415				6,094				6,543				6,952				7,432				6,664
EBITDA			13,502				12,159				47,736				43,596				24,574				21,834				44,153
Facility closing costs(a)			66			$	124				414				(847	)			2,590				3,023				—
Change in vacation policy(b)			—				—				—				—				(1,100	)			—				—
Suspended capital market activity(c)			—				—				—				—				—				575				—
Legal settlement(d)			—				—				—				—				—				4,762				1,800
Adjusted EBITDA		$	13,568			$	12,283			$	48,150			$	42,749			$	26,064			$	30,194			$	45,953

 

(a)

Represents costs incurred as a result of LINC’s elections to close and exit selected operations, including, in subsequent years, adjustments to such costs to reflect final settlements or updated assumptions. Closing costs include facility lease costs (net of anticipated sublease revenues or similar offsets), employee severance payments, termination payments to contracted vendors, and other similar expenses. In 2008 and 2009, LINC closed five value-added services operations due to the unprecedented contraction in production capacity by its major automotive customers. In December 2011, seven months after launching five new freight consolidation centers in Europe to support a Tier I automotive supplier’s regional supply chain, LINC decided to close and exit these operations. LINC’s decision followed lower-than anticipated volumes and LINC’s customer’s decision to substantially alter their overall approach to freight transportation.

(b)

Represents a benefit received as a result of changing the roll-over period effective for salaried employees from their anniversary date to a uniform, year-end date.

(c)

Represents expenses incurred as a result of LINC’s initial preparations for an IPO in 2007. These expenses were initially capitalized and included in LINC’s consolidated balance sheet as of December 31, 2007 as prepaid expenses and other current assets. When the IPO effort was postponed due to a decline in the automotive sector, deterioration in economic conditions and the significant downturn in the public equity markets, the costs were then taken as a charge to income for the year ended December 31, 2008. Similar expenses incurred in connection with LINC’s recent IPO efforts totaling $1.9 million are included in prepaid expenses and other current assets in LINC’s consolidated balance sheet as of March 31, 2012.

(d)

Represents expenses accrued in connection with the prospective determination of probable loss amounts in connection with a multi-fatality traffic accident that was likely to exceed insurance limits and which LINC believes is not reflective of ordinary operations.

 

(2)

Includes cash dividends previously paid, and thus does not include the $24.5 million dividend payable or the $25.0 million dividend distribution promissory note that are intended to be paid from the proceeds of the expected debt refinancing as a result of this merger. Also includes state withholding taxes paid on behalf of LINC’s shareholders and treated as a distribution. Does not include $5.0 million in cash dividends paid subsequent to March 31, 2012.

Summary Unaudited Pro Forma Condensed Combined Financial Information (Page 124)

The following table presents a summary of selected unaudited pro forma condensed combined financial and operating data as of and for the periods presented. The selected unaudited pro forma balance sheet data as of March 31, 2012 and the selected unaudited pro forma statements of income data for the thirteen weeks ended March 31, 2012 and April 2, 2011, and for each of the three years in the three-year period ended December 31, 2011 have been derived from LINC’s unaudited pro forma condensed consolidated financial statements, which are included in this Information Statement, and illustrate the effects of Universal’s acquisition of LINC, the termination of LINC’s existence and S-corporation status and acquisition by a C-corporation, the payoff of promissory notes and dividends payable outstanding to LINC’s current and former shareholders (or entities related to them) under previously declared dividends, and the effects of the anticipated borrowings under the new credit facility. The summary historical financial and operating data presented below should be read in conjunction with the “Unaudited Pro Forma Condensed Consolidated Financial Information” and related notes included elsewhere in this Information Statement. The following financial and operating data may not be indicative of Universal’s future performance.

 

		Thirteen weeks ended								Year Ended December 31,
		March 31, 2012				April 2, 2011				2011				2010				2009
		(in thousands, except share and per share amounts and percentages)
Statements of Income Data:
Operating revenues		$	255,890			$	227,194			$	990,672			$	851,715			$	681,136
Operating expenses			238,495				212,620				924,639				799,295				654,495
Income from operations			17,395				14,574				66,033				52,420				26,641
Interest and other non-operating income (expense), net			(536	)			(58	)			(2,398	)			4,575				(2,353	)
Income before provision for income taxes			16,859				14,516				63,635				56,995				24,288
Provision for income taxes			6,572				5,694				25,414				22,323				9,377
Net income		$	10,287			$	8,822			$	38,221			$	34,672			$	14,911
Earnings per common share:
Basic		$	0.34			$	0.29			$	1.27			$	1.14			$	0.49
Diluted		$	0.34			$	0.29			$	1.27			$	1.14			$	0.49
Weighted average number of common shares outstanding:
Basic			30,064				30,159				30,121				30,444				30,509
Diluted			30,064				30,159				30,121				30,444				30,509
Other Financial Data (unaudited):
Pretax margin			6.59	%			6.39	%			6.42	%			6.69	%			3.57	%
EBITDA(1)		$	22,352			$	19,850			$	85,541			$	75,928			$	43,214
Balance Sheet Data (end of period):
Cash and cash equivalents		$	4,837
Total assets			312,401
Lines of credit and long-term debt, including current portion			152,142
Total shareholders’ equity			38,907

 

(1)

EBITDA represents earnings before interest, taxes, depreciation and amortization. Management believes that the presentation of EBITDA provides useful information to investors regarding our results of operations because it assists in analyzing and benchmarking the performance and value of our business. Although management uses EBITDA as a financial measure to assess the performance of our business compared to that of others in our industry, the use of EBITDA is limited because it does not include certain material costs, such as depreciation, amortization and interest, necessary to operate our business. EBITDA is not measured under generally accepted accounting principles and, when analyzing our operating performance, investors should use EBITDA in addition to, not as an alternative for, operating income, net income and cash flows from operating activities. Investors also should note that our presentation of EBITDA may not be comparable to similarly titled measures used by other companies.

EBITDA is calculated in the following manner for each of the periods presented: