The accompanying unaudited consolidated financial statements of Universal Logistics Holdings, Inc. and its wholly owned subsidiaries (“Universal”) have been prepared by the Company’s management. In these notes, the terms “us,” “we,” “our,” or the “Company” refer to Universal and its consolidated subsidiaries. In the opinion of management, the unaudited consolidated financial statements include all normal recurring adjustments necessary to present fairly the information required to be set forth therein. All intercompany transactions and balances have been eliminated in consolidation. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, should be read in conjunction with the consolidated financial statements as of December 31, 2025 and 2024 and for each of the years in the three-year period ended December 31, 2025 included in the Company’s Form 10-K filed with the Securities and Exchange Commission. The preparation of the consolidated financial statements requires the use of management’s estimates. Actual results could differ from those estimates, and operating results for the thirteen and twenty-six weeks ended July 4, 2026 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2026.

Our fiscal year ends on December 31 and consists of four quarters, each with thirteen weeks. There were no material changes in significant accounting policies from those described in the Form 10-K, other than as otherwise disclosed in these notes to unaudited consolidated financial statements.

The Company made certain immaterial reclassifications to items in its prior financial statements so that their presentation is consistent with the format in the financial statements for the period ended July 4, 2026. These reclassifications, however, had no effect on reported consolidated net income, comprehensive income, earnings per common share, cash flows, total assets or stockholders’ equity as previously reported.

During the second quarter of 2026, the Company identified certain triggering events related to a group of tractors that are no longer expected to be utilized in revenue-generating activities over their remaining useful life. The Company evaluated this asset group in accordance with ASC 360 Property, Plant, and Equipment and concluded that an impairment was present. The aggregate carrying value of the asset group was $9.4 million with an estimated fair value of $5.5 million. The fair value of the tractor group was based on market data for comparable equipment. As a result of the assessment, during the thirteen weeks ended July 4, 2026, the Company recognized a non-cash impairment charge of $3.9 million in the other non-reportable segment.

Current Economic Conditions

The Company makes estimates and assumptions that affect reported amounts and disclosures included in its financial statements and accompanying notes and assesses certain accounting matters that require consideration of forecasted financial information. The Company's assumptions about future conditions important to these estimates and assumptions are subject to uncertainty, including softness in freight demand, continuing weakness in certain industrial and automotive end markets, labor availability and wage pressures, elevated interest rates and borrowing costs, and volatility in fuel, insurance, equipment and maintenance costs. These factors may adversely affect customer demand, operating margins, capital expenditures, asset utilization, liquidity and the valuation of certain long-lived assets. Actual results could differ materially from the Company’s estimates and assumptions.