U.S. Xpress Enterprises, Inc. Reports Second Quarter 2019 Results

CHATTANOOGA, Tenn.--()--U.S. Xpress Enterprises, Inc. (NYSE:USX) (the “Company”) today announced results for the second quarter of 2019.

Second Quarter 2019 Highlights

  • Operating revenue of $413.9 million compared to $449.8 million in the second quarter of 2018
  • Operating income of $8.8 million compared to $20.0 million in the second quarter of 2018
  • Operating ratio of 97.9% compared to 95.5% in the second quarter of 2018
  • Adjusted operating ratio1, a non-GAAP measure, of 97.5% compared to 93.4% in the second quarter of 2018
  • Net income attributable to controlling interest of $2.7 million, or $0.05 per diluted share, compared to $0.6 million in the second quarter of 2018
  • Adjusted net income attributable to controlling interest1, a non-GAAP measure, of $2.9 million, or $0.06 per diluted share, compared to $11.3 million in the second quarter of 2018

Second Quarter Financial Performance

Three Months Ended June 30, Six Months Ended June 30,

2019

 

2018

2019

 

2018

Operating revenue

$

413,862

$

449,758

$

829,225

$

875,466

Revenue, excluding fuel surcharge

$

371,184

$

402,808

$

746,496

$

785,666

Operating income

$

8,787

$

20,018

$

21,425

$

34,872

Adjusted operating income1

$

9,317

$

26,455

$

25,355

$

41,309

Operating ratio

 

97.9%

 

95.5%

 

97.4%

 

96.0%

Adjusted operating ratio1

 

97.5%

 

93.4%

 

96.6%

 

94.7%

Net income attributable to controlling interest

$

2,672

$

615

$

7,393

$

1,774

Adjusted net income attributable to controlling interest1

$

2,912

$

11,286

$

10,182

$

12,445

Earnings per diluted share

$

0.05

$

0.04

$

0.15

$

0.17

Adjusted earnings per diluted share1

$

0.06

$

0.79

$

0.21

$

1.19

Eric Fuller, President and CEO, commented, “The freight market remained challenging through the second quarter driven by weaker than seasonal demand combined with capacity growth as a result of more favorable market conditions in 2018. This supply - demand imbalance severely pressured spot pricing through the quarter which adversely impacted parts of our business. Looking forward, we expect conditions to firm, as capacity slowly exits the market while at the same time we approach a more seasonally busy time of the year. We believe we have the strategy, management team, revenue base, modern fleet, and capital structure that position us very well to execute upon our initiatives, drive further operational gains, and deliver long term value for our shareholders.”

Enterprise Update

Operating revenue was $413.9 million, a decrease of $35.9 million compared to the second quarter of 2018. Excluding revenue from the Company’s Mexico operations which were discontinued in January 2019, operating revenue decreased $22.4 million. The decrease was primarily attributable to a decrease of $18.9 million in Brokerage revenue and to a lesser extent a 1.4% reduction in average revenue miles per tractor per week.

Operating income for the second quarter of 2019 was $8.8 million compared to $20.0 million in the second quarter of 2018. Adjusted operating income1 for the second quarter of 2019 was $9.3 million, compared to $26.5 million for the 2018 quarter. Operating ratio for the second quarter of 2019 was 97.9% and adjusted operating ratio1 97.5%.

Net income attributable to controlling interest for the second quarter of 2019 was $2.7 million compared to $0.6 million in the prior year quarter. Adjusted net income attributable to controlling interest1 for the second quarter of 2019 was $2.9 million, compared to $11.3 million in the 2018 quarter. Earnings per diluted share were $0.05 for the second quarter of 2019 and adjusted earnings per diluted share1 were $0.06.

Truckload Segment

Three Months Ended June 30, Six Months Ended June 30,

2019

2018

 

2019

2018

Over the road
Average revenue per tractor per week*

$

3,625

$

3,957

$

3,621

$

3,890

Average revenue per mile*

$

1.956

$

2.023

$

1.970

$

1.997

Average revenue miles per tractor per week

 

1,853

 

1,956

 

1,838

 

1,952

Average tractors

 

3,611

 

3,578

 

3,614

 

3,605

Dedicated
Average revenue per tractor per week*

$

4,018

$

3,647

$

3,990

$

3,598

Average revenue per mile*

$

2.355

$

2.234

$

2.346

$

2.209

Average revenue miles per tractor per week

 

1,706

 

1,632

 

1,700

 

1,629

Average tractors

 

2,674

 

2,721

 

2,666

 

2,672

Consolidated
Average revenue per tractor per week*

$

3,792

$

3,823

$

3,777

$

3,771

Average revenue per mile*

$

2.118

$

2.105

$

2.123

$

2.078

Average revenue miles per tractor per week

 

1,791

 

1,816

 

1,779

 

1,814

Average tractors

 

6,285

 

6,299

 

6,280

 

6,277

* Excluding fuel surcharge revenues
The above table excludes revenue, miles and tractors for services performed in Mexico.

Mr. Fuller said, “The more challenging freight market through the second quarter pushed spot pricing down by more than 30% in our OTR division which adversely impacted our OTR results. These headwinds overshadowed what remained a strong contract market where contract rates rose 8%, year over year, in our OTR division. Conversely, our Dedicated division performed well in the second quarter as average revenue per tractor per week grew 10.2% driven by our initiative to improve our customer mix as well as our execution. Of note, Dedicated rates were up 5.4% in the second quarter and the outlook for this division remains positive.”

Mr. Fuller added, “Our drivers remain our most important asset and in an effort to improve driver satisfaction we created a new driver development program. This program provides continuous learning opportunities for our drivers with the goal of providing the knowledge, skills and abilities necessary for a successful career. While still early in its roll out, we are seeing positive results from those drivers who have completed this training versus those who have not. We are optimistic that, overtime, this training will improve our drivers’ satisfaction and retention while also reducing their accident rate and the Company’s insurance expense.”

In the Over-the-Road division, average revenue per tractor per week declined 8.4% compared with the second quarter of 2018. Average revenue per mile decreased 3.3% compared with the 2018 quarter, while average revenue miles per tractor per week decreased 5.3%. The impact on average revenue per tractor per week resulted from the less favorable freight environment.

The Dedicated division’s average revenue per tractor per week increased 10.2% compared to the second quarter of 2018. The increase was primarily the result of a 5.4% increase in average revenue per mile and a 4.5% increase in average revenue miles per tractor per week. The increase in utilization and revenue per mile was the result of successful efforts made in 2018 designed to improve the business mix by allocating capital to new and existing accounts with a better combination of rate and utilization.

Brokerage Segment

Three Months Ended June 30, Six Months Ended June 30,

2019

2018

2019

2018

Brokerage revenue

$

39,457

$

58,361

$

85,701

$

112,902

Gross margin %

 

16.1%

 

12.2%

 

16.9%

 

13.1%

Load Count

 

29,701

 

42,135

 

63,520

 

81,385

The Brokerage segment continues to provide additional selectivity for the Company’s assets to optimize yield while at the same time offering more capacity solutions to customers. Brokerage segment revenue decreased to $39.5 million in the second quarter of 2019 compared to $58.4 million in the second quarter of 2018, on fewer loads and decreased revenue per load. Brokerage operating income was $1.3 million in the second quarter of 2019 as compared to $1.4 million in the year ago quarter.

Liquidity and Capital Resources

As of June 30, 2019, we had $121.0 million of liquidity (defined as cash plus availability under the Company’s revolving credit facility), $436.9 million of net debt (defined as long-term debt, including current maturities, less cash balances), and $239.6 million of total stockholders' equity. Capital expenditures, net of proceeds, related primarily to tractors and trailers were $90.4 million in the first half of 2019.

Outlook

Mr. Fuller commented, “The freight environment has remained under pressure through the summer though we do expect conditions to firm, as capacity slowly exits the market while at the same time we approach a more seasonally busy time of the year. For the full year 2019, we expect our full year adjusted operating ratio1 to be in a range from 95.5% to 97.5%. To provide context, the high end of our full year guidance range assumes that the current market environment as experienced through June and July persists through year end.”

Conference Call

The Company will hold a conference call to discuss its second quarter results at 5:00 p.m. (Eastern Time) on August 1, 2019. The conference call can be accessed live over the by phone dialing 1-877-423-9813 or, for international callers, 1-201-689-8573 and requesting to be joined to the U.S. Xpress Second Quarter 2019 Earnings Conference Call. A replay will be available starting at 8:00 p.m. (Eastern Time) on August 1, 2019, and can be accessed by dialing 1-844-512-2921 or, for international callers, 1-412-317-6671. The passcode for the replay is 13692290. The replay will be available until 11:59 p.m. (Eastern Time) on August 8, 2019.

Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company’s website at investor.usxpress.com. The online replay will remain available for a limited time beginning immediately following the call. Supplementary information for the conference call will also be available on this website.

(1) Non-GAAP Financial Measures

In addition to our net income determined in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’), we evaluate operating performance using certain non-GAAP measures, including Adjusted Operating Ratio, Adjusted Operating Income, Adjusted Net Income Attributable to Controlling Interest, and Adjusted EPS (on a consolidated and, as applicable, segment basis). Management believes the use of non-GAAP measures assists investors and securities analysts in understanding the ongoing operating performance of our business by allowing more effective comparison between periods. Further, management uses non-GAAP Adjusted Operating Ratio, Adjusted Operating Income, Adjusted Net Income Attributable to Controlling Interest, and Adjusted EPS measures on a supplemental basis to remove items that may not be an indicator of performance from period-to-period. The non-GAAP information provided is used by our management and may not be comparable to similar measures disclosed by other companies. The non-GAAP measures used herein have limitations as analytical tools and should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. You should not consider the non-GAAP measures used herein in isolation or as substitutes for analysis of our results as reported under GAAP. Management compensates for these limitations by relying primarily on GAAP results and using non-GAAP financial measures on a supplemental basis.

Pursuant to the requirements of Regulation G and Regulation S-K, we have provided reconciliations of Adjusted Operating Ratio, Adjusted Operating Income, Adjusted Net Income Attributable to Controlling Interest, and Adjusted EPS to the most comparable GAAP financial measures at the end of this press release.

About U.S. Xpress Enterprises

Founded in 1985, U.S. Xpress Enterprises, Inc. is the nation’s fifth largest asset-based truckload carrier by revenue, providing services primarily throughout the United States. We offer customers a broad portfolio of services using our own truckload fleet and third‐party carriers through our non‐asset‐based truck brokerage network. Our modern fleet of tractors is backed up by a team of committed professionals whose focus lies squarely on meeting the needs of our customers and our drivers.

Forward-Looking Statements

This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases such as "expects," "estimates," "projects," "believes," "anticipates," "plans," "intends," “outlook,” “strategy,” “target,” “optimistic,” “focus,” “continue,” “will,” “could,” “should,” “may,” and similar terms and phrases. In this press release, such statements may include, but are not limited to, statements in the "Outlook" section, statements regarding the freight environment, our network efficiency, expected adjusted operating ratio and capital expenditures, the expected impact of our driver initiatives, and the productivity of our operations for the balance of 2019, and any other statements concerning: any projections of earnings, revenues, cash flows, capital expenditures, or other financial items; any statement of plans, strategies, or objectives for future operations; any statements regarding future economic or industry conditions or performance; and any statements of belief and any statements of assumptions underlying any of the foregoing. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those in the forward-looking statements: general economic conditions, including inflation and consumer spending; political conditions and regulations, including future changes thereto; changes in tax laws or in their interpretations and changes in tax rates; future insurance and claims experience, including adverse changes in claims experience and loss development factors, or additional changes in management's estimates of liability based upon such experience and development factors that cause our expectations of insurance and claims expense to be inaccurate or otherwise impacts our results; impact of pending or future legal proceedings; future market for used revenue equipment and real estate; future revenue equipment prices; future capital expenditures, including equipment purchasing and leasing plans and equipment turnover (including expected trade-ins); expected fleet age; future depreciation and amortization; changes in management’s estimates of the need for new tractors and trailers; future ability to generate sufficient cash from operations and obtain financing on favorable terms to meet our significant ongoing capital requirements; our ability to maintain compliance with the provisions of our credit agreement; expected freight environment, including freight demand, rates, capacity, and volumes; future asset utilization; loss of one or more of our major customers; our ability to renew dedicated service offering contracts on the terms and schedule we expect; surplus inventories, recessionary economic cycles, and downturns in customers' business cycles; strikes, work slowdowns, or work stoppages at the Company, customers, ports, or other shipping related facilities; increases or rapid fluctuations in fuel prices, as well as fluctuations in surcharge collection, including, but not limited to, changes in customer fuel surcharge policies and increases in fuel surcharge bases by customers; interest rates, fuel taxes, tolls, and license and registration fees; increases in compensation for and difficulty in attracting and retaining qualified professional drivers and independent contractors; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, and intermodal competitors; regulatory requirements that increase costs, decrease efficiency, or reduce the availability of drivers, including revised hours-of-service requirements for drivers and the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program that implemented new driver standards and modified the methodology for determining a carrier’s Department of Transportation safety rating; future safety performance; our ability to reduce, or control increases in, operating costs; future third-party service provider relationships and availability; execution of the Company’s current business strategy or changes in the Company’s business strategy; the ability of the Company’s infrastructure to support future organic or inorganic growth; our ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations; in relation to exiting our fixed cost investment in U.S.-Mexico cross border business, the actual costs of severance, leased vehicle turn-in, equipment repositioning, and other expenses associated with exiting the operations; the impact of supply and demand on availability and pricing of replacement loads for tractors in our U.S. network; the prices obtained for assets being disposed of; and the timing and amount of deferred consideration collected; our ability to adapt to changing market conditions and technologies; disruptions to our information technology and our inability to implement technology initiatives; costs, diversion of management’s attention, and potential payments made in connection with the multiple class action lawsuits arising out of our IPO; and our ability to remediate several outstanding material weaknesses. Readers should review and consider these factors along with the various disclosures by the Company in its press releases, stockholder reports, and filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.

Condensed Consolidated Income Statements (unaudited)
Three Months Ended June 30, Six Months Ended June 30,
(in thousands, except per share data)

2019

2018

2019

2018

Operating Revenue:
Revenue, excluding fuel surcharge

$

371,184

 

$

402,808

 

$

746,496

 

$

785,666

 

Fuel surcharge

 

42,678

 

 

46,950

 

 

82,729

 

 

89,800

 

Total operating revenue

 

413,862

 

 

449,758

 

 

829,225

 

 

875,466

 

Operating Expenses:
Salaries, wages and benefits

 

130,521

 

 

139,701

 

 

255,084

 

 

272,625

 

Fuel and fuel taxes

 

47,374

 

 

57,704

 

 

94,278

 

 

116,093

 

Vehicle rents

 

18,579

 

 

19,393

 

 

37,555

 

 

39,415

 

Depreciation and amortization, net of (gain) loss

 

24,752

 

 

24,149

 

 

47,814

 

 

48,855

 

Purchased transportation

 

112,579

 

 

118,681

 

 

226,584

 

 

220,457

 

Operating expense and supplies

 

29,968

 

 

29,073

 

 

57,913

 

 

58,864

 

Insurance premiums and claims

 

19,266

 

 

19,165

 

 

43,619

 

 

39,335

 

Operating taxes and licenses

 

3,406

 

 

3,509

 

 

6,579

 

 

6,910

 

Communications and utilities

 

2,185

 

 

2,425

 

 

4,450

 

 

4,891

 

Gain on sale of subsidiary

 

(670

)

 

-

 

 

(670

)

 

-

 

General and other operating

 

17,115

 

 

15,940

 

 

34,594

 

 

33,149

 

Total operating expenses

 

405,075

 

 

429,740

 

 

807,800

 

 

840,594

 

Operating Income

 

8,787

 

 

20,018

 

 

21,425

 

 

34,872

 

Other Expenses (Income):
Interest Expense, net

 

5,296

 

 

12,298

 

 

10,899

 

 

24,956

 

Early extinguishment of debt

 

-

 

 

7,753

 

 

-

 

 

7,753

 

Equity in loss of affiliated companies

 

90

 

 

(119

)

 

179

 

 

177

 

Other, net

 

-

 

 

242

 

 

26

 

 

167

 

 

5,386

 

 

20,174

 

 

11,104

 

 

33,053

 

Income (loss) Before Income Taxes

 

3,401

 

 

(156

)

 

10,321

 

 

1,819

 

Income Tax Provision (Benefit)

 

415

 

 

(1,191

)

 

2,316

 

 

(598

)

Net Income

 

2,986

 

 

1,035

 

 

8,005

 

 

2,417

 

Net Income attributable to non-controlling interest

 

314

 

 

420

 

 

612

 

 

643

 

Net Income attributable to controlling interest

$

2,672

 

$

615

 

$

7,393

 

$

1,774

 

 
Income Per Share
Basic earnings per share

$

0.05

 

$

0.04

 

$

0.15

 

$

0.17

 

Basic weighted average shares outstanding

 

48,742

 

 

14,214

 

 

48,569

 

 

10,321

 

Diluted earnings per share

$

0.05

 

$

0.04

 

$

0.15

 

$

0.17

 

Diluted weighted average shares outstanding

 

49,312

 

 

14,456

 

 

49,184

 

 

10,443

 

Condensed Consolidated Balance Sheets (unaudited)      

June 30,

 

December 31,

(in thousands)

2019

 

2018

Assets      
Current assets:
Cash and cash equivalents

$

          3,560

 

 

$

          9,892

 

Customer receivables, net of allowance of $106 and $59, respectively

 

184,275

 

 

190,254

 

Other receivables

 

20,423

 

 

 

20,430

 

Prepaid insurance and licenses

 

10,420

 

 

11,035

 

Operating supplies

 

7,191

 

 

 

7,324

 

Assets held for sale

 

12,702

 

 

33,225

 

Other current assets

 

18,692

 

 

 

13,374

 

Total current assets

 

257,263

 

 

285,534

 

Property and equipment, at cost

 

939,619

 

 

 

898,530

 

Less accumulated depreciation and amortization

 

(392,420

)

 

(379,813

)

Net property and equipment

 

547,199

 

 

 

518,717

 

Other assets:
Operating lease right-of-use assets

 

200,734

 

 

 

-

 

Goodwill

 

57,708

 

 

57,708

 

Intangible assets, net

 

28,065

 

 

 

28,913

 

Other

 

24,892

 

 

19,615

 

Total other assets

 

311,399

 

 

 

106,236

 

Total assets    

$

   1,115,861

 

$

      910,487

 

Liabilities and Stockholders' Equity       
Current liabilities:
Accounts payable    

$

        61,289

 

 

$

        63,808

 

Book overdraft    

 

9,791

 

 

-

 

Accrued wages and benefits    

 

22,412

 

 

 

24,960

 

Claims and insurance accruals

 

47,334

 

 

47,442

 

Other accrued liabilities    

 

8,737

 

 

 

8,120

 

Liabilities associated with assets held for sale

 

-

 

 

6,856

 

Current portion of operating leases

 

58,162

 

 

 

-

 

Current maturities of long-term debt and finance leases

 

88,490

 

 

113,094

 

Total current liabilities    

 

296,215

 

 

 

264,280

 

Long-term debt and finance leases, net of current maturities    

 

352,010

 

 

312,819

 

Less debt issuance costs

 

(1,211

)

 

 

(1,347

)

Net long-term debt and finance leases

 

350,799

 

 

311,472

 

Deferred income taxes    

 

21,802

 

 

 

19,978

 

Long term liabilities associated with assets held for sale

 

-

 

 

8,353

 

Other long-term liabilities    

 

6,828

 

 

 

7,713

 

Claims and insurance accruals, long-term    

 

58,292

 

 

60,304

 

Noncurrent operating lease liability

 

142,356

 

 

 

-

 

Commitments and contingencies

 

-

 

 

-

 

Stockholders' Equity:      
Common Stock

 

489

 

 

484

 

Additional paid-in capital    

 

248,386

 

 

 

251,742

 

Accumulated deficit

 

(9,942

)

 

(17,335

)

Stockholders' equity 

 

238,933

 

 

 

234,891

 

Noncontrolling interest    

 

636

 

 

3,496

 

Total stockholders' equity 

 

239,569

 

 

 

238,387

 

Total liabilities and stockholders' equity

$

   1,115,861

 

$

      910,487

 

Condensed Consolidated Cash Flow Statements (unaudited)
Six Months Ended June 30,
(in thousands)

2019

2018

Operating activities
Net income

$

8,005

 

$

2,417

 

Adjustments to reconcile net income to net cash provided by operating activities:
Early extinguishment of debt

 

-

 

 

7,753

 

Deferred income tax provision

 

1,824

 

 

(959

)

Depreciation and amortization

 

44,401

 

 

46,792

 

Losses on sale of property and equipment

 

3,413

 

 

2,063

 

Share based compensation

 

1,880

 

 

629

 

Other

 

572

 

 

(5,745

)

Gain on sale of subsidiary

 

(670

)

 

-

 

Changes in operating assets and liabilities
Receivables

 

5,320

 

 

(17,531

)

Prepaid insurance and licenses

 

612

 

 

(504

)

Operating supplies

 

72

 

 

(1,042

)

Other assets

 

(3,288

)

 

(3,777

)

Accounts payable and other accrued liabilities

 

(2,167

)

 

(15,353

)

Accrued wages and benefits

 

(2,401

)

 

4,356

 

Net cash provided by operating activities

 

57,573

 

 

19,099

 

Investing activities
Payments for purchases of property and equipment

 

(105,137

)

 

(62,864

)

Proceeds from sales of property and equipment

 

23,041

 

 

15,355

 

Other

 

-

 

 

(500

)

Proceeds from sale of subsidiary, net of cash

 

(8,259

)

 

-

 

Net cash used in investing activities

 

(90,355

)

 

(48,009

)

Financing activities
Borrowings under lines of credit

 

10,700

 

 

214,432

 

Payments under lines of credit

 

(9,900

)

 

(243,765

)

Borrowings under long-term debt

 

65,704

 

 

244,677

 

Payments of long-term debt and finance leases

 

(51,936

)

 

(427,341

)

Payments of financing costs

 

-

 

 

(4,151

)

Proceeds from IPO, net of issuance costs

 

-

 

 

247,098

 

Tax withholding related to net share settlement of restricted stock awards

 

(44

)

 

-

 

Purchase of noncontrolling interest

 

(8,659

)

 

-

 

Payments of long-term consideration for business acquisition

 

(990

)

 

(1,010

)

Repurchase of membership units

 

-

 

 

(217

)

Book overdraft

 

9,791

 

 

(3,537

)

Net cash provided by financing activities

 

14,666

 

 

26,186

 

Change in cash balances of assets held for sale

 

11,784

 

 

-

 

Net change in cash and cash equivalents

 

(6,332

)

 

(2,724

)

Cash and cash equivalents
Beginning of year

 

9,892

 

 

9,232

 

End of period

$

3,560

 

$

6,508

 

Key Operating Factors & Truckload Statistics (unaudited)

 

Three Months Ended June 30,

 

%

 

Six Months Ended June 30,

 

%

2019

2018

 

Change

 

2019

2018

 

Change

Operating Revenue:
Truckload1

$

331,727

 

$

344,447

 

-3.7

%

$

660,795

 

$

672,764

 

-1.8

%

Fuel Surcharge

 

42,678

 

 

46,950

 

-9.1

%

 

82,729

 

 

89,800

 

-7.9

%

Brokerage

 

39,457

 

 

58,361

 

-32.4

%

 

85,701

 

 

112,902

 

-24.1

%

Total Operating Revenue

$

413,862

 

$

449,758

 

-8.0

%

$

829,225

 

$

875,466

 

-5.3

%

 
Operating Income:
Truckload

$

7,503

 

$

18,590

 

-59.6

%

$

17,344

 

$

31,093

 

-44.2

%

Brokerage

$

1,284

 

$

1,428

 

-10.1

%

$

4,081

 

$

3,779

 

8.0

%

$

8,787

 

$

20,018

 

-56.1

%

$

21,425

 

$

34,872

 

-38.6

%

 
Operating Ratio:
Operating Ratio

 

97.9

%

 

95.5

%

2.5

%

 

97.4

%

 

96.0

%

1.5

%

Adjusted Operating Ratio2

 

97.5

%

 

93.4

%

4.4

%

 

96.6

%

 

94.7

%

2.0

%

 
Truckload Operating Ratio

 

98.0

%

 

95.3

%

2.8

%

 

97.7

%

 

95.9

%

1.9

%

Adjusted Truckload Operating Ratio2

 

97.6

%

 

92.7

%

5.3

%

 

96.8

%

 

94.4

%

2.5

%

Brokerage Operating Ratio

 

96.7

%

 

97.6

%

-0.9

%

 

95.2

%

 

96.7

%

-1.6

%

 
Truckload Statistics:3
Revenue Per Mile1

$

2.118

 

$

2.105

 

0.6

%

$

2.123

 

$

2.078

 

2.2

%

 
Average Tractors -
Company Owned

 

4,548

 

 

4,955

 

-8.2

%

 

4,613

 

 

5,054

 

-8.7

%

Owner Operators

 

1,738

 

 

1,344

 

29.3

%

 

1,667

 

 

1,223

 

36.3

%

Total Average Tractors

 

6,286

 

 

6,299

 

-0.2

%

 

6,280

 

 

6,277

 

0.0

%

 
Average Revenue Miles Per Tractor
Per Week

 

1,791

 

 

1,816

 

-1.4

%

 

1,779

 

 

1,814

 

-1.9

%

 
Average Revenue Per Tractor
Per Week1

$

3,792

 

$

3,823

 

-0.8

%

$

3,777

 

$

3,771

 

0.2

%

 
Total Miles

 

162,217

 

 

163,009

 

-0.5

%

 

319,201

 

 

324,066

 

-1.5

%

 
Total Company Miles

 

114,344

 

 

125,206

 

-8.7

%

 

228,125

 

 

255,532

 

-10.7

%

 
Total Independent Contractor Miles

 

47,873

 

 

37,803

 

26.6

%

 

91,076

 

 

68,534

 

32.9

%

 
Independent Contractor fuel surcharge

 

12,233

 

 

10,514

 

16.3

%

 

22,713

 

 

18,470

 

23.0

%

 
1 Excluding fuel surcharge revenues
2 See GAAP to non-GAAP reconciliation in the schedules following this release
3 Excludes revenue, miles and tractors for services performed in Mexico.
Non-GAAP Reconciliation - Adjusted Operating Income and Adjusted Operating Ratio (unaudited)
 

Three Months Ended June 30,

 

Six Months Ended June 30,

(in thousands)

2019

 

2018

 

2019

 

2018

GAAP Presentation:
Total revenue

$

413,862

 

$

449,758

 

$

829,225

 

$

875,466

 

Total operating expenses

 

(405,075

)

 

(429,740

)

 

(807,800

)

 

(840,594

)

Operating Income

$

8,787

 

$

20,018

 

$

21,425

 

$

34,872

 

Operating ratio

 

97.9

%

 

95.5

%

 

97.4

%

 

96.0

%

 
Non-GAAP Presentation
Total revenue

$

413,862

 

$

449,758

 

$

829,225

 

$

875,466

 

Fuel surcharge

 

(42,678

)

 

(46,950

)

 

(82,729

)

 

(89,800

)

Revenue, excluding fuel surcharge

 

371,184

 

 

402,808

 

 

746,496

 

 

785,666

 

 
Total operating expenses

 

405,075

 

 

429,740

 

 

807,800

 

 

840,594

 

Adjusted for:
Fuel surcharge

 

(42,678

)

 

(46,950

)

 

(82,729

)

 

(89,800

)

Mexico transition costs1

 

(1,200

)

 

-

 

 

(4,600

)

 

-

 

Gain on sale of subsidiary2

 

670

 

 

-

 

 

670

 

 

-

 

IPO related costs3

 

-

 

 

(6,437

)

 

-

 

 

(6,437

)

Adjusted operating expenses

 

361,867

 

 

376,353

 

 

721,141

 

 

744,357

 

Adjusted Operating Income

$

9,317

 

$

26,455

 

$

25,355

 

$

41,309

 

Adjusted operating ratio

 

97.5

%

 

93.4

%

 

96.6

%

 

94.7

%

 
Non-GAAP Reconciliation - Truckload Adjusted Operating Income and Adjusted Operating Ratio (unaudited)
 

Three Months Ended June 30,

 

Six Months Ended June 30,

(in thousands)

2019

 

2018

 

2019

 

2018

Truckload GAAP Presentation:
Total Truckload revenue

$

374,405

 

$

391,397

 

$

743,524

 

$

762,564

 

Total Truckload operating expenses

 

(366,902

)

 

(372,807

)

 

(726,180

)

 

(731,471

)

Truckload Operating Income

$

7,503

 

$

18,590

 

$

17,344

 

$

31,093

 

Truckload Operating ratio

 

98.0

%

 

95.3

%

 

97.7

%

 

95.9

%

 
Truckload Non-GAAP Presentation
Total Truckload revenue

$

374,405

 

$

391,397

 

$

743,524

 

$

762,564

 

Fuel surcharge

 

(42,678

)

 

(46,950

)

 

(82,729

)

 

(89,800

)

Revenue, excluding fuel surcharge

 

331,727

 

 

344,447

 

 

660,795

 

 

672,764

 

 
Total Truckload operating expenses

 

366,902

 

 

372,807

 

 

726,180

 

 

731,471

 

Adjusted for:
Fuel surcharge

 

(42,678

)

 

(46,950

)

 

(82,729

)

 

(89,800

)

Mexico transition costs1

 

(1,200

)

 

-

 

 

(4,600

)

 

-

 

Gain on sale of subsidiary2

 

670

 

 

-

 

 

670

 

 

-

 

IPO related costs3

 

-

 

 

(6,437

)

 

-

 

 

(6,437

)

Truckload Adjusted operating expenses

 

323,694

 

 

319,420

 

 

639,521

 

 

635,234

 

Truckload Adjusted Operating Income

$

8,033

 

$

25,027

 

$

21,274

 

$

37,530

 

Truckload Adjusted operating ratio

 

97.6

%

 

92.7

%

 

96.8

%

 

94.4

%

1 During the second quarter and six months ended June 30, 2019, we incurred expenses related to the exit of our Mexico business totaling $1,200 and $4,600
2During the second quarter we recognized a gain on the sale of our Mexico business
3 During the second quarter, we incurred one time expenses for the IPO related to pay out of our SAR program and deal bonuses totaling $6,437.
Non-GAAP Reconciliation - Adjusted Net Income and EPS (unaudited)
 

Three Months Ended June 30,

 

Six Months Ended June 30,

(in thousands, except per share data)

2019

 

2018

 

2019

 

2018

GAAP: Net Income attributable to controlling interest

$

2,672

 

$

615

 

$

7,393

 

$

1,774

 

Adjusted for:
Income tax benefit

 

415

 

 

(1,191

)

 

2,316

 

 

(598

)

Income (loss) before income taxes attributable to controlling interest

$

3,087

 

$

(576

)

$

9,709

 

$

1,176

 

Mexico transition costs1

 

1,200

 

 

-

 

 

4,600

 

 

-

 

Gain on sale of subsidiary2

 

(670

)

 

-

 

 

(670

)

 

-

 

Debt extinguishment costs in conjunction with IPO3

 

-

 

 

7,753

 

 

-

 

 

7,753

 

IPO-related costs4

 

-

 

 

6,437

 

 

-

 

 

6,437

 

Adjusted income before income taxes

 

3,617

 

 

13,614

 

 

13,639

 

 

15,366

 

Adjusted income tax provision

 

705

 

 

2,328

 

 

3,457

 

 

2,921

 

Non-GAAP: Adjusted Net Income attributable to controlling interest

$

2,912

 

$

11,286

 

$

10,182

 

$

12,445

 

 
GAAP: Earnings per diluted share

$

0.05

 

$

0.04

 

$

0.15

 

$

0.17

 

Adjusted for:
Income tax (benefit) expense attributable to controlling interest

 

0.01

 

 

(0.08

)

 

0.05

 

 

(0.06

)

Income (loss) before income taxes attributable to controlling interest

$

0.06

 

$

(0.04

)

$

0.20

 

$

0.11

 

Mexico transition costs1

 

0.02

 

 

-

 

 

0.09

 

 

-

 

Gain on sale of subsidiary2

 

(0.01

)

 

-

 

 

(0.01

)

 

-

 

Debt extinguishment costs in conjunction with IPO3

 

-

 

 

0.54

 

 

-

 

 

0.74

 

IPO-related costs4

 

-

 

 

0.45

 

 

-

 

 

0.62

 

Adjusted income before income taxes

 

0.07

 

 

0.95

 

 

0.28

 

 

1.47

 

Adjusted income tax provision

 

0.01

 

 

0.16

 

 

0.07

 

 

0.28

 

Non-GAAP: Adjusted Net Income attributable to controlling interest

$

0.06

 

$

0.79

 

$

0.21

 

$

1.19

 

1 During the second quarter and six months ended June 30, 2019, we incurred expenses related to the exit of our Mexico business totaling $1,200 and $4,600, respectively.
2During the second quarter we recognized a gain on the sale of our Mexico business.
3 In connection with the IPO, we recognized an early extinguishment of debt charge related to our then existing term loan.
4 During the second quarter, we incurred one time expenses for the IPO related to pay out of our SAR program and deal bonuses totaling $6,437.

 

Contacts

U.S. Xpress Enterprises, Inc.
Brian Baubach
Sr. Vice President Corporate Finance and Investor Relations
investors@usxpress.com

Contacts

U.S. Xpress Enterprises, Inc.
Brian Baubach
Sr. Vice President Corporate Finance and Investor Relations
investors@usxpress.com