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

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

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