U.S. Xpress Enterprises, Inc. (NYSE: USX) (the “Company”) today announced results for the first quarter of 2020 and provided a COVID-19 update.

COVID – 19 Business Update

  • Unwavering focus on employee health and safety for both driving and non-driving team members – over 95% of Company’s corporate office staff began working from home mid-March, with results showing an increase in productivity and efficiency in many departments
  • The Company’s volumes through April remained consistent primarily as result of the Company’s customer mix
  • The Company remains confident in its current liquidity position and does not anticipate material liquidity constraints

Eric Fuller, President and CEO, commented, “The spread of COVID-19 across our nation has dramatically impacted not only how we work but all aspects of our daily lives. In this period of uncertainty, we are committed to keeping our employees safe and our customers’ products moving across the country. U.S. Xpress provides an essential service to our customers and their customers as millions of Americans depend on us to ship their products and keep their store shelves stocked. To ensure we seamlessly maintain our operations, we have transitioned a majority of our office staff to a work from home environment, distributed protective gear to our drivers and shop personnel and designed shipper and receiver interaction processes for our drivers. We have also implemented procedures to ensure we are effectively communicating with our employees to keep them safe and informed. I am extremely proud of our entire organization and thankful for their tireless efforts during such an extraordinary time.”

Operational Update

Given the rapid on-set and spread of COVID-19, U.S. Xpress moved quickly to enable the Company’s office employees to work remotely starting March 16th and during that week transitioned more than 1,400 employees, or over 95% of the Company’s corporate office staff, to a work from home environment. Since then, non-remote personnel have largely been limited to employees working on-site at customer locations and shop technicians working in Company facilities, all of whom are following strict protocols to ensure their safety.

The Company has instituted policies to facilitate effective communication in this environment. For non-driving employees, the Company ensures multiple daily contacts with direct reports and has developed KPIs, facilitated by U.S. Xpress’ digital capabilities, to measure the Company’s operational effectiveness. The Company has also implemented new processes and support staff to ensure employees have access to necessary medical services as well as ensuring an adequate supply of safety equipment, including masks and gloves, for the Company’s workers who are on the frontlines, and providing regular cleaning and disinfecting of Company facilities. U.S. Xpress’ employees are playing an essential role in the country’s fight against COVID-19 as they work to keep critical supplies moving and store shelves stocked. The Company is working daily with their drivers to keep them informed and safe in this rapidly changing environment.

To further ensure the safety of U.S. Xpress drivers’ and staff, the Company has instituted mandatory temperature checks for drivers prior to entering Company facilities. For new drivers, the Company has leveraged its new driver training program as well as created a virtual orientation program that allows drivers to complete all of their work remotely and, therefore, avoiding a majority of classroom work. This is an attractive innovation for drivers and has positively contributed to the Company’s recruiting efforts.

The investments in technology that U.S. Xpress has implemented have enabled the Company to quickly adapt to this new environment. The Company has digitized and automated many processes which has allowed its employees to successfully work remotely. These investments have also enabled the Company’s workforce to maintain their efficiency and, in some cases, drive improved output and customer satisfaction. While unintended, this is a direct result of the Company’s digital initiatives including the ‘frictionless order’ and represents opportunities for further efficiency gains once the virus is successfully eradicated.

The active support of the entire team enabled U.S. Xpress to handle a sharp increase in demand from the Company’s grocery, consumer products, and home improvement and hardware customers during the early days of the shelter in place orders while transitioning capacity from other customers where volumes declined. Working largely remotely, the Company continued to accept, plan, and deliver over 30,000 loads per week during March, and U.S. Xpress proved the ability to staff and operate effectively using the Company’s technology and active management framework.

Market and Customer Update

U.S. Xpress has a strong and diversified customer base with the Company’s top 25 customers representing 71% of 2019 revenues. At the peak of the COVID-19 crisis, customers representing 96% of the Company’s pre-COVID-19 revenues remained operational, and incremental volumes from those customers more than made up for the non-operational customers.

U.S. Xpress has a strong customer mix of Grocery, E-Commerce, Consumer Products, Discount Retail, and Home Improvement, with little exposure to automotive, manufacturing, and restaurants. The Company has not seen a drop in total load volume to date through April; however, the Company has experienced a sequential decline in spot rates compared with the first quarter of 2020.

Liquidity and Capital Resources

Due to uncertainties regarding the depth and duration of the economic impact of the COVID-19 crisis, as well as the impact of re-starting various components of the global supply chain at different times, U.S. Xpress has considered many different scenarios, including those that would entail a significant multi-quarter degradation of business conditions across the Company’s customer base. Based on this analysis, the Company is managing the business to prudently control expenses and to ensure excess liquidity even if operating and financial results are significantly and negatively impacted for an extended period.

During the quarter, the Company proactively closed on a new five-year $250 million credit facility. The former facility was fully paid off with proceeds from the new facility and contemporaneous real estate and equipment financings. The new facility lowers the Company’s interest rate while increasing its flexibility. The new facility has a single covenant which is a fixed charge coverage, which is tested only if available borrowing falls below a threshold amount which is less than the greater of $20 million or 10% of the facility. Available credit under the facility is the lesser of the facility size or a borrowing base related to eligible accounts, equipment, and real estate.

At the end of the first quarter 2020, the Company had $96.3 million of liquidity (defined as cash plus availability under the Company’s revolving credit facility), $438.5 million of net debt (defined as long-term debt, including current maturities, less cash balances), and $222.8 million of total stockholders' equity. The Company does not anticipate material liquidity constraints or any issues with its ongoing ability to remain in compliance with its revolving credit facility.

The Company continues to evaluate its planned capital expenditures and now estimates 2020 net capital expenditures to approximate $100 to $120 million for the full year of 2020, which includes an approximate $20 million transaction that carried over from the 4th quarter of 2019. The reduction from the Company’s prior estimate relates primarily to a deferral of a small quantity of planned tractor replacements combined with a reduction in the planned number of new trailer deliveries for the balance of the year. The Company expects to finance 100% of the acquisition price of new revenue equipment capital expenditures with finance leases or secured equipment notes, with no use of cash or revolver liquidity. The Company will continue to monitor market conditions and may further reduce its planned capital expenditures as prudent. First quarter 2020 net capital expenditures were $67.1 million.

First Quarter 2020 Financial Highlights

  • Operating revenue of $432.6 million compared to $415.4 million in the first quarter of 2019
  • Operating loss of $3.7 million compared to operating income of $12.6 million in the first quarter of 2019
  • Operating ratio of 100.8% compared to 97.0% in the first quarter of 2019
  • Net loss attributable to controlling interest of $9.2 million, or $0.19 per diluted share, included a $2.0 million, or $0.04 per share, loss on sale of an equity method investment compared to Net income attributable to controlling interest of $4.7 million in the first quarter of 2019
  • Adjusted net loss attributable to controlling interest, a non-GAAP measure, of $7.2 million, or $.15 per diluted share, compared to Adjusted net income of $7.3 million in the first quarter of 2019

First Quarter Financial Performance

 

Quarter Ended March 31,

2020

 

2019

Operating revenue

$

432,568

 

$

415,363

 

Revenue, excluding fuel surcharge

$

392,820

 

$

375,312

 

Operating income (loss)

$

(3,668

)

$

12,638

 

Adjusted operating income (loss)1

$

(3,668

)

$

16,038

 

Operating ratio

 

100.8

%

 

97.0

%

Adjusted operating ratio1

 

100.9

%

 

95.7

%

Net income (loss) attributable to controlling interest

$

(9,216

)

$

4,721

 

Adjusted net income (loss) attributable to controlling interest1

$

(7,216

)

$

7,312

 

Earnings (losses) per diluted share

$

(0.19

)

$

0.10

 

Adjusted earnings (losses) per diluted share1

$

(0.15

)

$

0.15

 

1 See GAAP to non-GAAP reconciliation in the schedules following this release

Mr. Fuller noted, “The truckload freight environment has been lackluster for several quarters. Prior to the outbreak of COVID-19, we were seeing early signs of a broad market improvement. After the outbreak, during March, freight volumes and spot market pricing ramped up in response to the demand associated with consumer stockpiling and inventory restocking. While the outlook is uncertain, we believe we are well positioned as less than 4% of our revenues were generated by customers that closed during the peak of the pandemic and we did not experience a drop off in volumes.”

Enterprise Update

Operating revenue was $432.6 million, an increase of $17.2 million compared to the first quarter of 2019. The increase was primarily attributable to increased volumes in the Company’s Truckload division and an increase of $4.3 million in Brokerage revenue.

Operating loss for the first quarter of 2020 was $3.7 million compared to operating income of $12.6 million in the first quarter of 2019. Operating ratio for the first quarter of 2020 was 100.8% compared to 97.0% in the prior year quarter.

Net loss attributable to controlling interest for the first quarter of 2020 was $9.2 million compared to net income attributable to controlling interest of $4.7 million in the prior year quarter. The first quarter of 2020 included a $2.0 million loss on sale of an equity method investment. The Company’s adjusted net loss attributable to controlling interest excluding this charge was $7.2 million or $.15 per share.

Truckload Segment

 

Quarter Ended March 31,

2020

2019

Over-the-road Average revenue per tractor per week1

$

3,463

$

3,616

Average revenue per mile1

$

1.871

$

1.985

Average revenue miles per tractor per week

 

1,851

 

1,822

Average tractors

 

3,835

 

3,617

Dedicated Average revenue per tractor per week1

$

4,068

$

3,961

Average revenue per mile1

$

2.376

$

2.337

Average revenue miles per tractor per week

 

1,712

 

1,695

Average tractors

 

2,703

 

2,658

Consolidated Average revenue per tractor per week1

$

3,713

$

3,762

Average revenue per mile1

$

2.070

$

2.128

Average revenue miles per tractor per week

 

1,794

 

1,768

Average tractors

 

6,538

 

6,275

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

Mr. Fuller said, “Our Dedicated division continued to perform very well in the first quarter having delivered its fourth consecutive quarter of record productivity. We were pleased that average revenue per tractor per week remained above $4,000, while we grew the truck count in this division by 1.7% year over year. The execution in Dedicated continues to be outstanding and we will continue to grow the business over time as attractive opportunities arise.”

In the Over-the-Road division, the persistent oversupply of tractors relative to market demand continued to pressure spot pricing lower by more than 10% compared to the prior year quarter. Contract revenue per mile trended negative year over year by approximately 3.7%. Average revenue per tractor per week declined 4.2% compared with the first quarter of 2019. Average revenue per mile decreased 5.7% compared with the 2019 quarter, while average revenue miles per tractor per week increased 1.6%.

The Dedicated division’s average revenue per tractor per week increased $107 per tractor per week, or 2.7% compared to the first quarter of 2019 on a 1.7% increase in average revenue per mile and higher miles per tractor. The Company continued to see consistent results in its Dedicated division. The fluctuations in volume in the general freight market and in specific industries have not negatively impacted the volumes of the Company’s major Dedicated accounts, which are concentrated in the discount retail and grocery market sectors.

Brokerage Segment

 

Quarter Ended March 31,

2020

 

2019

Brokerage revenue

$

50,476

 

$

46,244

 

Gross margin %

 

3.7

%

 

17.5

%

Load Count

 

43,493

 

 

33,819

 

 

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 increased to $50.5 million in the first quarter of 2020 compared to $46.2 million in the first quarter of 2019, primarily as a result of increased load count partially offset by decreased revenue per load. Brokerage operating loss was $4.9 million in the first quarter of 2020 as compared to operating income of $2.8 million in the year ago quarter.

Outlook

Due to the economic uncertainty associated with COVID-19 and the associated impact on shippers, consumers, competitors, supply chains, financial markets, and the Company’s employees, U.S. Xpress is not offering guidance regarding a range of expected earnings per share or similar measures for future quarters. However, the Company does expect to have sufficient sources of liquidity to fund its operations through 2020 and beyond even under an extended economic downturn.

Conference Call

The Company will hold a conference call to discuss its first quarter results at 8:30 a.m. (Eastern Time) on April 30, 2020. The conference call can be accessed live over the by phone dialing 1-855-327-6837 or, for international callers, 1-631-891-4304 and requesting to be joined to the U.S. Xpress First Quarter 2020 Earnings Conference Call. A replay will be available starting at 11:30 a.m. (Eastern Time) on April 30, 2020, and can be accessed by dialing 1-844-512-2921 or, for international callers, 1-412-317-6671. The passcode for the replay is 10009315. The replay will be available until 11:59 p.m. (Eastern Time) on May 7, 2020.

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,” “optimistic,” “will,” “could,” “should,” “may,” “focus,” “seek,” “potential,” “continue,” “goal,” “target,” “objective,” derivations thereof, 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, expected margins including operating ratio or adjusted operating ratio, the expected impact of our driver, frictionless order and other initiatives, and any other statements concerning: any projections of earnings, revenues, cash flows, capital expenditures, compliance with financial covenants, or other financial items; any statement of plans, strategies, or objectives for future operations; any statements regarding future economic or industry conditions or performance; any statements regarding our responses to COVID-19 and the associated economic conditions; 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); 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; 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, intermodal, and brokerage (including digital brokerage) 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; our ability to adapt to changing market conditions and technologies, including the future use of autonomous tractors; disruptions to our information technology; the cost of and our ability to effectively and efficiently implement technology initiatives; costs, diversion of management’s attention, and potential payments made in connection with the multiple class action lawsuits a stockholder derivative lawsuit arising out of our IPO; changes in methods of determining LIBOR or replacement of LIBOR; credit, reputational and relationship risks of certain of our current and former equity investments; risks arising from our Mexican operations; our ability to maintain effective internal controls without material weaknesses, as well as remediate the existing material weakness; and the impact of the recent coronavirus outbreak or other similar outbreaks 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)

Quarter Ended March 31,

(in thousands, except per share data)

2020

 

2019

Operating Revenue: Revenue, excluding fuel surcharge

$

392,820

 

$

375,312

Fuel surcharge

 

39,748

 

 

40,051

Total operating revenue

 

432,568

 

 

415,363

Operating Expenses: Salaries, wages and benefits

 

135,394

 

 

124,563

Fuel and fuel taxes

 

40,323

 

 

46,904

Vehicle rents

 

21,877

 

 

18,976

Depreciation and amortization, net of (gain) loss

 

25,803

 

 

23,062

Purchased transportation

 

129,754

 

 

114,005

Operating expense and supplies

 

29,674

 

 

27,945

Insurance premiums and claims

 

26,023

 

 

24,353

Operating taxes and licenses

 

3,677

 

 

3,173

Communications and utilities

 

2,452

 

 

2,265

General and other operating

 

21,259

 

 

17,479

Total operating expenses

 

436,236

 

 

402,725

Operating Income (Loss)

 

(3,668

)

 

12,638

Other Expenses (Income): Interest Expense, net

 

5,421

 

 

5,603

Equity in loss of affiliated companies

 

-

 

 

89

Other, net

 

2,000

 

 

26

 

7,421

 

 

5,718

Income (Loss) Before Income Taxes

 

(11,089

)

 

6,920

Income Tax Provision (Benefit)

 

(1,857

)

 

1,901

Net Income (Loss)

 

(9,232

)

 

5,019

Net Income (Loss) attributable to non-controlling interest

 

(16

)

 

298

Net Income (Loss) attributable to controlling interest

$

(9,216

)

$

4,721

  Income (Loss) Per Share Basic earnings (losses) per share

$

(0.19

)

$

0.10

Basic weighted average shares outstanding

 

49,217

 

 

48,394

Diluted earnings (losses) per share

$

(0.19

)

$

0.10

Diluted weighted average shares outstanding

 

49,217

 

 

49,391

    Condensed Consolidated Balance Sheets (unaudited)

March 31,

 

December 31,

(in thousands)

2020

 

2019

Assets Current assets: Cash and cash equivalents

$

5,626

 

$

5,687

 

Customer receivables, net of allowance of $36 and $63, respectively

 

186,009

 

 

183,706

 

Other receivables

 

16,040

 

 

15,253

 

Prepaid insurance and licenses

 

17,110

 

 

11,326

 

Operating supplies

 

7,344

 

 

7,193

 

Assets held for sale

 

15,570

 

 

17,732

 

Other current assets

 

15,945

 

 

15,831

 

Total current assets

 

263,644

 

 

256,728

 

Property and equipment, at cost

 

934,871

 

 

880,101

 

Less accumulated depreciation and amortization

 

(400,452

)

 

(388,318

)

Net property and equipment

 

534,419

 

 

491,783

 

Other assets: Operating lease right-of-use assets

 

280,106

 

 

276,618

 

Goodwill

 

57,708

 

 

57,708

 

Intangible assets, net

 

26,789

 

 

27,214

 

Other

 

30,865

 

 

30,058

 

Total other assets

 

395,468

 

 

391,598

 

Total assets

$

1,193,531

 

$

1,140,109

 

Liabilities and Stockholders' Equity Current liabilities: Accounts payable

$

79,012

 

$

68,918

 

Book overdraft

 

3,689

 

 

1,313

 

Accrued wages and benefits

 

25,955

 

 

24,110

 

Claims and insurance accruals

 

48,734

 

 

51,910

 

Other accrued liabilities

 

6,431

 

 

9,127

 

Current portion of operating leases

 

68,021

 

 

69,866

 

Current maturities of long-term debt and finance leases

 

81,700

 

 

80,247

 

Total current liabilities

 

313,542

 

 

305,491

 

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

 

362,722

 

 

315,797

 

Less debt issuance costs

 

(324

)

 

(1,223

)

Net long-term debt and finance leases

 

362,398

 

 

314,574

 

Deferred income taxes

 

18,810

 

 

20,692

 

Other long-term liabilities

 

4,852

 

 

5,249

 

Claims and insurance accruals, long-term

 

59,466

 

 

56,910

 

Noncurrent operating lease liability

 

211,694

 

 

206,357

 

Commitments and contingencies

 

-

 

 

-

 

Stockholders' Equity: Common Stock

 

493

 

 

490

 

Additional paid-in capital

 

251,862

 

 

250,700

 

Accumulated deficit

 

(30,198

)

 

(20,982

)

Stockholders' equity

 

222,157

 

 

230,208

 

Noncontrolling interest

 

612

 

 

628

 

Total stockholders' equity

 

222,769

 

 

230,836

 

Total liabilities and stockholders' equity

$

1,193,531

 

$

1,140,109

 

    Condensed Consolidated Cash Flow Statements (unaudited)

Quarter Ended March 31,

(in thousands)

2020

 

2019

Operating activities Net income

$

(9,232

)

$

5,019

 

Adjustments to reconcile net income to net cash provided by operating activities: Deferred income tax provision

 

(1,882

)

 

1,407

 

Depreciation and amortization

 

22,597

 

 

21,833

 

Losses on sale of property and equipment

 

3,206

 

 

1,229

 

Share based compensation

 

836

 

 

856

 

Other

 

2,652

 

 

308

 

Changes in operating assets and liabilities Receivables

 

(3,183

)

 

3,560

 

Prepaid insurance and licenses

 

(5,784

)

 

(4,761

)

Operating supplies

 

(151

)

 

(285

)

Other assets

 

386

 

 

383

 

Accounts payable and other accrued liabilities

 

8,788

 

 

(2,844

)

Accrued wages and benefits

 

1,845

 

 

(1,226

)

Net cash provided by (used in) operating activities

 

20,078

 

 

25,479

 

Investing activities Payments for purchases of property and equipment

 

(76,761

)

 

(36,604

)

Proceeds from sales of property and equipment

 

9,650

 

 

13,115

 

Proceeds from sale of subsidiary, net of cash

 

-

 

 

(9,002

)

Other

 

(2,000

)

 

-

 

Net cash used in investing activities

 

(69,111

)

 

(32,491

)

Financing activities Borrowings under lines of credit

 

147,654

 

 

-

 

Payments under lines of credit

 

(70,654

)

 

-

 

Borrowings under long-term debt

 

142,644

 

 

14,355

 

Payments of long-term debt and finance leases

 

(171,266

)

 

(31,128

)

Payments of financing costs

 

(1,255

)

 

-

 

Tax withholding related to net share settlement of restricted stock awards

 

(91

)

 

(39

)

Payments of long-term consideration for business acquisition

 

(1,000

)

 

(990

)

Proceeds from long-term consideration for sale of subsidiary

 

144

 

 

-

 

Proceeds from issuance of common stock under ESPP

 

420

 

 

-

 

Book overdraft

 

2,376

 

 

5,233

 

Net cash provided by (used in) financing activities

 

48,972

 

 

(12,569

)

Change in cash balances of assets held for sale

 

-

 

 

11,784

 

Net change in cash and cash equivalents

 

(61

)

 

(7,797

)

Cash and cash equivalents Beginning of year

 

5,687

 

 

9,892

 

End of period

$

5,626

 

$

2,095

 

    Key Operating Factors & Truckload Statistics (unaudited)  

Quarter Ended March 31,

 

%

2020

 

2019

 

Change

Operating revenue: Truckload1

$

342,344

 

$

329,068

 

4.0

%

Fuel surcharge

 

39,748

 

 

40,051

 

-0.8

%

Brokerage

 

50,476

 

 

46,244

 

9.2

%

Total operating revenue

$

432,568

 

$

415,363

 

4.1

%

  Operating income (loss): Truckload

$

1,200

 

$

9,842

 

-87.8

%

Brokerage

$

(4,868

)

$

2,796

 

-274.1

%

$

(3,668

)

$

12,638

 

-129.0

%

  Operating ratio: Operating ratio

 

100.8

%

 

97.0

%

4.0

%

Adjusted operating ratio2

 

100.9

%

 

95.7

%

5.4

%

  Truckload operating ratio

 

99.7

%

 

97.3

%

2.4

%

Truckload adjusted operating ratio2

 

99.6

%

 

96.0

%

3.8

%

Brokerage operating ratio

 

109.6

%

 

94.0

%

16.7

%

  Truckload Statistics:3 Revenue per mile1

$

2.070

 

$

2.128

 

-2.7

%

  Average tractors - Company owned

 

4,747

 

 

4,679

 

1.5

%

Independent contractors

 

1,791

 

 

1,596

 

12.2

%

Total average tractors

 

6,538

 

 

6,275

 

4.2

%

  Average revenue miles per tractor per week

 

1,794

 

 

1,768

 

1.5

%

  Average revenue per tractor per week1

$

3,713

 

$

3,762

 

-1.3

%

  Total miles

 

169,187

 

 

156,984

 

7.8

%

  Total company miles

 

118,126

 

 

113,781

 

3.8

%

  Total independent contractor miles

 

51,061

 

 

43,203

 

18.2

%

  Independent contractor fuel surcharge

 

11,211

 

 

10,480

 

7.0

%

  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)  

Quarter Ended March 31,

(in thousands)

2020

2019

GAAP Presentation: Total revenue

$

432,568

 

$

415,363

 

Total operating expenses

 

(436,236

)

 

(402,725

)

Operating income (loss)

$

(3,668

)

$

12,638

 

Operating ratio

 

100.8

%

 

97.0

%

  Non-GAAP Presentation: Total revenue

$

432,568

 

$

415,363

 

Fuel surcharge

 

(39,748

)

 

(40,051

)

Revenue, excluding fuel surcharge

 

392,820

 

 

375,312

 

  Total operating expenses

 

436,236

 

 

402,725

 

Adjusted for: Fuel surcharge

 

(39,748

)

 

(40,051

)

Mexico transition costs1

 

-

 

 

(3,400

)

Adjusted operating expenses

 

396,488

 

 

359,274

 

Adjusted operating income (loss)

$

(3,668

)

$

16,038

 

Adjusted operating ratio

 

100.9

%

 

95.7

%

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

Quarter Ended March 31,

(in thousands)

2020

2019

Truckload GAAP Presentation: Truckload revenue

$

382,092

 

$

369,119

 

Truckload operating expenses

 

(380,892

)

 

(359,277

)

Truckload operating income

$

1,200

 

$

9,842

 

Truckload operating ratio

 

99.7

%

 

97.3

%

  Truckload Non-GAAP Presentation: Truckload revenue

$

382,092

 

$

369,119

 

Fuel surcharge

 

(39,748

)

 

(40,051

)

Revenue, excluding fuel surcharge

 

342,344

 

 

329,068

 

  Truckload operating expenses

 

380,892

 

 

359,277

 

Adjusted for: Fuel surcharge

 

(39,748

)

 

(40,051

)

Mexico transition costs1

 

-

 

 

(3,400

)

Truckload adjusted operating expenses

 

341,144

 

 

315,826

 

Truckload adjusted operating income

$

1,200

 

$

13,242

 

Truckload adjusted operating ratio

 

99.6

%

 

96.0

%

1 During the first quarter, we incurred expenses related to the exit of our Mexico business totaling $3,400.     Non-GAAP Reconciliation - Adjusted Net Income and EPS (unaudited)  

Quarter Ended March 31,

(in thousands, except per share data)

2020

2019

GAAP: Net income attributable to controlling interest

$

(9,216

)

$

4,721

Adjusted for: Income tax provision (benefit)

 

(1,857

)

 

1,901

Income (loss) before income taxes attributable to controlling interest

$

(11,073

)

$

6,622

Loss on sale of equity method investments1

 

2,000

 

 

-

Mexico transition costs2

 

-

 

 

3,400

Adjusted income (loss) before income taxes

 

(9,073

)

 

10,022

Adjusted income tax provision (benefit)

 

(1,857

)

 

2,710

Non-GAAP: Adjusted net income (loss) attributable to controlling interest

$

(7,216

)

$

7,312

  GAAP: Earnings (losses) per diluted share

$

(0.19

)

$

0.10

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

 

(0.04

)

 

0.03

Income (loss) before income taxes attributable to controlling interest

$

(0.23

)

$

0.13

Loss on sale of equity method investments1

 

0.04

 

 

-

Mexico transition costs2

 

-

 

 

0.07

Adjusted income (loss) before income taxes

 

(0.19

)

 

0.20

Adjusted income tax provision (benefit)

 

(0.04

)

 

0.05

Non-GAAP: Adjusted net income (loss) attributable to controlling interest

 

(0.15

)

$

0.15

1During the first quarter of 2020, we incurred loss on sale related to a equity method investment in a former wholly owned subsidiary 2 During the first quarter, we incurred expenses related to the exit of our Mexico business totaling $3,400.  

 

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

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