U.S. Xpress Enterprises, Inc. (NYSE:USX) (the “Company”) today announced results for the second quarter of 2020.

Second Quarter 2020 Financial Highlights

  • Operating revenue of $422.5 million compared to $413.9 million in the second quarter of 2019
  • Operating income of $16.3 million compared to $8.8 million in the second quarter of 2019
  • Operating ratio of 96.1% compared to 97.9% in the second quarter of 2019
  • Adjusted operating ratio1, a non-GAAP measure, of 95.9% compared to 97.5% in the second quarter of 2019
  • Net income attributable to controlling interest of $9.5 million, or $0.18 per diluted share, compared to $2.7 million in the second quarter of 2019, or $0.05 per diluted share

Second Quarter Financial Performance

Quarter Ended June 30,

 

Six Months Ended June 30,

2020

2019

 

2020

2019

Operating revenue

$

422,477

 

$

413,862

 

$

855,045

 

$

829,225

 

Revenue, excluding fuel surcharge

$

393,964

 

$

371,184

 

$

786,784

 

$

746,496

 

Operating income

$

16,277

 

$

8,787

 

$

12,609

 

$

21,425

 

Adjusted operating income1

$

16,277

 

$

9,317

 

$

12,609

 

$

25,355

 

Operating ratio

 

96.1

%

 

97.9

%

 

98.5

%

 

97.4

%

Adjusted operating ratio1

 

95.9

%

 

97.5

%

 

98.4

%

 

96.6

%

Net income attributable to controlling interest

$

9,498

 

$

2,672

 

$

282

 

$

7,393

 

Adjusted net income attributable to controlling interest1

$

9,498

 

$

2,912

 

$

2,282

 

$

10,182

 

Earnings per diluted share

$

0.18

 

$

0.05

 

$

(0.00

)

$

0.15

 

Adjusted earnings per diluted share1

$

0.18

 

$

0.06

 

$

0.04

 

$

0.21

 

Eric Fuller, President and CEO, commented, “I am very pleased with our second quarter results as we are beginning to see the tangible, financial benefits of our strategic initiatives focused on utilizing technology to improve our processes, accelerate the velocity of our business, improve our customers’ and drivers’ satisfaction, and lower our costs. The approximate 500 basis points of sequential margin improvement we achieved exceeded normal seasonality. The successful launch of our digital fleet, ongoing success in reducing overhead costs, better safety performance, and lower fuel costs more than offset a sequential decrease in revenue per mile in our Over-the-Road division as there continued to be excess tractor capacity relative to freight demand in the market for a majority of the quarter due in part to COVID-19.”

Mr. Fuller continued, “A major digital initiative that we have been working on over the last two years has been the development, launch, and ramp of our digital fleet. This fleet is largely recruited, planned, dispatched, and managed using artificial intelligence and digital platforms. We developed the concept as a hypothesis in 2018 based in part on the business models of the digital freight brokerages. During 2019, we began building our technology leadership and teams to construct the necessary databases, applications, and processes to launch a pilot fleet with a small number of trucks in the fourth quarter of 2019. The test was successful and we expanded the pilot fleet to approximately 100 trucks in the first quarter. Given the positive results of the first quarter pilot we moved to a full production model, scaling the business to approximately 400 trucks in the second quarter of 2020. Phase one of our plan is to convert a total of 900 Over-the-Road solo trucks, with the lowest returns, to our digital platform over the next few quarters. Phase two of our plan will be to potentially convert an additional 1,200 trucks over the next couple of years. While the conversion will not be linear, we expect our margins to expand further.”

Enterprise Update

Operating revenue was $422.5 million, an increase of $8.6 million compared to the second quarter of 2019. The increase was primarily attributable to increased revenues in the Company’s Truckload division of $16.2 million, an increase of $6.6 million in Brokerage revenue, and decreased fuel surcharge revenues of $14.2 million. Excluding the impact of fuel surcharges, second quarter revenue increased $22.8 million to $394.0 million, an increase of 6.1% as compared to the prior year quarter.

Operating income for the second quarter of 2020 was $16.3 million which compares favorably to the $8.8 million in the second quarter of 2019. Operating ratio for the second quarter of 2020 was 96.1% compared to 97.9% in the prior year quarter.

Net income attributable to controlling interest for the second quarter of 2020 was $9.5 million compared to $2.7 million in the prior year quarter. Adjusted net income attributable to controlling interest1 for the second quarter of 2020 was $9.5 million, compared to $2.9 million in the 2019 quarter. Earnings per diluted share were $0.18 for the second quarter of 2020 and adjusted earnings per diluted share1 were $0.18.

Truckload Segment

Quarter Ended June 30,

 

Six Months Ended June 30,

2020

2019

 

2020

2019

Over the road Average revenue per tractor per week*

$

3,558

$

3,625

$

3,511

$

3,621

Average revenue per mile*

$

1.855

$

1.956

$

1.863

$

1.970

Average revenue miles per tractor per week

 

1,918

 

1,853

 

1,884

 

1,838

Average tractors

 

3,825

 

3,611

 

3,830

 

3,614

Dedicated Average revenue per tractor per week*

$

4,122

$

4,018

$

4,095

$

3,990

Average revenue per mile*

$

2.351

$

2.355

$

2.363

$

2.346

Average revenue miles per tractor per week

 

1,753

 

1,706

 

1,733

 

1,700

Average tractors

 

2,739

 

2,674

 

2,721

 

2,666

Consolidated Average revenue per tractor per week*

$

3,793

$

3,792

$

3,753

$

3,777

Average revenue per mile*

$

2.051

$

2.118

$

2.061

$

2.123

Average revenue miles per tractor per week

 

1,849

 

1,791

 

1,821

 

1,779

Average tractors

 

6,564

 

6,285

 

6,551

 

6,280

* Excluding fuel surcharge revenues

The Truckload segment achieved an operating ratio of 94.6% and an adjusted operating ratio1 of 94.1% for the second quarter of 2020, a 340 and 350 basis point improvement, respectively, compared to the operating ratio of 98.0% and the adjusted operating ratio1 of 97.6% achieved in the second quarter of 2019. This improvement was achieved despite a 3.2% decline in average revenue per mile as the Company continued to execute on its digital initiatives while maintaining a focus on reducing fixed and variable costs.

In the Over-the-Road division, the persistent oversupply of tractors relative to market demand continued to pressure spot pricing lower compared to the 2019 quarter. Contract revenue per mile was down year over year by approximately 5%. Average revenue per tractor per week declined 1.8% compared with the second quarter of 2019. Average revenue per mile decreased 5.2% compared with the 2019 quarter.

Mr. Fuller added, “The Over-the-Road division experienced substantial improvement in the second quarter driven by the conversion of an additional 300 of our lowest performing tractors into our digital fleet. This conversion helped drive our OTR utilization up by 3.5%, as compared to the first quarter of 2020, while contributing to a reduction in both our fixed and variable costs.”

The Dedicated division’s average revenue per tractor per week increased $104 per tractor per week, or 2.6% compared to the second quarter of 2019 on relatively flat average revenue per mile and higher miles per tractor. The fluctuations in volume in the general freight market and in specific industries related to COVID-19 have not negatively impacted the volumes of the Company’s major Dedicated accounts, which are concentrated in the discount retail and grocery market sectors.

Mr. Fuller concluded, “Our Dedicated division continued to perform very well in the second quarter having delivered its fifth consecutive quarter of record productivity. Average revenue per tractor per week expanded from the first quarter, to $4,122, while we grew the truck count in this division by 1.3%. I continue to be very pleased with our team’s execution and we remain focused on organically growing the Dedicated division given the stability that we believe this business provides through economic cycles.”

Brokerage Segment

Quarter Ended June 30,

 

Six Months Ended June 30,

2020

2019

 

2020

2019

Brokerage revenue

$

46,029

 

$

39,457

 

$

96,505

 

$

85,701

 

Gross margin %

 

8.1

%

 

16.1

%

 

5.8

%

 

16.9

%

Load Count

 

40,933

 

 

29,701

 

 

84,426

 

 

63,520

 

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 $46.0 million in the second quarter of 2020 compared to $39.5 million in the second quarter of 2019, primarily as a result of increased load count partially offset by decreased revenue per load. Brokerage operating loss was $4.2 million in the second quarter of 2020 as compared to operating income of $1.3 million in the year ago quarter. Management will continue to focus on improving margins in this segment over the next few quarters.

Liquidity and Capital Resources

At the end of the second quarter 2020, the Company had $140.4 million of liquidity (defined as cash plus availability under the Company’s revolving credit facility), an increase of approximately $45 million from the first quarter, $381.6 million of net debt (defined as long-term debt, including current maturities, less cash balances), and $240.2 million of total stockholders' equity.

The Company expects its 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 fourth quarter of 2019. The Company will continue to monitor market conditions and may further reduce its planned capital expenditures as prudent. Through June 30, 2020, net capital expenditures were $65.0 million including the carryover $20 million from 2019.

COVID – 19 Business Update

  • Continued unwavering focus on employee health and safety for both driving and non-driving team members – over 95% of Company’s corporate office staff continue working from home
  • The Company’s volumes through the second quarter 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

Outlook

The Company’s baseline assumptions for the balance of 2020 include a general sequential economic recovery that may be volatile nationally or by region at times, a muted increase of capacity, and a relatively benign cost inflation, which should allow for a more favorable rate environment over the next several quarters. Based on these assumptions, we expect our internal initiatives around digitization and cost management, combined with our continued strength in Dedicated and an improving rate outlook have us well positioned to continue improving our margins through 2021.

Conference Call

The Company will hold a conference call to discuss its second quarter results at 5:00 p.m. (Eastern Time) on July 28, 2020. 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 2020 Earnings Conference Call. A replay will be available starting at 8:00 p.m. (Eastern Time) on July 28, 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 13706047. The replay will be available until 11:59 p.m. (Eastern Time) on August 4, 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, digital fleet, 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 June 30,

 

Six Months Ended June 30,

(in thousands, except per share data)

2020

 

2019

 

2020

 

2019

Operating Revenue: Revenue, excluding fuel surcharge

$

393,964

 

$

371,184

 

$

786,784

 

$

746,496

 

Fuel surcharge

 

28,513

 

 

42,678

 

 

68,261

 

 

82,729

 

Total operating revenue

 

422,477

 

 

413,862

 

 

855,045

 

 

829,225

 

Operating Expenses: Salaries, wages and benefits

 

139,987

 

 

130,521

 

 

275,381

 

 

255,084

 

Fuel and fuel taxes

 

29,874

 

 

47,374

 

 

70,197

 

 

94,278

 

Vehicle rents

 

21,335

 

 

18,579

 

 

43,212

 

 

37,555

 

Depreciation and amortization, net of (gain) loss

 

26,283

 

 

24,752

 

 

52,086

 

 

47,814

 

Purchased transportation

 

117,366

 

 

112,579

 

 

247,120

 

 

226,584

 

Operating expense and supplies

 

28,126

 

 

29,968

 

 

57,800

 

 

57,913

 

Insurance premiums and claims

 

21,283

 

 

19,266

 

 

47,306

 

 

43,619

 

Operating taxes and licenses

 

3,720

 

 

3,406

 

 

7,397

 

 

6,579

 

Communications and utilities

 

2,256

 

 

2,185

 

 

4,708

 

 

4,450

 

Gain on sale of subsidiary

 

-

 

 

(670

)

 

-

 

 

(670

)

General and other operating

 

15,970

 

 

17,115

 

 

37,229

 

 

34,594

 

Total operating expenses

 

406,200

 

 

405,075

 

 

842,436

 

 

807,800

 

Operating Income

 

16,277

 

 

8,787

 

 

12,609

 

 

21,425

 

Other Expenses (Income): Interest Expense, net

 

4,862

 

 

5,296

 

 

10,283

 

 

10,899

 

Equity in loss of affiliated companies

 

-

 

 

90

 

 

-

 

 

179

 

Other, net

 

-

 

 

-

 

 

2,000

 

 

26

 

 

4,862

 

 

5,386

 

 

12,283

 

 

11,104

 

Income Before Income Taxes

 

11,415

 

 

3,401

 

 

326

 

 

10,321

 

Income Tax Provision

 

2,387

 

 

415

 

 

530

 

 

2,316

 

Net Income (Loss)

 

9,028

 

 

2,986

 

 

(204

)

 

8,005

 

Net Income (Loss) attributable to non-controlling interest

 

(470

)

 

314

 

 

(486

)

 

612

 

Net Income attributable to controlling interest

$

9,498

 

$

2,672

 

$

282

 

$

7,393

 

  Income Per Share Basic earnings per share

$

0.19

 

$

0.05

 

$

0.01

 

$

0.15

 

Basic weighted average shares outstanding

 

49,499

 

 

48,742

 

 

49,358

 

 

48,569

 

Diluted earnings per share

$

0.18

 

$

0.05

 

$

(0.00

)

$

0.15

 

Diluted weighted average shares outstanding

 

50,215

 

 

49,312

 

 

49,518

 

 

49,184

 

Condensed Consolidated Balance Sheets (unaudited)

June 30,

 

December 31,

(in thousands)

2020

 

2019

Assets Current assets: Cash and cash equivalents

$

1,326

 

$

5,687

 

Customer receivables, net of allowance of $207 and $63, respectively

 

185,035

 

 

183,706

 

Other receivables

 

16,573

 

 

15,253

 

Prepaid insurance and licenses

 

9,392

 

 

11,326

 

Operating supplies

 

7,950

 

 

7,193

 

Assets held for sale

 

12,715

 

 

17,732

 

Other current assets

 

14,553

 

 

15,831

 

Total current assets

 

247,544

 

 

256,728

 

Property and equipment, at cost

 

912,264

 

 

880,101

 

Less accumulated depreciation and amortization

 

(400,641

)

 

(388,318

)

Net property and equipment

 

511,623

 

 

491,783

 

Other assets: Operating lease right-of-use assets

 

277,362

 

 

276,618

 

Goodwill

 

59,221

 

 

57,708

 

Intangible assets, net

 

26,364

 

 

27,214

 

Other

 

31,327

 

 

30,058

 

Total other assets

 

394,274

 

 

391,598

 

Total assets

$

1,153,441

 

$

1,140,109

 

Liabilities and Stockholders' Equity Current liabilities: Accounts payable

$

72,459

 

$

68,918

 

Book overdraft

 

4,945

 

 

1,313

 

Accrued wages and benefits

 

26,970

 

 

24,110

 

Claims and insurance accruals

 

48,881

 

 

51,910

 

Other accrued liabilities

 

6,642

 

 

9,127

 

Current portion of operating leases

 

70,438

 

 

69,866

 

Current maturities of long-term debt and finance leases

 

87,106

 

 

80,247

 

Total current liabilities

 

317,441

 

 

305,491

 

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

 

295,858

 

 

315,797

 

Less debt issuance costs

 

(335

)

 

(1,223

)

Net long-term debt and finance leases

 

295,523

 

 

314,574

 

Deferred income taxes

 

20,993

 

 

20,692

 

Other long-term liabilities

 

12,325

 

 

5,249

 

Claims and insurance accruals, long-term

 

60,306

 

 

56,910

 

Noncurrent operating lease liability

 

206,616

 

 

206,357

 

Commitments and contingencies

 

-

 

 

-

 

Stockholders' Equity: Common Stock

 

493

 

 

490

 

Additional paid-in capital

 

258,558

 

 

250,700

 

Accumulated deficit

 

(20,700

)

 

(20,982

)

Stockholders' equity

 

238,351

 

 

230,208

 

Noncontrolling interest

 

1,886

 

 

628

 

Total stockholders' equity

 

240,237

 

 

230,836

 

Total liabilities and stockholders' equity

$

1,153,441

 

$

1,140,109

 

Condensed Consolidated Cash Flow Statements (unaudited)

Six Months Ended June 30,

(in thousands)

2020

 

2019

Operating activities Net income (loss)

$

(204

)

$

8,005

 

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

 

301

 

 

1,824

 

Depreciation and amortization

 

45,683

 

 

44,401

 

Losses on sale of property and equipment

 

6,403

 

 

3,413

 

Share based compensation

 

2,000

 

 

1,880

 

Other

 

2,967

 

 

572

 

Gain on sale of subsidiary

 

-

 

 

(670

)

Changes in operating assets and liabilities Receivables

 

(3,027

)

 

5,320

 

Prepaid insurance and licenses

 

1,933

 

 

612

 

Operating supplies

 

95

 

 

72

 

Other assets

 

1,085

 

 

(3,288

)

Accounts payable and other accrued liabilities

 

11,822

 

 

(2,167

)

Accrued wages and benefits

 

2,738

 

 

(2,401

)

Net cash provided by operating activities

 

71,796

 

 

57,573

 

Investing activities Payments for purchases of property and equipment

 

(87,270

)

 

(105,137

)

Proceeds from sales of property and equipment

 

24,101

 

 

23,041

 

Other

 

(1,880

)

 

-

 

Proceeds from sale of subsidiary, net of cash

 

-

 

 

(8,259

)

Net cash used in investing activities

 

(65,049

)

 

(90,355

)

Financing activities Borrowings under lines of credit

 

180,254

 

 

10,700

 

Payments under lines of credit

 

(180,254

)

 

(9,900

)

Borrowings under long-term debt

 

183,662

 

 

65,704

 

Payments of long-term debt and finance leases

 

(196,742

)

 

(51,936

)

Payments of financing costs

 

(1,276

)

 

-

 

Net proceeds from issuance of common stock under ESPP

 

420

 

 

-

 

Tax withholding related to net share settlement of restricted stock awards

 

(93

)

 

(44

)

Purchase of noncontrolling interest

 

-

 

 

(8,659

)

Payments of long-term consideration for business acquisition

 

(1,000

)

 

(990

)

Proceeds from long-term consideration for sale of subsidiary

 

290

 

 

-

 

Book overdraft

 

3,631

 

 

9,791

 

Net cash (used in) provided by financing activities

 

(11,108

)

 

14,666

 

Change in cash balances of assets held for sale

 

-

 

 

11,784

 

Net change in cash and cash equivalents

 

(4,361

)

 

(6,332

)

Cash and cash equivalents Beginning of year

 

5,687

 

 

9,892

 

End of period

$

1,326

 

$

3,560

 

Key Operating Factors & Truckload Statistics (unaudited)  

Quarter Ended June 30,

 

%

 

Six Months Ended June 30,

 

%

2020

2019

 

Change

 

2020

2019

 

Change

Operating Revenue: Truckload1

$

347,935

 

$

331,727

 

4.9

%

$

690,279

 

$

660,795

 

4.5

%

Fuel Surcharge

 

28,513

 

 

42,678

 

-33.2

%

 

68,261

 

 

82,729

 

-17.5

%

Brokerage

 

46,029

 

 

39,457

 

16.7

%

 

96,505

 

 

85,701

 

12.6

%

Total Operating Revenue

$

422,477

 

$

413,862

 

2.1

%

$

855,045

 

$

829,225

 

3.1

%

  Operating Income (Loss): Truckload

$

20,428

 

$

7,503

 

172.3

%

$

21,628

 

$

17,344

 

24.7

%

Brokerage

$

(4,151

)

$

1,284

 

-423.3

%

$

(9,019

)

$

4,081

 

-321.0

%

$

16,277

 

$

8,787

 

85.2

%

$

12,609

 

$

21,425

 

-41.1

%

  Operating Ratio: Operating Ratio

 

96.1

%

 

97.9

%

-1.8

%

 

98.5

%

 

97.4

%

1.1

%

Adjusted Operating Ratio2

 

95.9

%

 

97.5

%

-1.6

%

 

98.4

%

 

96.6

%

1.9

%

  Truckload Operating Ratio

 

94.6

%

 

98.0

%

-3.5

%

 

97.1

%

 

97.7

%

-0.6

%

Adjusted Truckload Operating Ratio2

 

94.1

%

 

97.6

%

-3.6

%

 

96.9

%

 

96.8

%

0.1

%

Brokerage Operating Ratio

 

109.0

%

 

96.7

%

12.7

%

 

109.3

%

 

95.2

%

14.8

%

  Truckload Statistics: Revenue Per Mile1

$

2.051

 

$

2.118

 

-3.2

%

$

2.061

 

$

2.123

 

-2.9

%

  Average Tractors - Company Owned

 

4,777

 

 

4,548

 

5.0

%

 

4,762

 

 

4,613

 

3.2

%

Owner Operators

 

1,787

 

 

1,738

 

2.8

%

 

1,789

 

 

1,667

 

7.3

%

Total Average Tractors

 

6,564

 

 

6,286

 

4.4

%

 

6,551

 

 

6,280

 

4.3

%

  Average Revenue Miles Per TractorPer Week

 

1,849

 

 

1,791

 

3.2

%

 

1,821

 

 

1,779

 

2.4

%

  Average Revenue Per TractorPer Week1

$

3,793

 

$

3,792

 

0.0

%

$

3,753

 

$

3,777

 

-0.6

%

  Total Miles

 

175,833

 

 

162,217

 

8.4

%

 

345,020

 

 

319,201

 

8.1

%

  Total Company Miles

 

125,743

 

 

114,344

 

10.0

%

 

243,869

 

 

228,125

 

6.9

%

  Total Independent Contractor Miles

 

50,090

 

 

47,873

 

4.6

%

 

101,151

 

 

91,076

 

11.1

%

  Independent Contractor fuel surcharge

 

7,311

 

 

12,233

 

-40.2

%

 

18,522

 

 

22,713

 

-18.5

%

  1 Excluding fuel surcharge revenues 2 See GAAP to non-GAAP reconciliation in the schedules following this release Non-GAAP Reconciliation - Adjusted Operating Income and Adjusted Operating Ratio (unaudited)  

Quarter Ended June 30,

 

Six Months Ended June 30,

(in thousands)

2020

 

2019

 

2020

 

2019

GAAP Presentation: Total revenue

$

422,477

 

$

413,862

 

$

855,045

 

$

829,225

 

Total operating expenses

 

(406,200

)

 

(405,075

)

 

(842,436

)

 

(807,800

)

Operating income

$

16,277

 

$

8,787

 

$

12,609

 

$

21,425

 

Operating ratio

 

96.1

%

 

97.9

%

 

98.5

%

 

97.4

%

  Non-GAAP Presentation Total revenue

$

422,477

 

$

413,862

 

$

855,045

 

$

829,225

 

Fuel surcharge

 

(28,513

)

 

(42,678

)

 

(68,261

)

 

(82,729

)

Revenue, excluding fuel surcharge

 

393,964

 

 

371,184

 

 

786,784

 

 

746,496

 

  Total operating expenses

 

406,200

 

 

405,075

 

 

842,436

 

 

807,800

 

Adjusted for: Fuel surcharge

 

(28,513

)

 

(42,678

)

 

(68,261

)

 

(82,729

)

Mexico transition costs1

 

-

 

 

(1,200

)

 

-

 

 

(4,600

)

Gain on sale of subsidiary2

 

-

 

 

670

 

 

-

 

 

670

 

Adjusted operating expenses

 

377,687

 

 

361,867

 

 

774,175

 

 

721,141

 

Adjusted Operating Income

$

16,277

 

$

9,317

 

$

12,609

 

$

25,355

 

Adjusted operating ratio

 

95.9

%

 

97.5

%

 

98.4

%

 

96.6

%

  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 2 During the second quarter of 2019, we recognized a gain on the sale of our Mexico business   Non-GAAP Reconciliation - Truckload Adjusted Operating Income and Adjusted Operating Ratio (unaudited)  

Quarter Ended June 30,

 

Six Months Ended June 30,

(in thousands)

2020

 

2019

 

2020

 

2019

Truckload GAAP Presentation: Total Truckload revenue

$

376,448

 

$

374,405

 

$

758,540

 

$

743,524

 

Total Truckload operating expenses

 

(356,020

)

 

(366,902

)

 

(736,912

)

 

(726,180

)

Truckload operating income

$

20,428

 

$

7,503

 

$

21,628

 

$

17,344

 

Truckload operating ratio

 

94.6

%

 

98.0

%

 

97.1

%

 

97.7

%

  Truckload Non-GAAP Presentation Total Truckload revenue

$

376,448

 

$

374,405

 

$

758,540

 

$

743,524

 

Fuel surcharge

 

(28,513

)

 

(42,678

)

 

(68,261

)

 

(82,729

)

Revenue, excluding fuel surcharge

 

347,935

 

 

331,727

 

 

690,279

 

 

660,795

 

  Total Truckload operating expenses

 

356,020

 

 

366,902

 

 

736,912

 

 

726,180

 

Adjusted for: Fuel surcharge

 

(28,513

)

 

(42,678

)

 

(68,261

)

 

(82,729

)

Mexico transition costs1

 

-

 

 

(1,200

)

 

-

 

 

(4,600

)

Gain on sale of subsidiary2

 

-

 

 

670

 

 

-

 

 

670

 

Truckload Adjusted operating expenses

 

327,507

 

 

323,694

 

 

668,651

 

 

639,521

 

Truckload Adjusted operating income

$

20,428

 

$

8,033

 

$

21,628

 

$

21,274

 

Truckload Adjusted operating ratio

 

94.1

%

 

97.6

%

 

96.9

%

 

96.8

%

  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 2 During the second quarter of 2019, we recognized a gain on the sale of our Mexico business Non-GAAP Reconciliation - Adjusted Net Income and EPS (unaudited)  

Quarter Ended June 30,

 

Six Months Ended June 30,

(in thousands, except per share data)

2020

 

2019

 

2020

 

2019

GAAP: Net income attributable to controlling interest

$

9,498

 

$

2,672

 

$

282

 

$

7,393

 

Adjusted for: Income tax provision

 

2,387

 

 

415

 

 

530

 

 

2,316

 

Income before income taxes attributable to controlling interest

$

11,885

 

$

3,087

 

$

812

 

$

9,709

 

Loss on sale of equity method investments1

 

-

 

 

-

 

 

2,000

 

 

-

 

Mexico transition costs2

 

-

 

 

1,200

 

 

-

 

 

4,600

 

Gain on sale of subsidiary3

 

-

 

 

(670

)

 

-

 

 

(670

)

Adjusted income before income taxes

 

11,885

 

 

3,617

 

 

2,812

 

 

13,639

 

Adjusted income tax provision

 

2,387

 

 

705

 

 

530

 

 

3,457

 

Non-GAAP: Adjusted net income attributable to controlling interest

$

9,498

 

$

2,912

 

$

2,282

 

$

10,182

 

  GAAP: Earnings per diluted share

$

0.18

 

$

0.05

 

$

(0.00

)

$

0.15

 

Adjusted for: Income tax expense attributable to controlling interest

 

0.05

 

 

0.01

 

 

0.01

 

 

0.05

 

Income before income taxes attributable to controlling interest

$

0.23

 

$

0.06

 

$

0.01

 

$

0.20

 

Loss on sale of equity method investments1

 

-

 

 

-

 

 

0.04

 

 

-

 

Mexico transition costs2

 

-

 

 

0.02

 

 

-

 

 

0.09

 

Gain on sale of subsidiary3

 

-

 

 

(0.01

)

 

-

 

 

(0.01

)

Adjusted income before income taxes

 

0.23

 

 

0.07

 

 

0.05

 

 

0.28

 

Adjusted income tax provision

 

0.05

 

 

0.01

 

 

0.01

 

 

0.07

 

Non-GAAP: Adjusted net income attributable to controlling interest

$

0.18

 

$

0.06

 

$

0.04

 

$

0.21

 

  1 During the first quarter of 2020, we incurred loss on sale related to an equity method investment in a former wholly owned subsidiary 2 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 3 During the second quarter of 2019, we recognized a gain on the sale of our Mexico business

 

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

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