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Investor Alert

press release

Oct. 22, 2020, 4:10 p.m. EDT

U.S. Xpress Enterprises Reports Third Quarter 2020 Results

U.S. Xpress Enterprises, Inc. /zigman2/quotes/202703514/composite USX +1.59% (the “Company”) today announced results for the third quarter of 2020.

Third Quarter 2020 Financial Highlights

  • Operating revenue of $431.5 million compared to $428.5 million in the third quarter of 2019

  • Operating income of $15.9 million compared to $3.3 million in the third quarter of 2019

  • Operating ratio of 96.3% compared to 99.2% in the third quarter of 2019

  • Adjusted operating ratio [1] , a non-GAAP measure, of 96.1% compared to 99.2% in the third quarter of 2019

  • Truckload operating ratio improved 450 basis points to 94.6% from 99.1% in the third quarter of 2019

  • Net income attributable to controlling interest of $10.7 million, or $0.20 per diluted share, compared to a loss of $1.4 million in the third quarter of 2019, or a loss of $0.03 per diluted share

Third Quarter Financial Performance

 
Quarter Ended September 30,   Nine Months Ended September 30,
2020   2019   2020   2019
Operating revenue $ 431,469   $ 428,503   $ 1,286,514   $ 1,257,728  
Revenue, excluding fuel surcharge $ 403,679   $ 386,666   $ 1,190,463   $ 1,133,162  
Operating income $ 15,891   $ 3,282   $ 28,500   $ 24,707  
Adjusted operating income [1] $ 15,891   $ 3,282   $ 28,500   $ 28,637  
Operating ratio   96.3 %   99.2 %   97.8 %   98.0 %
Adjusted operating ratio [1]   96.1 %   99.2 %   97.6 %   97.5 %
Net income attributable to controlling interest $ 10,696   $ (1,446 ) $ 10,978   $ 5,947  
Adjusted net income attributable to controlling interest [1] $ 10,696   $ (1,446 ) $ 12,978   $ 8,736  
Earnings per diluted share $ 0.20   $ (0.03 ) $ 0.20   $ 0.12  
Adjusted earnings per diluted share [1] $ 0.20   $ (0.03 ) $ 0.24   $ 0.18  
 

Eric Fuller, President and CEO, commented, “This is an exciting time at U.S. Xpress as we transform our business with the goal of delivering not only peer levels of profitability but also deploy an operating model that is being purposefully built to organically scale over time. Through the third quarter, we continued to scale our digital fleet, adding approximately 100 average tractors representing more than 25% sequential growth as compared with the second quarter. The digital fleet business model, now branded as Variant, continues to prove out, maintaining a more than 20% advantage in utilization, an approximately 70% reduction in driver turnover, and substantially fewer accidents per million miles than the legacy Over-the-Road, or OTR, fleet. This provides real confidence in the scalability of our digital model as we work toward our goal of transitioning an additional 400 underperforming tractors in our legacy OTR solo fleet by the end of the first quarter of 2021 as part of our Phase 1 conversion of 900 tractors.”

Mr. Fuller continued, “Our third quarter truckload operating ratio improved to 94.6% or a 450 basis points improvement over the prior year. The improvement was tempered somewhat by a higher percentage of unseated trucks in our legacy OTR fleet due to increased competition for drivers and suspension of our student program during the second quarter, which contributed to an approximate 6% reduction in miles driven during the quarter. Looking forward, adjustments we have made over the past two months to our digital fleet recruiting program are beginning to deliver increased hiring momentum through October, contract rates are renewing at higher levels, brokerage margins expanded as we exited the quarter, and our consolidated safety record is the best in the Company’s modern history. We believe the efficiency and technology changes we are implementing are gaining momentum and position us to positively impact our profitability through next year.”

Enterprise Update

Operating revenue was $431.5 million, an increase of $3.0 million compared to the third quarter of 2019. The increase was primarily attributable to increased revenues in the Company’s Brokerage division of $9.9 million, an increase of $7.1 million in Truckload revenue, and decreased fuel surcharge revenues of $14.0 million. Excluding the impact of fuel surcharges, third quarter revenue increased $17.0 million to $403.7 million, an increase of 4.4% as compared to the prior year quarter.

Operating income for the third quarter of 2020 was $15.9 million which compares favorably to the $3.3 million in the third quarter of 2019. Operating ratio for the third quarter of 2020 was 96.3% compared to 99.2% in the prior year quarter.

Net income attributable to controlling interest for the third quarter of 2020 was $10.7 million compared to a loss of $1.4 million in the prior year quarter. Earnings per diluted share were $0.20 for the third quarter of 2020 and adjusted earnings per diluted share [1] were $0.20.

Truckload Segment

 
Quarter Ended September 30,   Nine Months Ended September 30,
2020   2019   2020   2019
Over the road
Average revenue per tractor per week [*] $ 3,680 $ 3,479 $ 3,566 $ 3,572
Average revenue per mile [*] $ 2.047 $ 1.910 $ 1.921 $ 1.949
Average revenue miles per tractor per week   1,798   1,821   1,856   1,832
Average tractors   3,684   3,785   3,781   3,671
Dedicated
Average revenue per tractor per week [*] $ 4,065 $ 4,011 $ 4,085 $ 3,998
Average revenue per mile [*] $ 2.353 $ 2.408 $ 2.360 $ 2.367
Average revenue miles per tractor per week   1,728   1,666   1,731   1,689
Average tractors   2,710   2,748   2,717   2,693
Consolidated
Average revenue per tractor per week [*] $ 3,843 $ 3,703 $ 3,783 $ 3,752
Average revenue per mile [*] $ 2.173 $ 2.109 $ 2.097 $ 2.118
Average revenue miles per tractor per week   1,768   1,756   1,804   1,772
Average tractors   6,394   6,533   6,498   6,364
* Excluding fuel surcharge revenues

The Truckload segment achieved an operating ratio of 94.6% and an adjusted operating ratio [1] of 94.1% for the third quarter of 2020, a 450 and 490 basis point improvement, respectively, compared to the operating ratio of 99.2% and the adjusted operating ratio [1] of 99.0% achieved in the third quarter of 2019. This improvement was primarily the result of higher rate per mile combined with lower claims expense and other costs as the Company continued to execute on its digital initiatives while maintaining a focus on reducing fixed and variable costs.

In the OTR division, average revenue per tractor per week increased 5.8% compared with the third quarter of 2019. Primarily the result of a 7.2% increase in average revenue per mile partially offset by a 1.3% decrease in revenue miles per tractor per week.

Mr. Fuller added, “The trucking environment shifted rapidly during the third quarter, which meaningfully impacted spot market rates, driver recruiting and retention costs, and seated truck count. The impact on the third quarter was mixed. Higher rates on the uncommitted portion of our OTR fleet helped drive higher revenue per truck and bodes well for contract renewals and bids over the next several quarters. Because the vast majority of our fleet is under contracts, the expected benefit of higher rates will come over time. However, the strong market caused immediate driver-related cost increases and more unseated trucks. In essence, dramatically improved revenue across a relatively small portion of our fleet supported cost increases across the entire fleet. Meanwhile, the benefits of our strategic shift away from student drivers led to higher unseated trucks in the near term, but also contributed to the best safety performance, as measured by reportable accidents per million miles, in recent memory and sequentially lower claims costs. As the benefits of contract renewals, digital fleet growth, and safety experience compound over coming quarters, we expect the benefits to far outweigh the third quarter costs.”

The Dedicated division’s average revenue per tractor per week increased $54 per tractor per week, or 1.3%, compared to the third quarter of 2019 primarily a result of a 3.7% increase in revenue miles per tractor per week partially offset by a 2.3% reduction in average revenue per mile.

Mr. Fuller concluded, “Our Dedicated division continues to perform at record levels having delivered its sixth consecutive quarter of average revenue per tractor per week in excess of $4,000. We remain focused on organically growing the Dedicated division given the stability that the business provides through economic cycles.”

Digital Fleet (now branded as “Variant”) Conversion Update

The Company continues to make progress on its initiative to have 900 tractors in the digital fleet component of its OTR division by the end of the first quarter of 2021. The average number of tractors in this division increased approximately 100 average tractors to 500 tractors sequentially from the second quarter of 2020. The Company also continues to see improved operating metrics compared to its legacy OTR fleet, including:

  • Utilization continues to track ~20% better

  • Turnover continues to track ~70% lower

  • Accidents per million miles continue to track ~30% lower

Brokerage Segment

 
Quarter Ended September 30,   Nine Months Ended September 30,
2020   2019   2020   2019
Brokerage revenue $ 55,970   $ 46,036   $ 152,475   $ 131,737  
Gross margin %   6.7 %   12.0 %   6.1 %   15.2 %
Load Count   38,779     36,634     123,205     100,154  
 

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 $56.0 million in the third quarter of 2020 compared to $46.0 million in the third quarter of 2019, primarily as a result of increased revenue per load and to a lesser extent an increase in load count. Brokerage operating loss was $4.5 million in the third quarter of 2020 as compared to an operating loss of $0.1 million in the year ago quarter. The Company continues to work on sequentially improving margins in this division.

Liquidity and Capital Resources

At the end of the third quarter 2020, the Company had $154.9 million of liquidity (defined as cash plus availability under the Company’s revolving credit facility), $386.3 million of net debt (defined as long-term debt, including current maturities, less cash balances), and $252.2 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. Through September 30, 2020, net capital expenditures were $95.3 million including the carryover $20 million from 2019.

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, increasing inventory re-stocking, tight trucking capacity, and a relatively benign cost inflation outside of driver-related and insurance premium expenses. These conditions are expected to continue to support spot market rates in excess of contract rates and a strengthening contract renewal environment over the next several quarters. Based on these assumptions, the Company expects its internal initiatives around digitization and cost management, combined with continued strength in Dedicated, to have U.S. Xpress well positioned to continue improving its margins through 2021.

Conference Call

The Company will hold a conference call to discuss its third quarter results at 5:00 p.m. (Eastern Time) on October 22, 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 Third Quarter 2020 Earnings Conference Call. A replay will be available starting at 8:00 p.m. (Eastern Time) on October 22, 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 13711865. The replay will be available until 11:59 p.m. (Eastern Time) on October 29, 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 rates, expected margins, future growth of our digital fleet and Dedicated division, expected net capital expenditures, the expected impact of our driver, digital fleet, 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 September 30,   Nine Months Ended September 30,
(in thousands, except per share data) 2020   2019   2020   2019
Operating Revenue:
Revenue, excluding fuel surcharge $ 403,679   $ 386,666   $ 1,190,463   $ 1,133,162  
Fuel surcharge   27,790     41,837     96,051     124,566  
Total operating revenue   431,469     428,503     1,286,514     1,257,728  
Operating Expenses:
Salaries, wages and benefits   137,541     134,862     412,889     389,907  
Fuel and fuel taxes   33,208     47,315     103,265     141,252  
Vehicle rents   20,956     19,470     64,168     57,025  
Depreciation and amortization, net of (gain) loss   25,785     26,684     77,871     74,498  
Purchased transportation   125,997     122,433     373,117     349,017  
Operating expense and supplies   33,927     36,147     101,249     104,744  
Insurance premiums and claims   17,835     19,570     65,141     63,189  
Operating taxes and licenses   3,359     3,533     10,756     10,112  
Communications and utilities   2,187     2,209     6,895     6,659  
Gain on sale of subsidiary   -     -     -     (670 )
General and other operating   14,783     12,998     42,663     37,288  
Total operating expenses   415,578     425,221     1,258,014     1,233,021  
Operating Income   15,891     3,282     28,500     24,707  
Other Expenses (Income):
Interest Expense, net   4,381     5,467     14,664     16,366  
Equity in loss of affiliated companies   -     91     -     270  
Other, net   -     -     2,000     26  
  4,381     5,558     16,664     16,662  
Income Before Income Taxes   11,510     (2,276 )   11,836     8,045  
Income Tax Provision   1,337     (813 )   1,867     1,503  
Net Income (Loss)   10,173     (1,463 )   9,969     6,542  
Net Income (Loss) attributable to non-controlling interest   (523 )   (17 )   (1,009 )   595  
Net Income (Loss) attributable to controlling interest $ 10,696   $ (1,446 ) $ 10,978   $ 5,947  
 
Income Per Share
Basic earnings (loss) per share $ 0.22   $ (0.03 ) $ 0.22   $ 0.12  
Basic weighted average shares outstanding   49,667     48,984     49,462     48,709  
Diluted earnings (loss) per share $ 0.20   $ (0.03 ) $ 0.20   $ 0.12  
Diluted weighted average shares outstanding   51,194     48,984     50,493     49,289  
 
 
Condensed Consolidated Balance Sheets (unaudited)
September 30,   December 31,
(in thousands) 2020   2019
Assets
Current assets:
Cash and cash equivalents $ 7,422   $ 5,687  
Customer receivables, net of allowance of $185 and $63, respectively   190,644     183,706  
Other receivables   16,345     15,253  
Prepaid insurance and licenses   23,073     11,326  
Operating supplies   8,249     7,193  
Assets held for sale   25,623     17,732  
Other current assets   16,405     15,831  
Total current assets   287,761     256,728  
Property and equipment, at cost   900,719     880,101  
Less accumulated depreciation and amortization   (397,263 )   (388,318 )
Net property and equipment   503,456     491,783  
Other assets:
Operating lease right-of-use assets   280,687     276,618  
Goodwill   59,221     57,708  
Intangible assets, net   25,938     27,214  
Other   33,979     30,058  
Total other assets   399,825     391,598  
Total assets $ 1,191,042   $ 1,140,109  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 77,646   $ 68,918  
Book overdraft   -     1,313  
Accrued wages and benefits   32,095     24,110  
Claims and insurance accruals   51,571     51,910  
Other accrued liabilities   7,483     9,127  
Current portion of operating leases   74,357     69,866  
Current maturities of long-term debt and finance leases   111,232     80,247  
Total current liabilities   354,384     305,491  
Long-term debt and finance leases, net of current maturities   282,453     315,797  
Less debt issuance costs   (325 )   (1,223 )
Net long-term debt and finance leases   282,128     314,574  
Deferred income taxes   22,236     20,692  
Other long-term liabilities   18,710     5,249  
Claims and insurance accruals, long-term   55,174     56,910  
Noncurrent operating lease liability   206,190     206,357  
Commitments and contingencies   -     -  
Stockholders' Equity:
Common Stock   496     490  
Additional paid-in capital   260,365     250,700  
Accumulated deficit   (10,004 )   (20,982 )
Stockholders' equity   250,857     230,208  
Noncontrolling interest   1,363     628  
Total stockholders' equity   252,220     230,836  
Total liabilities and stockholders' equity $ 1,191,042   $ 1,140,109  
 
 
Condensed Consolidated Cash Flow Statements (unaudited)
Nine Months Ended September 30,
(in thousands) 2020   2019
Operating activities
Net income $ 9,969   $ 6,542  
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax provision   1,543     1,018  
Depreciation and amortization   68,104     68,813  
Losses on sale of property and equipment   9,767     5,685  
Share based compensation   3,421     2,810  
Other   3,186     783  
Gain on sale of subsidiary   -     (670 )
Changes in operating assets and liabilities
Receivables   (8,354 )   (5,650 )
Prepaid insurance and licenses   (11,747 )   (12,189 )
Operating supplies   (204 )   (443 )
Other assets   (3,047 )   (4,800 )
Accounts payable and other accrued liabilities   21,413     22,076  
Accrued wages and benefits   7,863     (729 )
Net cash provided by operating activities   101,914     83,246  
Investing activities
Payments for purchases of property and equipment   (129,582 )   (127,899 )
Proceeds from sales of property and equipment   36,192     33,301  
Other   (1,880 )   (2,000 )
Proceeds from sale of subsidiary, net of cash   -     (6,432 )
Net cash used in investing activities   (95,270 )   (103,030 )
Financing activities
Borrowings under lines of credit   231,254     56,200  
Payments under lines of credit   (231,254 )   (53,300 )
Borrowings under long-term debt   228,981     78,803  
Payments of long-term debt and finance leases   (231,340 )   (73,472 )
Payments of financing costs   (1,391 )   (170 )
Net proceeds from issuance of common stock under ESPP   851     349  
Tax withholding related to net share settlement of restricted stock awards   (135 )   (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   438     -  
Book overdraft   (1,313 )   3,833  
Net cash (used in) provided by financing activities   (4,909 )   2,550  
Change in cash balances of assets held for sale   -     11,784  
Net change in cash and cash equivalents   1,735     (5,450 )
Cash and cash equivalents
Beginning of year   5,687     9,892  
End of period $ 7,422   $ 4,442  
 
 
Key Operating Factors & Truckload Statistics (unaudited)
 
Quarter Ended September 30,   %   Nine Months Ended September 30,   %
2020   2019   Change   2020   2019   Change
Operating Revenue:
Truckload [1] $ 347,709   $ 340,630   2.1 % $ 1,037,988   $ 1,001,425   3.7 %
Fuel Surcharge   27,790     41,837   -33.6 %   96,051     124,566   -22.9 %
Brokerage   55,970     46,036   21.6 %   152,475     131,737   15.7 %
Total Operating Revenue $ 431,469   $ 428,503   0.7 % $ 1,286,514   $ 1,257,728   2.3 %
 
Operating Income (Loss):
Truckload $ 20,407   $ 3,345   510.1 % $ 42,035   $ 20,689   103.2 %
Brokerage $ (4,516 ) $ (63 ) n/m   $ (13,535 ) $ 4,018   n/m  
$ 15,891   $ 3,282   384.2 % $ 28,500   $ 24,707   15.4 %
 
Operating Ratio:
Operating Ratio   96.3 %   99.2 % -2.9 %   97.8 %   98.0 % -0.2 %
Adjusted Operating Ratio [2]   96.1 %   99.2 % -3.1 %   97.6 %   97.5 % 0.1 %
 
Truckload Operating Ratio   94.6 %   99.1 % -4.5 %   96.3 %   98.2 % -1.9 %
Adjusted Truckload Operating Ratio [2]   94.1 %   99.0 % -4.9 %   96.0 %   97.5 % -1.6 %
Brokerage Operating Ratio   108.1 %   100.1 % 8.0 %   108.9 %   96.9 % 12.4 %
 
Truckload Statistics:
Revenue Per Mile [1] $ 2.173   $ 2.109   3.0 % $ 2.097   $ 2.118   -1.0 %
 
Average Tractors -
Company Owned   4,700     4,692   0.2 %   4,741     4,639   2.2 %
Owner Operators   1,694     1,841   -8.0 %   1,757     1,725   1.9 %
Total Average Tractors   6,394     6,533   -2.1 %   6,498     6,364   2.1 %
 
Average Revenue Miles Per Tractor
Per Week
  1,768     1,756   0.7 %   1,804     1,772   1.8 %
 
Average Revenue Per Tractor
Per Week [1]
$ 3,843   $ 3,703   3.8 % $ 3,783   $ 3,752   0.8 %
 
Total Miles   165,206     168,153   -1.8 %   510,220     487,354   4.7 %
 
Total Company Miles   119,014     118,374   0.5 %   362,882     346,499   4.7 %
 
Total Independent Contractor Miles   46,192     49,779   -7.2 %   147,338     140,855   4.6 %
 
Independent Contractor fuel surcharge $ 6,838   $ 11,874   -42.4 % $ 25,360   $ 34,587   -26.7 %
 
1 Excluding fuel surcharge revenues
2 See GAAP to non-GAAP reconciliation in the schedules following this release
 
Non-GAAP Reconciliation - Adjusted Net Income and EPS (unaudited)
 
Quarter Ended September 30,   Nine Months Ended September 30,
(in thousands, except per share data) 2020   2019   2020   2019
GAAP: Net income attributable to controlling interest $ 10,696 $ (1,446 ) $ 10,978 $ 5,947  
Adjusted for:
Income tax provision   1,337   (813 )   1,867   1,503  
Income before income taxes attributable to controlling interest $ 12,033 $ (2,259 ) $ 12,845 $ 7,450  
Loss on sale of equity method investments [1]   -   -     2,000   -  
Mexico transition costs [2]   -   -     -   4,600  
Gain on sale of subsidiary [3]   -   -     -   (670 )
Adjusted income before income taxes   12,033   (2,259 )   14,845   11,380  
Adjusted income tax provision   1,337   (813 )   1,867   2,644  
Non-GAAP: Adjusted net income attributable to controlling interest $ 10,696 $ (1,446 ) $ 12,978 $ 8,736  
 
GAAP: Earnings per diluted share $ 0.20 $ (0.03 ) $ 0.20 $ 0.12  
Adjusted for:
Income tax expense attributable to controlling interest   0.03   (0.02 )   0.04   0.03  
Income before income taxes attributable to controlling interest $ 0.23 $ (0.05 ) $ 0.24 $ 0.15  
Loss on sale of equity method investments [1]   -   -     0.04   -  
Mexico transition costs [2]   -   -     -   0.09  
Gain on sale of subsidiary [3]   -   -     -   (0.01 )
Adjusted income before income taxes   0.23   (0.05 )   0.28   0.23  
Adjusted income tax provision   0.03   (0.02 )   0.04   0.05  
Non-GAAP: Adjusted net income attributable to controlling interest $ 0.20 $ (0.03 ) $ 0.24 $ 0.18  
 
[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
 
Non-GAAP Reconciliation - Adjusted Operating Income and Adjusted Operating Ratio (unaudited)
 
Quarter Ended September 30,   Nine Months Ended September 30,
(in thousands) 2020   2019   2020   2019
GAAP Presentation:
Total revenue $ 431,469   $ 428,503   $ 1,286,514   $ 1,257,728  
Total operating expenses   (415,578 )   (425,221 )   (1,258,014 )   (1,233,021 )
Operating income $ 15,891   $ 3,282   $ 28,500   $ 24,707  
Operating ratio   96.3 %   99.2 %   97.8 %   98.0 %
 
Non-GAAP Presentation
Total revenue $ 431,469   $ 428,503   $ 1,286,514   $ 1,257,728  
Fuel surcharge   (27,790 )   (41,837 )   (96,051 )   (124,566 )
Revenue, excluding fuel surcharge   403,679     386,666     1,190,463     1,133,162  
 
Total operating expenses   415,578     425,221     1,258,014     1,233,021  
Adjusted for:
Fuel surcharge   (27,790 )   (41,837 )   (96,051 )   (124,566 )
Mexico transition costs [1]   -     -     -     (4,600 )
Gain on sale of subsidiary [2]   -     -     -     670  
Adjusted operating expenses   387,788     383,384     1,161,963     1,104,525  
Adjusted Operating Income $ 15,891   $ 3,282   $ 28,500   $ 28,637  
Adjusted operating ratio   96.1 %   99.2 %   97.6 %   97.5 %
 
[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 September 30,   Nine Months Ended September 30,
(in thousands) 2020   2019   2020   2019
Truckload GAAP Presentation:
Total Truckload revenue $ 375,499   $ 382,467   $ 1,134,039   $ 1,125,991  
Total Truckload operating expenses   (355,092 )   (379,122 )   (1,092,004 )   (1,105,302 )
Truckload operating income $ 20,407   $ 3,345   $ 42,035   $ 20,689  
Truckload operating ratio   94.6 %   99.1 %   96.3 %   98.2 %
 
Truckload Non-GAAP Presentation
Total Truckload revenue $ 375,499   $ 382,467   $ 1,134,039   $ 1,125,991  
Fuel surcharge   (27,790 )   (41,837 )   (96,051 )   (124,566 )
Revenue, excluding fuel surcharge   347,709     340,630     1,037,988     1,001,425  
 
Total Truckload operating expenses   355,092     379,122     1,092,004     1,105,302  
Adjusted for:
Fuel surcharge   (27,790 )   (41,837 )   (96,051 )   (124,566 )
Mexico transition costs [1]   -     -     -     (4,600 )
Gain on sale of subsidiary [2]   -     -     -     670  
Truckload Adjusted operating expenses   327,302     337,285     995,953     976,806  
Truckload Adjusted operating income $ 20,407   $ 3,345   $ 42,035   $ 24,619  
Truckload Adjusted operating ratio   94.1 %   99.0 %   96.0 %   97.5 %
 
[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
 

USX Financial

View source version on businesswire.com: https://www.businesswire.com/news/home/20201022006152/en/

SOURCE: U.S. Xpress Enterprises, Inc.

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

COMTEX_373251432/2456/2020-10-22T16:10:18

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