CHATTANOOGA, Tenn.--(BUSINESS WIRE)--U.S. Xpress Enterprises, Inc. (NYSE:USX) (the “Company”) today announced results for the fourth quarter of 2018.
Fourth Quarter 2018 Highlights
- Operating revenue of $469.2 million, an increase of 8.8% compared to the fourth quarter of 2017
- Operating income of $21.1 million compared to $12.5 million reported in the fourth quarter of 2017
- Operating ratio of 95.5%, a 160 basis point improvement compared to the fourth quarter of 2017
- Adjusted operating ratio1, a non-GAAP measure, of 92.5%, a 280 basis point improvement compared to the fourth quarter of 2017
- Net income attributable to controlling interest of $7.0 million, or $0.14 per diluted share, compared to $9.5 million in the fourth quarter of 2017
- Adjusted net income attributable to controlling interest1, a non-GAAP measure, of $19.5 million, or $0.39 per diluted share, compared to $0.9 million in the fourth quarter of 2017
Fourth Quarter Financial Performance
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| Operating revenue | $ | 469,222 | $ | 431,233 | $ | 1,804,915 | $ | 1,555,385 | |||||||||
| Revenue, excluding fuel surcharge | $ | 422,530 | $ | 390,489 | $ | 1,622,083 | $ | 1,417,173 | |||||||||
| Operating income | $ | 21,142 | $ | 12,457 | $ | 78,906 | $ | 28,608 | |||||||||
| Adjusted operating income1 | $ | 31,835 | $ | 18,520 | $ | 96,036 | $ | 37,032 | |||||||||
| Operating ratio | 95.5 | % | 97.1 | % | 95.6 | % | 98.2 | % | |||||||||
| Adjusted operating ratio1 | 92.5 | % | 95.3 | % | 94.1 | % | 97.4 | % | |||||||||
| Net income (loss) attributable to controlling interest | $ | 6,997 | $ | 9,499 | $ | 24,899 | $ | (4,060 | ) | ||||||||
| Adjusted net income loss attributable to controlling interest1 | $ | 19,494 | $ | 879 | $ | 48,066 | $ | (11,205 | ) | ||||||||
| Earnings (loss) per diluted share | $ | 0.14 | $ | 1.49 | $ | 0.83 | $ | (0.64 | ) | ||||||||
| Adjusted earnings per diluted share1 | $ | 0.39 | $ | 0.14 | $ | 1.59 | $ | (1.75 | ) | ||||||||
| 1 See GAAP to non-GAAP reconciliation in the schedules following this release | |||||||||||||||||
Eric Fuller, CEO and President, commented, “I am very proud of our results. For the fourth quarter, our adjusted operating ratio improved 280 basis points, year over year, to 92.5%. This quarter’s performance represents the sixth consecutive quarter of improvement and is the best adjusted operating ratio that we have delivered in 20 years. Our focus has been to manage the business by core metrics that impact Rate, Truck Count, Utilization and Cost and measure our success by our adjusted operating ratio. With record financial results, positive early year momentum, and an improved capital structure from our June initial public offering, we are well positioned to continue methodically managing our capital allocation, improving our operational execution, and targeting industry-leading profitability.”
Enterprise Update
Total revenue for the fourth quarter of 2018 increased by $38.0 million to $469.2 million compared to the fourth quarter of 2017. The increase was primarily the result of a 7.2% increase in the Company’s rate per mile, a 16.2% increase in brokerage revenues to $64.9 million, and a $5.9 million increase in fuel surcharge revenues. Excluding the impact of fuel surcharges, fourth quarter revenue increased $32.0 million to $422.5 million, an increase of 8.2% compared to the year ago quarter.
Operating income for the fourth quarter of 2018 was $21.1 million, which compares to $12.5 million achieved in the fourth quarter of 2017. Excluding the $10.7 million loss on sale and exit of the Company’s fixed cost investment in cross border Mexico operations in the fourth quarter of 2018 and $6.1 million in unfavorable fuel purchase commitments in the fourth quarter of 2017, adjusted operating income for the fourth quarter of 2018 was $31.8 million, compared to $18.5 million in the prior year quarter.
The fourth quarter 2018 adjusted operating ratio was 92.5%, a 280 basis point improvement compared to the fourth quarter of 2017, which is the Company’s sixth consecutive quarter of year over year improvement. For the full year 2018, the Company’s adjusted operating ratio improved by 330 basis points to 94.1% compared to 2017.
Net income attributable to controlling interest for the fourth quarter of 2018 was $7.0 million compared to $9.5 million in the prior year quarter. In addition to the adjustments described above, the 2017 quarter included a $12.4 million after-tax benefit related to reduction of the Company's estimated deferred tax liability in accordance with the Tax Cuts and Jobs Act. Adjusted net income attributable to controlling interest for the fourth quarter of 2018 was $19.5 million and compares favorably to $0.9 million in the prior year quarter. Adjusted earnings per diluted share were $0.39 for the fourth quarter of 2018.
Truckload Segment
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||
| Over the road | |||||||||||||
| Average revenue per tractor per week1 | $ | 3,919 | $ | 3,896 | $ | 3,917 | $ | 3,500 | |||||
| Average revenue per mile1 | $ | 2.103 | $ | 1.998 | $ | 2.041 | $ | 1.853 | |||||
| Average revenue miles per tractor per week | 1,864 | 1,950 | 1,919 | 1,889 | |||||||||
| Average tractors | 3,525 | 3,717 | 3,562 | 3,788 | |||||||||
| Dedicated | |||||||||||||
| Average revenue per tractor per week1 | $ | 3,869 | $ | 3,518 | $ | 3,717 | $ | 3,598 | |||||
| Average revenue per mile1 | $ | 2.329 | $ | 2.134 | $ | 2.259 | $ | 2.089 | |||||
| Average revenue miles per tractor per week | 1,661 | 1,649 | 1,645 | 1,723 | |||||||||
| Average tractors | 2,770 | 2,583 | 2,701 | 2,440 | |||||||||
| Consolidated | |||||||||||||
| Average revenue per tractor per week1 | $ | 3,897 | $ | 3,741 | $ | 3,831 | $ | 3,539 | |||||
| Average revenue per mile1 | $ | 2.196 | $ | 2.048 | $ | 2.127 | $ | 1.940 | |||||
| Average revenue miles per tractor per week | 1,775 | 1,827 | 1,801 | 1,824 | |||||||||
| Average tractors | 6,295 | 6,300 | 6,263 | 6,228 | |||||||||
| 1 Excluding fuel surcharge revenues | |||||||||||||
| The above table excludes revenue, miles and tractors for services performed in Mexico. | |||||||||||||
Mr. Fuller said, “Market conditions have remained constructive through the fourth quarter of 2018 and into the first quarter of 2019. Since October, we have contractually agreed to rate renewals for approximately 20% of our anticipated truckload revenue for 2019 with an average rate increase of approximately 7%, and we expect full year contract rates to increase between 5–8%.”
The Truckload segment achieved an adjusted operating ratio of 91.9% for the fourth quarter of 2018, a 340 bps improvement compared to the adjusted operating ratio of 95.3% achieved in the fourth quarter of 2017. This improvement was a result of the continued successful implementation of the Company’s strategic initiatives, disciplined cost management, and increased rates.
In the Over the Road division, as a result of a change in business mix, the Company maintained average revenue per tractor per week in 2018 consistent with the fourth quarter of 2017 while increasing average revenue per mile by 5.3% despite a reduction in average miles per tractor by 4.4%.
The Dedicated division’s average revenue per tractor per week increased 10.0% in the fourth quarter of 2018 compared to the fourth quarter of 2017. The increase was primarily the result of a 9.1% increase in the division’s revenue per mile. The highlight in the fourth quarter of 2018 was the improvement in utilization compared to the fourth quarter of 2017. The Company believes significant progress was achieved during the third quarter through rate increases and adjusting to the change in shipping patterns, which contributed to the fourth quarter’s sequential utilization improvement. This compares to general fourth quarter seasonality that historically has resulted in an approximate 5% reduction in utilization, sequentially.
Brokerage Segment
| Quarter Ended December 31, | Year Ended December 31, | |||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||
| Brokerage revenue | $ | 64,855 | $ | 55,813 | $ | 242,817 | $ | 173,218 | ||||||||||
| Gross margin % | 13.9 | % | 15.0 | % | 13.4 | % | 13.5 | % | ||||||||||
| Load Count | 43,484 | 42,673 | 167,760 | 147,775 | ||||||||||||||
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 revenues increased 16.2% to $64.9 million in the fourth quarter of 2018 compared to $55.8 million in the fourth quarter of 2017. The increase was primarily the result of higher average revenue per load, due in part to higher fuel prices.
Liquidity and Capital Resources
As of December 31, 2018, U.S. Xpress had $139.9 million of liquidity (defined as cash plus availability under the Company’s revolving credit facility), $416.0 million of net debt (defined as long-term debt, including current maturities, less cash balances), and $238.4 million of total stockholders' equity. Capital expenditures, net of proceeds, related primarily to tractors and trailers and were $79.9 million in the fourth quarter and $168.6 million for full year 2018.
Outlook
Mr. Fuller commented on the Company's outlook: "For 2019, we continue to expect to achieve four quarters of year over year adjusted operating ratio improvement with a targeted full year adjusted operating ratio of 93.0%.”
"From a revenue perspective, we anticipate moderate economic growth and a more balanced relationship of freight demand and available truckload capacity. In this environment, we anticipate holding our asset based fleet size approximately even and optimizing our consolidated revenue base over our Truckload and Brokerage capacity. For the full year, we expect mid-single digit rate increases in our Truckload segment based on a combination of contract rate increases and network management, partially offset by a less robust spot market, which represents approximately 10% of our revenues. In our Brokerage segment, we anticipate flattening revenue due to a combination of tougher comparisons, rate pressure, and an emphasis on Truckload selection of available loads.”
"Outside of market forces, we see multiple Company-specific opportunities. We expect to realize in 2019 at least 50% of the expected $10 million of annualized benefits from exiting our fixed cost investment in the Mexico cross-border business market and reallocating our north of the border capacity. In addition, new tractor technology and internal initiatives afford us opportunities in the areas of safety, maintenance, and fuel savings. We also continue to examine new ways to use technology to increase revenue and lower our costs."
Conference Call
The Company will hold a conference call to discuss its fourth quarter results at 5:00 p.m. (Eastern Time) on February 7, 2019. The conference call can be accessed live over the by phone dialing 1-877-423-9813 or, for international callers, 1-201-689-8573 and requesting to be joined to the U.S. Xpress Fourth Quarter Earnings Conference Call. A replay will be available starting at 8:00 p.m. (Eastern Time) on February 7, 2019, and can be accessed by dialing 1-844-512-2921 or, for international callers, 1-412-317-6671. The passcode for the replay is 13686257. The replay will be available until 11:59 p.m. (Eastern Time) on February 14, 2019.
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company’s website at investor.usxpress.com. The online replay will remain available for a limited time beginning immediately following the call. Supplementary information for the conference call also will be available on this website.
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 Expenses, 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. 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 you should not consider them 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.
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,” “focus,” “continue,” “will,” “could,” “should,” “may,” and similar terms and phrases. In this press release, such statements may include, but are not limited to, statements in the "Outlook" section and any other statements concerning: any projections of earnings, revenues, cash flows, capital expenditures, or other financial items; any statement of plans, strategies, or objectives for future operations; any statements regarding future economic or industry conditions or performance; and any statements of belief and any statements of assumptions underlying any of the foregoing. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those in the forward-looking statements: general economic conditions, including inflation and consumer spending; political conditions and regulations, including future changes thereto; changes in tax laws or in their interpretations and changes in tax rates; future insurance and claims experience, including adverse changes in claims experience and loss development factors, or additional changes in management's estimates of liability based upon such experience and development factors that cause our expectations of insurance and claims expense to be inaccurate or otherwise impacts our results; impact of pending or future legal proceedings; future market for used revenue equipment and real estate; future revenue equipment prices; future capital expenditures, including equipment purchasing and leasing plans and equipment turnover (including expected trade-ins); expected fleet age; future depreciation and amortization; changes in management’s estimates of the need for new tractors and trailers; future ability to generate sufficient cash from operations and obtain financing on favorable terms to meet our significant ongoing capital requirements; our ability to maintain compliance with the provisions of our credit agreement; expected freight environment, including freight demand, rates, capacity, and volumes; future asset utilization; loss of one or more of our major customers; our ability to renew dedicated service offering contracts on the terms and schedule we expect; surplus inventories, recessionary economic cycles, and downturns in customers' business cycles; strikes, work slowdowns, or work stoppages at the Company, customers, ports, or other shipping related facilities; increases or rapid fluctuations in fuel prices, as well as fluctuations in surcharge collection, including, but not limited to, changes in customer fuel surcharge policies and increases in fuel surcharge bases by customers; interest rates, fuel taxes, tolls, and license and registration fees; increases in compensation for and difficulty in attracting and retaining qualified professional drivers and independent contractors; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, and intermodal competitors; regulatory requirements that increase costs, decrease efficiency, or reduce the availability of drivers, including revised hours-of-service requirements for drivers and the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program that implemented new driver standards and modified the methodology for determining a carrier’s Department of Transportation safety rating; future safety performance; our ability to reduce, or control increases in, operating costs; future third-party service provider relationships and availability; execution of the Company’s current business strategy or changes in the Company’s business strategy; the ability of the Company’s infrastructure to support future organic or inorganic growth; our ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations; in relation to exiting our fixed cost investment in U.S.-Mexico cross border business, the actual costs of severance, leased vehicle turn-in, equipment repositioning, and other expenses associated with exiting the operations; the impact of supply and demand on availability and pricing of replacement loads for tractors in our U.S. network; the prices obtained for assets being disposed of; and the timing and amount of deferred consideration collected; and our ability to adapt to changing market conditions and technologies. 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 December 31, | Year Ended December 31, | ||||||||||||||
| (in thousands, except per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
| Operating Revenue: | |||||||||||||||
| Revenue, excluding fuel surcharge | $ | 422,530 | $ | 390,489 | $ | 1,622,083 | $ | 1,417,173 | |||||||
| Fuel surcharge | 46,692 | 40,744 | 182,832 | 138,212 | |||||||||||
| Total operating revenue | 469,222 | 431,233 | 1,804,915 | 1,555,385 | |||||||||||
| Operating Expenses: | |||||||||||||||
| Salaries, wages and benefits | 135,252 | 140,934 | 535,994 | 543,735 | |||||||||||
| Fuel and fuel taxes | 54,009 | 63,470 | 227,525 | 219,515 | |||||||||||
| Vehicle rents | 19,727 | 18,630 | 78,639 | 74,377 | |||||||||||
| Depreciation and amortization, net of (gain) loss | 24,558 | 24,347 | 97,954 | 93,369 | |||||||||||
| Purchased transportation | 131,756 | 95,147 | 481,945 | 308,624 | |||||||||||
| Operating expense and supplies | 28,662 | 29,976 | 118,064 | 126,700 | |||||||||||
| Insurance premiums and claims | 20,612 | 24,873 | 85,075 | 77,430 | |||||||||||
| Operating taxes and licenses | 3,701 | 3,930 | 14,133 | 13,769 | |||||||||||
| Communications and utilities | 2,426 | 1,901 | 9,575 | 7,683 | |||||||||||
| General and other operating | 16,684 | 15,568 | 66,412 | 61,575 | |||||||||||
| Impairment of assets held for sale | 10,693 | - | 10,693 | - | |||||||||||
| Total operating expenses | 448,080 | 418,776 | 1,726,009 | 1,526,777 | |||||||||||
| Operating Income | 21,142 | 12,457 | 78,906 | 28,608 | |||||||||||
| Other Expenses (Income): | |||||||||||||||
| Interest Expense, net | 5,095 | 13,393 | 34,866 | 49,758 | |||||||||||
| Gain on sale of subsidiary | - | (1,026 | ) | - | (1,026 | ) | |||||||||
| Early extinguishment of debt | - | - | 7,753 | - | |||||||||||
| Impairment in equity method investments | 1,804 | - | 1,804 | - | |||||||||||
| Equity in loss of affiliated companies | 131 | 190 | 381 | 1,350 | |||||||||||
| Other, net | 101 | 357 | 136 | (350 | ) | ||||||||||
| 7,131 | 12,914 | 44,940 | 49,732 | ||||||||||||
| Income (loss) Before Income Taxes | 14,011 | (457 | ) | 33,966 | (21,124 | ) | |||||||||
| Income Tax Provision (Benefit) | 6,779 | (9,984 | ) | 7,860 | (17,187 | ) | |||||||||
| Net Income (loss) | 7,232 | 9,527 | 26,106 | (3,937 | ) | ||||||||||
| Net Income attributable to non-controlling interest | 235 | 28 | 1,207 | 123 | |||||||||||
| Net Income (loss) attributable to controlling interest | $ | 6,997 | $ | 9,499 | $ | 24,899 | $ | (4,060 | ) | ||||||
| Income (loss) Per Share | |||||||||||||||
| Basic earnings (loss) per share | $ | 0.14 | $ | 1.49 | $ | 0.84 | $ | (0.64 | ) | ||||||
| Basic weighted average shares outstanding | 48,319 | 6,385 | 29,470 | 6,385 | |||||||||||
| Diluted earnings (loss) per share | $ | 0.14 | $ | 1.49 | $ | 0.83 | $ | (0.64 | ) | ||||||
| Diluted weighted average shares outstanding | 49,466 | 6,385 | 30,133 | 6,385 | |||||||||||
| Condensed Consolidated Balance Sheets (unaudited) | |||||||||
| December 31, | December 31, | ||||||||
| (in thousands) | 2018 | 2017 | |||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 9,892 | $ | 9,232 | |||||
| Customer receivables, net of allowance of $59 and $122, respectively | 190,254 | 186,407 | |||||||
| Other receivables | 20,430 | 21,637 | |||||||
| Prepaid insurance and licenses | 11,035 | 7,070 | |||||||
| Operating supplies | 7,324 | 8,787 | |||||||
| Assets held for sale | 33,225 | 3,417 | |||||||
| Other current assets | 13,374 | 12,170 | |||||||
| Total current assets | 285,534 | 248,720 | |||||||
| Property and equipment, at cost | 898,530 | 835,814 | |||||||
| Less accumulated depreciation and amortization | (379,813 | ) | (371,909 | ) | |||||
| Net property and equipment | 518,717 | 463,905 | |||||||
| Other assets: | |||||||||
| Goodwill | 57,708 | 57,708 | |||||||
| Intangible assets, net | 28,913 | 30,742 | |||||||
| Other | 19,615 | 19,496 | |||||||
| Total other assets | 106,236 | 107,946 | |||||||
| Total assets | $ | 910,487 | $ | 820,571 | |||||
| Liabilities, Redeemable Restricted Units and Stockholder's Equity (Deficit) | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 63,808 | $ | 80,555 | |||||
| Book overdraft | - | 3,537 | |||||||
| Accrued wages and benefits | 24,960 | 20,530 | |||||||
| Claims and insurance accruals | 47,442 | 47,641 | |||||||
| Other accrued liabilities | 8,120 | 13,901 | |||||||
| Liabilities associated with assets held for sale | 6,856 | - | |||||||
| Current maturities of long-term debt | 113,094 | 132,332 | |||||||
| Total current liabilities | 264,280 | 298,496 | |||||||
| Long-term debt, net of current maturities | 312,819 | 480,472 | |||||||
| Less unamortized discount and debt issuance costs | (1,347 | ) | (7,266 | ) | |||||
| Net long-term debt | 311,472 | 473,206 | |||||||
| Deferred income taxes | 19,978 | 15,630 | |||||||
| Long term liabilites associated with assets held for sale | 8,353 | - | |||||||
| Other long-term liabilities | 7,713 | 14,350 | |||||||
| Claims and insurance accruals, long-term | 60,304 | 56,713 | |||||||
| Commitments and contingencies: | |||||||||
| Redeemable restricted units | - | 3,281 | |||||||
| Stockholder's Equity (Deficit): | |||||||||
| Common Stock | 484 | 64 | |||||||
| Additional paid-in capital | 251,742 | 1 | |||||||
| Accumulated deficit | (17,335 | ) | (43,459 | ) | |||||
| Stockholder’s equity (deficit) | 234,891 | (43,394 | ) | ||||||
| Noncontrolling interest | 3,496 | 2,289 | |||||||
| Total stockholder's equity (deficit) | 238,387 | (41,105 | ) | ||||||
| Total liabilities, redeemable restricted units and stockholder's equity | $ | 910,487 | $ | 820,571 | |||||
| Condensed Consolidated Cash Flow Statements (unaudited) | |||||||||
| Year Ended December 31, | |||||||||
| (in thousands) | 2018 | 2017 | |||||||
| Operating activities | |||||||||
| Net income (loss) | $ | 26,106 | $ | (3,937 | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||
| Early extinguishment of debt | 7,753 | - | |||||||
| Impairments of assets held for sale and equity method investments | 12,497 | - | |||||||
| Equity in loss of affiliated companies | 381 | 1,350 | |||||||
| Gain on life insurance proceeds | (4,000 | ) | - | ||||||
| Deferred income tax provision (benefit) | 5,691 | (20,156 | ) | ||||||
| Provision for losses on receivables | 104 | - | |||||||
| Depreciation and amortization | 90,831 | 91,340 | |||||||
| Losses on sale of property and equipment | 7,123 | 2,029 | |||||||
| Share based compensation | 2,248 | 673 | |||||||
| Original issue discount and deferred financing amortization | 1,728 | 3,791 | |||||||
| Interest paid-in-kind | (7,516 | ) | 1,452 | ||||||
| Gain on sale of Xpress Global Systems | - | (1,026 | ) | ||||||
| Purchase commitment interest expense (income) | (192 | ) | (698 | ) | |||||
| Changes in operating assets and liabilities | |||||||||
| Receivables | (8,972 | ) | (32,051 | ) | |||||
| Prepaid insurance and licenses | (4,006 | ) | 45 | ||||||
| Operating supplies | 725 | (510 | ) | ||||||
| Other assets | (3,438 | ) | (529 | ) | |||||
| Accounts payable and other accrued liabilities | (21,020 | ) | 41,930 | ||||||
| Accrued wages and benefits | 6,304 | 1,691 | |||||||
| Net cash provided by operating activities | 112,347 | 85,394 | |||||||
| Investing activities | |||||||||
| Payments for purchases of property and equipment | (223,939 | ) | (240,417 | ) | |||||
| Proceeds from sales of property and equipment | 55,370 | 32,183 | |||||||
| Acquisition of business | - | (2,219 | ) | ||||||
| Proceeds on life insurance | 2,980 | - | |||||||
| Other | (500 | ) | (758 | ) | |||||
| Net cash used in investing activities | (166,089 | ) | (211,211 | ) | |||||
| Financing activities | |||||||||
| Borrowings under lines of credit | 292,332 | 387,973 | |||||||
| Payments under lines of credit | (321,665 | ) | (358,640 | ) | |||||
| Borrowings under long-term debt | 362,013 | 224,102 | |||||||
| Payments of long-term debt | (504,180 | ) | (118,834 | ) | |||||
| Payments of financing costs and original issue discount | (4,165 | ) | (5,844 | ) | |||||
| Proceeds from issuance of 16,668,000 shares, net of expenses | 246,615 | - | |||||||
| Payments of long-term consideration for business acquisition | (1,010 | ) | - | ||||||
| Repurchase of membership units | (217 | ) | (523 | ) | |||||
| Book overdraft | (3,537 | ) | 3,537 | ||||||
| Net cash provided by financing activities | 66,186 | 131,771 | |||||||
| Cash included in assets held for sale | (11,784 | ) | - | ||||||
| Net change in cash and cash equivalents | 660 | 5,954 | |||||||
| Cash and cash equivalents | |||||||||
| Beginning of year | 9,232 | 3,278 | |||||||
| End of year | $ | 9,892 | $ | 9,232 | |||||
| Key Operating Factors & Truckload Statistics (unaudited) | |||||||||||||||||||||||
| Quarter Ended December 31, | % | Year Ended December 31, | % | ||||||||||||||||||||
| 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||||
| Operating Revenue: | |||||||||||||||||||||||
| Truckload1 | $ | 357,675 | $ | 334,676 | 6.9 | % | $ | 1,379,266 | $ | 1,243,955 | 10.9 | % | |||||||||||
| Fuel Surcharge | 46,692 | 40,744 | 14.6 | % | 182,832 | 138,212 | 32.3 | % | |||||||||||||||
| Brokerage | 64,855 | 55,813 | 16.2 | % | 242,817 | 173,218 | 40.2 | % | |||||||||||||||
| Total Operating Revenue | $ | 469,222 | $ | 431,233 | 8.8 | % | $ | 1,804,915 | $ | 1,555,385 | 16.0 | % | |||||||||||
| Operating Income: | |||||||||||||||||||||||
| Truckload | $ | 18,138 | $ | 9,707 | 86.9 | % | $ | 69,088 | $ | 25,200 | 174.2 | % | |||||||||||
| Brokerage | $ | 3,004 | $ | 2,750 | nm | $ | 9,818 | $ | 3,408 | nm | |||||||||||||
| $ | 21,142 | $ | 12,457 | 69.7 | % | $ | 78,906 | $ | 28,608 | 175.8 | % | ||||||||||||
| Operating Ratio: | |||||||||||||||||||||||
| Operating Ratio | 95.5 | % | 97.1 | % | -1.7 | % | 95.6 | % | 98.2 | % | -2.6 | % | |||||||||||
| Adjusted Operating Ratio2 | 92.5 | % | 95.3 | % | -2.9 | % | 94.1 | % | 97.4 | % | -3.4 | % | |||||||||||
| Truckload Operating Ratio | 95.5 | % | 97.4 | % | -2.0 | % | 95.6 | % | 98.2 | % | -2.6 | % | |||||||||||
| Adjusted Truckload Operating Ratio2 | 91.9 | % | 95.3 | % | -3.5 | % | 93.7 | % | 97.3 | % | -3.6 | % | |||||||||||
| Brokerage Operating Ratio | 95.4 | % | 95.1 | % | 0.3 | % | 96.0 | % | 98.0 | % | -2.1 | % | |||||||||||
| Truckload Statistics:3 | |||||||||||||||||||||||
| Revenue Per Mile1 | $ | 2.196 | $ | 2.048 | 7.2 | % | $ | 2.127 | $ | 1.940 | 9.6 | % | |||||||||||
| Average Tractors - | |||||||||||||||||||||||
| Company Owned | 4,708 | 5,367 | -12.3 | % | 4,880 | 5,434 | -10.2 | % | |||||||||||||||
| Owner Operators | 1,587 | 933 | 70.1 | % | 1,383 | 794 | 74.2 | % | |||||||||||||||
| Total Average Tractors | 6,295 | 6,300 | -0.1 | % | 6,263 | 6,228 | 0.6 | % | |||||||||||||||
|
Average Revenue Miles Per Tractor
Per Week |
1,775 | 1,827 | -2.8 | % | 1,801 | 1,824 | -1.3 | % | |||||||||||||||
|
Average Revenue Per Tractor
Per Week1 |
$ | 3,897 | $ | 3,741 | 4.2 | % | $ | 3,831 | $ | 3,539 | 8.3 | % | |||||||||||
| Total Miles | 161,605 | 165,663 | -2.4 | % | 645,829 | 650,545 | -0.7 | % | |||||||||||||||
| Total Company Miles | 118,819 | 138,558 | -14.2 | % | 493,420 | 556,831 | -11.4 | % | |||||||||||||||
| Total Independent Contractor Miles | 42,786 | 27,104 | 57.9 | % | 152,409 | 93,713 | 62.6 | % | |||||||||||||||
| Independent Contractor fuel surcharge | 11,953 | 6,437 | 85.7 | % | 41,898 | 19,877 | 110.8 | % | |||||||||||||||
| 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 December 31, | Year Ended December 31, | ||||||||||||||||
| (in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||||
| GAAP Presentation: | |||||||||||||||||
| Total revenue | $ | 469,222 | $ | 431,233 | $ | 1,804,915 | $ | 1,555,385 | |||||||||
| Total operating expenses | (448,080 | ) | (418,776 | ) | (1,726,009 | ) | (1,526,777 | ) | |||||||||
| Operating Income | $ | 21,142 | $ | 12,457 | $ | 78,906 | $ | 28,608 | |||||||||
| Operating ratio | 95.5 | % | 97.1 | % | 95.6 | % | 98.2 | % | |||||||||
| Non-GAAP Presentation | |||||||||||||||||
| Total revenue | $ | 469,222 | $ | 431,233 | $ | 1,804,915 | $ | 1,555,385 | |||||||||
| Fuel surcharge | (46,692 | ) | (40,744 | ) | (182,832 | ) | (138,212 | ) | |||||||||
| Revenue, excluding fuel surcharge | 422,530 | 390,489 | 1,622,083 | 1,417,173 | |||||||||||||
| Total operating expenses | 448,080 | 418,776 | 1,726,009 | 1,526,777 | |||||||||||||
| Adjusted for: | |||||||||||||||||
| Fuel surcharge | (46,692 | ) | (40,744 | ) | (182,832 | ) | (138,212 | ) | |||||||||
| Fuel purchase arrangements | - | (6,063 | ) | - | (8,424 | ) | |||||||||||
| IPO-related costs1 | - | - | (6,437 | ) | - | ||||||||||||
| Impairment of assets held for sale2 | (10,693 | ) | (10,693 | ) | |||||||||||||
| Adjusted operating expenses | 390,695 | 371,969 | 1,526,047 | 1,380,141 | |||||||||||||
| Adjusted Operating Income | $ | 31,835 | $ | 18,520 | $ | 96,036 | $ | 37,032 | |||||||||
| Adjusted operating ratio | 92.5 | % | 95.3 | % | 94.1 | % | 97.4 | % | |||||||||
| Non-GAAP Reconciliation - Truckload Adjusted Operating Income and Adjusted Operating Ratio (unaudited) | |||||||||||||||||
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||||
| (in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Truckload GAAP Presentation: | |||||||||||||||||
| Total Truckload revenue | $ | 404,367 | $ | 375,420 | $ | 1,562,098 | $ | 1,382,167 | |||||||||
| Total Truckload operating expenses | (386,229 | ) | (365,713 | ) | (1,493,010 | ) | (1,356,967 | ) | |||||||||
| Truckload Operating Income | $ | 18,138 | $ | 9,707 | $ | 69,088 | $ | 25,200 | |||||||||
| Truckload Operating ratio | 95.5 | % | 97.4 | % | 95.6 | % | 98.2 | % | |||||||||
| Truckload Non-GAAP Presentation | |||||||||||||||||
| Total Truckload revenue | $ | 404,367 | $ | 375,420 | $ | 1,562,098 | $ | 1,382,167 | |||||||||
| Fuel surcharge | (46,692 | ) | (40,744 | ) | (182,832 | ) | (138,212 | ) | |||||||||
| Revenue, excluding fuel surcharge | 357,675 | 334,676 | 1,379,266 | 1,243,955 | |||||||||||||
| Total Truckload operating expenses | 386,229 | 365,713 | 1,493,010 | 1,356,967 | |||||||||||||
| Adjusted for: | |||||||||||||||||
| Fuel surcharge | (46,692 | ) | (40,744 | ) | (182,832 | ) | (138,212 | ) | |||||||||
| Fuel purchase arrangements | - | (6,063 | ) | - | (8,424 | ) | |||||||||||
| IPO-related costs1 | - | - | (6,437 | ) | - | ||||||||||||
| Impairment of assets held for sale2 | (10,693 | ) | - | (10,693 | ) | - | |||||||||||
| Truckload Adjusted operating expenses | 328,844 | 318,906 | 1,293,048 | 1,210,331 | |||||||||||||
| Truckload Adjusted Operating Income | $ | 28,831 | $ | 15,770 | $ | 86,218 | $ | 33,624 | |||||||||
| Truckload Adjusted operating ratio | 91.9 | % | 95.3 | % | 93.7 | % | 97.3 | % | |||||||||
| 1 During the second quarter, we incurred one time expenses for the IPO related to pay out of our SAR program and deal bonuses totaling $6,437. |
| 2During the fourth quarter, we incurred an impairment charge related to the exit of our U.S.- Mexico cross border business. |
| Non-GAAP Reconciliation - Adjusted Net Income and EPS (unaudited) | |||||||||||||||
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
| (in thousands, except per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
| GAAP: Net Income (Loss) attributable to controlling interest | $ | 6,997 | $ | 9,499 | $ | 24,899 | $ | (4,060 | ) | ||||||
| Adjusted for: | |||||||||||||||
| Income tax provision (benefit) | 6,779 | (9,984 | ) | 7,860 | (17,187 | ) | |||||||||
| Income (loss) before income taxes attributable to controlling interest | $ | 13,776 | $ | (485 | ) | $ | 32,759 | $ | (21,247 | ) | |||||
| Fuel purchase arrangements | - | 6,063 | - | 8,424 | |||||||||||
| Debt extinguishment costs in conjunction with IPO1 | - | - | 7,753 | - | |||||||||||
| Impairment of assets held for sale and other equity method investments2 | 12,497 | - | 12,497 | - | |||||||||||
| IPO-related costs3 | - | - | 6,437 | - | |||||||||||
| Adjusted income (loss) before income taxes | 26,273 | 5,578 | 59,446 | (12,823 | ) | ||||||||||
| Adjusted income tax provision (benefit) | 6,779 | 4,699 | 11,380 | (1,618 | ) | ||||||||||
| Non-GAAP: Adjusted Net Income (Loss) attributable to controlling interest | $ | 19,494 | $ | 879 | $ | 48,066 | $ | (11,205 | ) | ||||||
| GAAP: Earnings per diluted share | $ | 0.14 | $ | 1.49 | $ | 0.83 | $ | (0.64 | ) | ||||||
| Adjusted for: | |||||||||||||||
| Income tax provision (benefit) attributable to controlling interest | 0.14 | (1.56 | ) | 0.26 | (2.69 | ) | |||||||||
| Income (loss) before income taxes attributable to controlling interest | $ | 0.28 | $ | (0.07 | ) | $ | 1.09 | $ | (3.33 | ) | |||||
| Fuel purchase arrangements | - | 0.95 | - | 1.32 | |||||||||||
| Debt extinguishment costs in conjunction with IPO1 | - | - | 0.26 | - | |||||||||||
| IPO-related costs3 | - | - | 0.21 | - | |||||||||||
| Impairment of assets held for sale and other equity method investments2 | 0.25 | - | 0.41 | - | |||||||||||
| Adjusted income (loss) before income taxes | 0.53 | 0.88 | 1.97 | (2.01 | ) | ||||||||||
| Adjusted income tax provision (benefit) | 0.14 | 0.74 | 0.38 | (0.25 | ) | ||||||||||
| Non-GAAP: Adjusted Net Income (Loss) attributable to controlling interest | 0.39 | $ | 0.14 | $ | 1.59 | $ | (1.75 | ) | |||||||
| 1 In connection with the IPO, we recognized an early extinguishment of debt charge related to our then existing term loan. |
| 2During the fourth quarter, we incurred impairment charges related to the exit of our U.S.- Mexico cross border business and dispositions of other equity method investments. |
| 3 During the second quarter, we incurred one time expenses for the IPO related to pay out of our SAR program and deal bonuses totaling $6,437. |