CHATTANOOGA, Tenn.--(BUSINESS WIRE)--U.S. Xpress Enterprises, Inc. (NYSE: USX) today announced financial and operating results for the second quarter of 2022.
Second Quarter 2022 Highlights compared to Second Quarter 2021
- Operating revenue of $553.7 million compared to $475.0 million
- Operating income of $6.5 million compared to $8.9 million
- Adjusted operating income1 of $2.5 million compared to $8.9 million
- Loss per share of $0.01 compared to earnings per diluted share (EPS) of $0.37
- Adjusted loss per share1 of $0.05 compared to EPS of $0.08
“Second quarter highlights included sequential overall fleet growth and improved margins in our Brokerage segment and Dedicated division,” said Eric Fuller, President and CEO. “However, these positive accomplishments were partially offset by higher net fuel and claims expense in the quarter, particularly in our OTR division. While our Variant fleet grew to approximately 1,900 tractors, its results continued to lag due to lower utilization and higher turnover. Looking ahead to the third quarter, our immediate priorities remain improving utilization in our Variant fleet, lowering our fixed costs per tractor and growing our overall fleet size.”
Second Quarter 2022 Financial Performance
| Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||
| Operating revenue | $ |
553,703 |
|
$ |
475,021 |
|
$ |
1,070,891 |
|
$ |
925,781 |
|
|
| Revenue, excluding fuel surcharge | $ |
479,185 |
|
$ |
437,533 |
|
$ |
943,512 |
|
$ |
855,174 |
|
|
| Operating income | $ |
6,468 |
|
$ |
8,906 |
|
$ |
6,258 |
|
$ |
16,904 |
|
|
| Net income (loss) attributable to controlling interest | $ |
(554 |
) |
$ |
19,096 |
|
$ |
(9,456 |
) |
$ |
21,634 |
|
|
| Earnings (losses) per diluted share | $ |
(0.01 |
) |
$ |
0.37 |
|
$ |
(0.19 |
) |
$ |
0.42 |
|
|
| Adjusted net income (loss) attributable to controlling interest1 | $ |
(2,300 |
) |
$ |
4,185 |
|
$ |
(3,359 |
) |
$ |
6,723 |
|
|
| Adjusted earnings (losses) per diluted share1 | $ |
(0.05 |
) |
$ |
0.08 |
|
$ |
(0.06 |
) |
$ |
0.13 |
|
|
| Operating Ratio | |||||||||||||
| Truckload operating ratio |
|
99.8 |
% |
|
97.7 |
% |
|
99.9 |
% |
|
97.9 |
% |
|
| Brokerage operating ratio |
|
93.7 |
% |
|
99.8 |
% |
|
97.2 |
% |
|
99.2 |
% |
|
| Operating ratio |
|
98.8 |
% |
|
98.1 |
% |
|
99.4 |
% |
|
98.2 |
% |
|
| Adjusted operating ratio1 |
|
99.5 |
% |
|
98.0 |
% |
|
99.4 |
% |
|
98.0 |
% |
|
| 1 Second quarter 2022 adjustments included a pretax $4.0 million gain on sale of a terminal and a pretax non-cash mark-to-market adjustment of $1.8 million related to a strategic investment. See "Non-GAAP Financial Measures" section of this earnings release for more detail including GAAP to Non-GAAP reconciliations | |||||||||||||
Operating revenue was $553.7 million, an increase of $78.7 million compared to the second quarter of 2021. The increase was a combination of increased revenue in the Company’s Truckload segment of $49.6 million and an increase of $37.0 million in fuel surcharge revenue partially offset by a decrease in Brokerage segment revenue of $7.9 million. Revenue, excluding the impact of fuel surcharge revenues increased $41.7 million to $479.2 million, an increase of 9.5% compared to the second quarter of 2021.
Operating income, on a GAAP basis, was $6.5 million for the second quarter of 2022 compared to $8.9 million in the second quarter of 2021 on both a GAAP and adjusted basis1. Second quarter 2022 operating expenses included an unfavorable settlement resulting in increased claims expense of $3.4 million from an insurance claim which originated prior to our 2018 IPO and for which the primary liable party lacked sufficient assets to pay. In addition, on an adjusted basis1, second quarter 2022 operating income excluded a $4.0 million gain on the sale of a terminal which was leased to a former subsidiary.
Net loss attributable to controlling interest for the second quarter of 2022 was $0.6 million, or $0.01 per diluted share, compared to net income of $19.1 million, or $0.37 per diluted share, in the second quarter of 2021. As a reminder, second quarter 2021 net income attributable to controlling interest benefitted from a $14.9 million, net of tax unrealized gain on a strategic equity investment.
Adjusted net loss attributable to controlling interest1 was $2.3 million or $0.05 per diluted share and excludes an unrealized loss on a strategic equity investment of $1.4 million, net of tax, and the gain on sale of the terminal mentioned above. This compares to net income attributable to controlling interest of $4.2 million, or $0.08 per diluted share, in the second quarter of 2021.
Variant Update
The Company continues to grow Variant’s fleet, exiting the quarter with 1,889 tractors comprising approximately half of the overall OTR division. In the second quarter, Variant generated revenue of $87.7 million, net of fuel surcharge revenue, a 66.0% increase compared to the same period of the prior year. The year-over-year increase in revenue was primarily due to a 72.4% increase in seated tractors in the fleet.
Sequentially, Variant grew its fleet by approximately 200 tractors while average revenue per tractor declined primarily due to a lower rate per mile caused by the decline in the spot market during the quarter, which was partially offset by higher contract rates in the quarter.
Variant Key Metrics
| Quarter Ended, | ||||||||
| June 30, | March 31, | |||||||
2022 |
2022 |
|||||||
| Ending truck count |
|
1,889 |
|
|
1,691 |
|
||
| Preventable accidents, per mm |
|
7.87 |
|
|
8.12 |
|
||
| Turnover |
|
150 |
% |
|
148 |
% |
||
| Average revenue miles per tractor per week (Utilization) |
|
1,573 |
|
|
1,593 |
|
||
| Average revenue per tractor per week | $ |
3,863 |
|
$ |
4,065 |
|
||
Mr. Fuller commented, “Sequentially, we were successful in continuing to grow our Variant fleet, and we continued to focus on restoring Variant’s utilization to its previous levels. We lost some of our momentum in revenue productivity due to the rapid deterioration in the spot market which more than offset the higher contract rates in the quarter. Additionally, we expect the progress that we made in the quarter bringing more structure and discipline to our fleet operations will benefit utilization and driver turnover in the coming quarters, both of which are critical to improving our overall financial results.”
Truckload Segment
| Quarter Ended June 30, | Six Months Ended June 30, | ||||||||
2022 |
2021 |
2022 |
2021 |
||||||
| Over-the-road | |||||||||
| Average revenue per tractor per week1 | $ |
3,909 |
$ |
3,837 |
$ |
3,875 |
$ |
3,778 |
|
| Average revenue per mile1 | $ |
2.543 |
$ |
2.278 |
$ |
2.544 |
$ |
2.223 |
|
| Average revenue miles per tractor per week |
|
1,537 |
|
1,684 |
|
1,523 |
|
1,699 |
|
| Average tractors |
|
3,700 |
|
3,318 |
|
3,677 |
|
3,369 |
|
| Dedicated | |||||||||
| Average revenue per tractor per week1 | $ |
4,913 |
$ |
4,336 |
$ |
4,813 |
$ |
4,243 |
|
| Average revenue per mile1 | $ |
2.883 |
$ |
2.448 |
$ |
2.849 |
$ |
2.420 |
|
| Average revenue miles per tractor per week |
|
1,704 |
|
1,772 |
|
1,690 |
|
1,753 |
|
| Average tractors |
|
2,655 |
|
2,531 |
|
2,620 |
|
2,603 |
|
| Consolidated | |||||||||
| Average revenue per tractor per week1 | $ |
4,328 |
$ |
4,053 |
$ |
4,266 |
$ |
3,981 |
|
| Average revenue per mile1 | $ |
2.694 |
$ |
2.354 |
$ |
2.679 |
$ |
2.311 |
|
| Average revenue miles per tractor per week |
|
1,607 |
|
1,722 |
|
1,592 |
|
1,723 |
|
| Average tractors |
|
6,355 |
|
5,849 |
|
6,297 |
|
5,972 |
|
| 1 Excluding fuel surcharge revenues | |||||||||
The Truckload segment generated revenue, excluding the impact of our fuel surcharge program, of $390.7 million compared to $341.0 million in the second quarter of 2021. This increase in Truckload segment revenue was due to a 14.4% increase in average revenue per mile combined with an increase in average tractors in the quarter of 506 which was partially offset by an 6.7% decrease in revenue miles per tractor.
Truckload operating income was $0.9 million compared to $8.7 million in the second quarter of 2021 on a GAAP basis. The decrease in Truckload operating income was primarily due to lower utilization and increased net fuel expense in the quarter, while the Truckload rate increases covered the general inflation in the business on a year-over-year basis.
Adjusted truckload operating loss1, which excludes the $4.0 million gain on sale of the terminal mentioned above was $3.1 million in the second quarter of 2022 compared to adjusted Truckload operating income1 of $8.7 million in the second quarter of 2021.
Brokerage Segment
| Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||
| Brokerage revenue | $ |
88,526 |
|
$ |
96,488 |
|
$ |
182,454 |
|
$ |
178,328 |
|
|
| Gross margin % |
|
20.6 |
% |
|
12.0 |
% |
|
16.9 |
% |
|
12.9 |
% |
|
| Operating income |
|
5,558 |
|
|
161 |
|
|
5,075 |
|
|
1,432 |
|
|
| Operating ratio |
|
93.7 |
% |
|
99.8 |
% |
|
97.2 |
% |
|
99.2 |
% |
|
| Load count |
|
33,522 |
|
|
44,676 |
|
|
75,634 |
|
|
86,861 |
|
|
| Percentage of loads processed on digital platform |
|
90.3 |
% |
|
74.7 |
% |
|
87.5 |
% |
|
70.6 |
% |
|
The Brokerage segment generated revenue of $88.5 million, which was a decline of 8.3% compared to the second quarter of 2021. The decrease in Brokerage segment revenue was driven by a 25.0% decrease in load count which more than offset the 22.3% increase in revenue per load compared to the second quarter of 2021.
Segment operating income was $5.6 million compared to $0.2 million in the second quarter of 2021. The increase in Brokerage segment operating income was primarily the result of lower purchased transportation expense in the second quarter as compared to the second quarter of 2021.
Liquidity and Capital Allocation
At the end of the second quarter of 2022, the Company had $155.7 million of liquidity (defined as cash balances plus availability under the Company’s revolving credit facility), $418.5 million of net debt (defined as long-term debt, including current maturities, less cash balances), and $270.4 million of stockholders’ equity.
Year-to-date, through June 30, 2022, capital expenditures, net of proceeds were $66.9 million, and exclude equipment financed under operating leases. As a reminder, the majority of the Company’s annual capital expenditures relate to tractors and trailers, for which the Company generally uses a combination of loan financing agreements and finance lease arrangements to fund these acquisitions.
Outlook
Mr. Fuller commented, “Looking ahead to the third quarter, we are focused on continued overall fleet growth, restoring Variant’s utilization to its previous levels which we believe will drive improvement in Variant’s other key metrics as well as a continued focus on cost discipline and allocating capital to projects which we believe will drive the business forward. Our focused efforts in these areas are key to demonstrating the operating leverage potential of our model.”
Conference Call Information
The Company will host a conference call and simultaneous webcast to discuss its second quarter 2022 financial and operating results on August 3, 2022, at 5:00 p.m. ET. The conference call can be accessed live by dialing 1-877-423-9813 or, for international callers, 1-201-689-8465 and asking to be joined to the US Xpress Second Quarter 2022 Earnings Conference Call. The webcast can be accessed on the Investor Relations website at investor.usxpress.com.
Supplemental Financial Information
Additional information regarding the Company’s operating results is provided below as well as on the Company’s investor page at investor.usxpress.com.
(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.
| Non-GAAP Reconciliation - Adjusted Operating Income and Adjusted Operating Ratio (unaudited) | ||||||||||||||||
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in thousands) | 2022 |
2021 |
2022 |
2021 |
||||||||||||
| GAAP Presentation: | ||||||||||||||||
| Total revenue | $ |
553,703 |
|
$ |
475,021 |
|
$ |
1,070,891 |
|
$ |
925,781 |
|
||||
| Total operating expenses |
|
(547,235 |
) |
|
(466,115 |
) |
|
(1,064,633 |
) |
|
(908,877 |
) |
||||
| Operating income | $ |
6,468 |
|
$ |
8,906 |
|
$ |
6,258 |
|
$ |
16,904 |
|
||||
| Operating ratio |
|
98.8 |
% |
|
98.1 |
% |
|
99.4 |
% |
|
98.2 |
% |
||||
| Non-GAAP Presentation | ||||||||||||||||
| Total revenue | $ |
553,703 |
|
$ |
475,021 |
|
$ |
1,070,891 |
|
$ |
925,781 |
|
||||
| Fuel surcharge |
|
(74,518 |
) |
|
(37,488 |
) |
|
(127,379 |
) |
|
(70,607 |
) |
||||
| Revenue, excluding fuel surcharge |
|
479,185 |
|
|
437,533 |
|
|
943,512 |
|
|
855,174 |
|
||||
| Total operating expenses |
|
547,235 |
|
|
466,115 |
|
|
1,064,633 |
|
|
908,877 |
|
||||
| Adjusted for: | ||||||||||||||||
| Fuel surcharge |
|
(74,518 |
) |
|
(37,488 |
) |
|
(127,379 |
) |
|
(70,607 |
) |
||||
| Impairment charges1 |
|
- |
|
|
- |
|
|
(2,970 |
) |
|
- |
|
||||
| Gain on sale of terminal2 |
|
4,002 |
|
|
- |
|
|
4,002 |
|
|
- |
|
||||
| Adjusted operating expenses |
|
476,719 |
|
|
428,627 |
|
|
938,286 |
|
|
838,270 |
|
||||
| Adjusted operating income | $ |
2,466 |
|
$ |
8,906 |
|
$ |
5,226 |
|
$ |
16,904 |
|
||||
| Adjusted operating ratio |
|
99.5 |
% |
|
98.0 |
% |
|
99.4 |
% |
|
98.0 |
% |
||||
| 1During the first quarter of 2022, we incurred a non-cash adjustment of $2,970 due to the write off of obsolete technology | ||||||||||||||||
| 2During the second quarter of 2022, we recognized a gain of $4,002 on sale of terminal which was leased to a former subsidiary | ||||||||||||||||
| Non-GAAP Reconciliation - Truckload Adjusted Operating Income and Adjusted Operating Ratio (unaudited) | ||||||||||||||||
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in thousands) | 2022 |
2021 |
2022 |
2021 |
||||||||||||
| Truckload GAAP Presentation: | ||||||||||||||||
| Total Truckload revenue | $ |
465,177 |
|
$ |
378,533 |
|
$ |
888,437 |
|
$ |
747,453 |
|
||||
| Total Truckload operating expenses |
|
(464,267 |
) |
|
(369,788 |
) |
|
(887,254 |
) |
|
(731,981 |
) |
||||
| Truckload operating income | $ |
910 |
|
$ |
8,745 |
|
$ |
1,183 |
|
$ |
15,472 |
|
||||
| Truckload operating ratio |
|
99.8 |
% |
|
97.7 |
% |
|
99.9 |
% |
|
97.9 |
% |
||||
| Truckload Non-GAAP Presentation | ||||||||||||||||
| Total Truckload revenue | $ |
465,177 |
|
$ |
378,533 |
|
$ |
888,437 |
|
$ |
747,453 |
|
||||
| Fuel surcharge |
|
(74,518 |
) |
|
(37,488 |
) |
|
(127,379 |
) |
|
(70,607 |
) |
||||
| Revenue, excluding fuel surcharge |
|
390,659 |
|
|
341,045 |
|
|
761,058 |
|
|
676,846 |
|
||||
| Total Truckload operating expenses |
|
464,267 |
|
|
369,788 |
|
|
887,254 |
|
|
731,981 |
|
||||
| Adjusted for: | ||||||||||||||||
| Fuel surcharge |
|
(74,518 |
) |
|
(37,488 |
) |
|
(127,379 |
) |
|
(70,607 |
) |
||||
| Impairment charges1 |
|
- |
|
|
- |
|
|
(2,235 |
) |
|
- |
|
||||
| Gain on sale of terminal2 |
|
4,002 |
|
|
- |
|
|
4,002 |
|
|
- |
|
||||
| Truckload Adjusted operating expenses |
|
393,751 |
|
|
332,300 |
|
|
761,642 |
|
|
661,374 |
|
||||
| Truckload Adjusted operating income (loss) | $ |
(3,092 |
) |
$ |
8,745 |
|
$ |
(584 |
) |
$ |
15,472 |
|
||||
| Truckload Adjusted operating ratio |
|
100.8 |
% |
|
97.4 |
% |
|
100.1 |
% |
|
97.7 |
% |
||||
| 1During the first quarter of 2022, we incurred a non-cash adjustment of $2,235 due to the write off of obsolete technology | ||||||||||||||||
| 2During the second quarter of 2022, we recognized a gain of $4,002 on sale of terminal which was leased to a former subsidiary | ||||||||||||||||
| Non-GAAP Reconciliation - Adjusted Net Income and EPS (unaudited) | ||||||||||||||||
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in thousands, except per share data) | 2022 |
2021 |
2022 |
2021 |
||||||||||||
| GAAP: Net income (loss) attributable to controlling interest | $ |
(554 |
) |
$ |
19,096 |
|
$ |
(9,456 |
) |
$ |
21,634 |
|
||||
| Adjusted for: | ||||||||||||||||
| Income tax provision (benefit) |
|
79 |
|
|
6,443 |
|
|
(2,070 |
) |
|
8,093 |
|
||||
| Income (loss) before income taxes attributable to controlling interest | $ |
(475 |
) |
$ |
25,539 |
|
$ |
(11,526 |
) |
$ |
29,727 |
|
||||
| Unrealized loss (gain) on equity investment1 |
|
1,757 |
|
|
(20,191 |
) |
|
10,120 |
|
|
(20,191 |
) |
||||
| Gain on sale of terminal2 |
|
(4,002 |
) |
|
- |
|
|
(4,002 |
) |
|
- |
|
||||
| Gain on sale of equity method investment3 |
|
- |
|
|
- |
|
|
(1,258 |
) |
|
- |
|
||||
| Impairment charges4 |
|
- |
|
|
- |
|
|
2,970 |
|
|
- |
|
||||
| Adjusted income (loss) before income taxes |
|
(2,720 |
) |
|
5,348 |
|
|
(3,696 |
) |
|
9,536 |
|
||||
| Adjusted income tax provision (benefit) |
|
(420 |
) |
|
1,163 |
|
|
(337 |
) |
|
2,813 |
|
||||
| Non-GAAP: Adjusted net income (loss) attributable to controlling interest | $ |
(2,300 |
) |
$ |
4,185 |
|
$ |
(3,359 |
) |
$ |
6,723 |
|
||||
| GAAP: Earnings (losses) per diluted share | $ |
(0.01 |
) |
$ |
0.37 |
|
$ |
(0.19 |
) |
$ |
0.42 |
|
||||
| Adjusted for: | ||||||||||||||||
| Income tax expense attributable to controlling interest |
|
- |
|
|
0.12 |
|
|
(0.04 |
) |
|
0.15 |
|
||||
| Income (loss) before income taxes attributable to controlling interest | $ |
(0.01 |
) |
$ |
0.49 |
|
$ |
(0.23 |
) |
$ |
0.57 |
|
||||
| Unrealized loss (gain) on equity investment1 |
|
0.03 |
|
|
(0.39 |
) |
|
0.20 |
|
|
(0.39 |
) |
||||
| Gain on sale of terminal2 |
|
(0.08 |
) |
|
- |
|
|
(0.08 |
) |
|
- |
|
||||
| Gain on sale of equity method investment3 |
|
- |
|
|
- |
|
|
(0.02 |
) |
|
- |
|
||||
| Impairment charges4 |
|
- |
|
|
- |
|
|
0.06 |
|
|
- |
|
||||
| Adjusted income (loss) before income taxes |
|
(0.06 |
) |
|
0.10 |
|
|
(0.07 |
) |
|
0.18 |
|
||||
| Adjusted income tax provision (benefit) |
|
(0.01 |
) |
|
0.02 |
|
|
(0.01 |
) |
|
0.05 |
|
||||
| Non-GAAP: Adjusted earnings (losses) per diluted share attributable to controlling interest | $ |
(0.05 |
) |
$ |
0.08 |
|
$ |
(0.06 |
) |
$ |
0.13 |
|
||||
| 1During 2022 and 2021, we recognized an unrealized loss (gain) on a strategic equity investment | ||||||||||||||||
| 2During the second quarter of 2022, we recognized a gain of $4,002 on sale of terminal which was leased to a former subsidiary | ||||||||||||||||
| 3During the first quarter of 2022, we incurred a gain on sale related to an equity method investment in a former wholly owned subsidiary of $1,258 | ||||||||||||||||
| 4During the first quarter of 2022, we incurred a non-cash adjustment of $2,970 due to the write off of obsolete technology | ||||||||||||||||
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 Variant fleet and overall fleet size, driver turnover, utilization in our Variant fleet, lowering fixed and other costs, allocating capital to projects that will drive the business forward, the expected impact of our Variant 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 and availability; 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; independent contractors we contract could be deemed by regulators or the judicial process to be employees; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, intermodal, and brokerage (including digital brokerage) competitors; changes in regulatory requirements that increase costs, decrease efficiency, or reduce the availability of drivers; safety-related evaluations and rankings under the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program; increasing attention on environmental, social and governance matters; 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; credit, reputational and relationship risks of certain of our current and former equity investments; the dual class structure of our common stock has the effect of concentrating voting control with certain members of the Fuller and Quinn families, which limits or precludes the ability of other stockholders to influence corporate matters; our ability to maintain effective internal controls without material weaknesses; 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.
About US Xpress
Through its subsidiaries, U.S. Xpress Enterprises, Inc. offers customers over-the-road, dedicated, and brokerage services. Founded in 1985, the Company utilizes a combination of smart technology, a modern fleet of tractors and a network of highly trained, professional drivers to efficiently move freight for a wide variety of customers. U.S. Xpress implements a range of digital initiatives and technology to drive innovation in the industry, streamline the value chain for customers and improve the overall driver experience.
| Condensed Consolidated Income Statements (unaudited) | ||||||||||||||||
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in thousands, except per share data) | 2022 |
2021 |
2022 |
2021 |
||||||||||||
| Operating Revenue: | ||||||||||||||||
| Revenue, excluding fuel surcharge | $ |
479,185 |
|
$ |
437,533 |
|
$ |
943,512 |
|
$ |
855,174 |
|
||||
| Fuel surcharge |
|
74,518 |
|
|
37,488 |
|
|
127,379 |
|
|
70,607 |
|
||||
| Total operating revenue |
|
553,703 |
|
|
475,021 |
|
|
1,070,891 |
|
|
925,781 |
|
||||
| Operating Expenses: | ||||||||||||||||
| Salaries, wages and benefits |
|
181,418 |
|
|
144,500 |
|
|
350,446 |
|
|
286,503 |
|
||||
| Fuel and fuel taxes |
|
89,253 |
|
|
43,783 |
|
|
154,296 |
|
|
84,187 |
|
||||
| Vehicle rents |
|
24,336 |
|
|
21,547 |
|
|
48,630 |
|
|
43,010 |
|
||||
| Depreciation and amortization, net of (gain) loss |
|
14,929 |
|
|
23,205 |
|
|
33,646 |
|
|
45,587 |
|
||||
| Purchased transportation |
|
140,185 |
|
|
157,489 |
|
|
290,769 |
|
|
299,150 |
|
||||
| Operating expense and supplies |
|
47,679 |
|
|
34,443 |
|
|
92,493 |
|
|
66,958 |
|
||||
| Insurance premiums and claims |
|
23,401 |
|
|
18,933 |
|
|
43,540 |
|
|
40,710 |
|
||||
| Operating taxes and licenses |
|
3,752 |
|
|
3,247 |
|
|
7,668 |
|
|
6,516 |
|
||||
| Communications and utilities |
|
3,864 |
|
|
2,964 |
|
|
7,408 |
|
|
5,352 |
|
||||
| General and other operating |
|
18,418 |
|
|
16,004 |
|
|
35,737 |
|
|
30,904 |
|
||||
| Total operating expenses |
|
547,235 |
|
|
466,115 |
|
|
1,064,633 |
|
|
908,877 |
|
||||
| Operating Income |
|
6,468 |
|
|
8,906 |
|
|
6,258 |
|
|
16,904 |
|
||||
| Other Expenses (Income): | ||||||||||||||||
| Interest expense, net |
|
4,586 |
|
|
3,557 |
|
|
8,393 |
|
|
7,244 |
|
||||
| Other, net |
|
1,757 |
|
|
(20,191 |
) |
|
8,862 |
|
|
(20,191 |
) |
||||
|
6,343 |
|
|
(16,634 |
) |
|
17,255 |
|
|
(12,947 |
) |
|||||
| Income (Loss) Before Income Taxes |
|
125 |
|
|
25,540 |
|
|
(10,997 |
) |
|
29,851 |
|
||||
| Income Tax Provision (Benefit) |
|
79 |
|
|
6,443 |
|
|
(2,070 |
) |
|
8,093 |
|
||||
| Net Income (Loss) |
|
46 |
|
|
19,097 |
|
|
(8,927 |
) |
|
21,758 |
|
||||
| Net Income attributable to non-controlling interest |
|
600 |
|
|
1 |
|
|
529 |
|
|
124 |
|
||||
| Net Income (Loss) attributable to controlling interest | $ |
(554 |
) |
$ |
19,096 |
|
$ |
(9,456 |
) |
$ |
21,634 |
|
||||
| Income (Loss) Per Share | ||||||||||||||||
| Basic earnings (losses) per share | $ |
(0.01 |
) |
$ |
0.38 |
|
$ |
(0.19 |
) |
$ |
0.43 |
|
||||
| Basic weighted average shares outstanding |
|
51,221 |
|
|
50,334 |
|
|
51,036 |
|
|
50,156 |
|
||||
| Diluted earnings (losses) per share | $ |
(0.01 |
) |
$ |
0.37 |
|
$ |
(0.19 |
) |
$ |
0.42 |
|
||||
| Diluted weighted average shares outstanding |
|
51,221 |
|
|
51,848 |
|
|
51,036 |
|
|
51,705 |
|
||||
| Condensed Consolidated Balance Sheets (unaudited) | |||||||
| June 30, | December 31, | ||||||
| (in thousands) | 2022 |
2021 |
|||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ |
3,145 |
|
$ |
5,695 |
|
|
| Customer receivables, net of allowance of $44 and $11, respectively |
|
247,721 |
|
|
231,687 |
|
|
| Other receivables |
|
18,800 |
|
|
18,046 |
|
|
| Prepaid insurance and licenses |
|
11,654 |
|
|
13,867 |
|
|
| Operating supplies |
|
10,613 |
|
|
9,550 |
|
|
| Assets held for sale |
|
16,713 |
|
|
11,831 |
|
|
| Other current assets |
|
28,058 |
|
|
32,020 |
|
|
| Total current assets |
|
336,704 |
|
|
322,696 |
|
|
| Property and equipment, at cost |
|
927,939 |
|
|
890,933 |
|
|
| Less accumulated depreciation and amortization |
|
(377,926 |
) |
|
(370,112 |
) |
|
| Net property and equipment |
|
550,013 |
|
|
520,821 |
|
|
| Other assets: | |||||||
| Operating lease right-of-use assets |
|
292,373 |
|
|
292,347 |
|
|
| Goodwill |
|
59,221 |
|
|
59,221 |
|
|
| Intangible assets, net |
|
23,956 |
|
|
24,129 |
|
|
| Other |
|
48,862 |
|
|
50,829 |
|
|
| Total other assets |
|
424,412 |
|
|
426,526 |
|
|
| Total assets | $ |
1,311,129 |
|
$ |
1,270,043 |
|
|
| Liabilities and Stockholders' Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ |
124,768 |
|
$ |
126,910 |
|
|
| Book overdraft |
|
4,438 |
|
|
7,096 |
|
|
| Accrued wages and benefits |
|
51,010 |
|
|
45,011 |
|
|
| Claims and insurance accruals |
|
46,042 |
|
|
44,309 |
|
|
| Other accrued liabilities |
|
5,550 |
|
|
5,962 |
|
|
| Current portion of operating leases |
|
92,833 |
|
|
88,375 |
|
|
| Current maturities of long-term debt and finance leases |
|
113,599 |
|
|
85,117 |
|
|
| Total current liabilities |
|
438,240 |
|
|
402,780 |
|
|
| Long-term debt and finance leases, net of current maturities |
|
308,069 |
|
|
290,392 |
|
|
| Less debt issuance costs |
|
(333 |
) |
|
(357 |
) |
|
| Net long-term debt and finance leases |
|
307,736 |
|
|
290,035 |
|
|
| Deferred income taxes |
|
21,384 |
|
|
24,301 |
|
|
| Other long-term liabilities |
|
25,431 |
|
|
14,457 |
|
|
| Claims and insurance accruals, long-term |
|
43,933 |
|
|
54,819 |
|
|
| Noncurrent operating lease liability |
|
201,784 |
|
|
205,362 |
|
|
| Commitments and contingencies |
|
- |
|
|
- |
|
|
| Stockholders' Equity: | |||||||
| Common stock |
|
512 |
|
|
505 |
|
|
| Additional paid-in capital |
|
270,873 |
|
|
267,621 |
|
|
| Retained earnings (deficit) |
|
(1,016 |
) |
|
8,440 |
|
|
| Stockholders' equity |
|
270,369 |
|
|
276,566 |
|
|
| Noncontrolling interest |
|
2,252 |
|
|
1,723 |
|
|
| Total stockholders' equity |
|
272,621 |
|
|
278,289 |
|
|
| Total liabilities and stockholders' equity | $ |
1,311,129 |
|
$ |
1,270,043 |
|
|
| Condensed Consolidated Cash Flow Statements (unaudited) | |||||||
| Six Months Ended June 30, | |||||||
| (in thousands) | 2022 |
2021 |
|||||
| Operating activities | |||||||
| Net income (loss) | $ |
(8,927 |
) |
$ |
21,758 |
|
|
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
| Deferred income tax provision (benefit) |
|
(2,917 |
) |
|
7,624 |
|
|
| Depreciation and amortization |
|
38,983 |
|
|
41,036 |
|
|
| (Gains) losses on sale of property and equipment |
|
(5,337 |
) |
|
4,551 |
|
|
| Share based compensation |
|
2,965 |
|
|
3,791 |
|
|
| Other |
|
(926 |
) |
|
381 |
|
|
| Unrealized loss (gain) on investment |
|
10,120 |
|
|
(20,191 |
) |
|
| Changes in operating assets and liabilities | |||||||
| Receivables |
|
(17,502 |
) |
|
(27,163 |
) |
|
| Prepaid insurance and licenses |
|
2,283 |
|
|
4,580 |
|
|
| Operating supplies |
|
(993 |
) |
|
(724 |
) |
|
| Other assets |
|
(4,789 |
) |
|
(1,967 |
) |
|
| Accounts payable and other accrued liabilities |
|
2,025 |
|
|
5,954 |
|
|
| Accrued wages and benefits |
|
5,807 |
|
|
771 |
|
|
| Net cash provided by operating activities |
|
20,792 |
|
|
40,401 |
|
|
| Investing activities | |||||||
| Payments for purchases of property and equipment |
|
(94,448 |
) |
|
(62,851 |
) |
|
| Proceeds from sales of property and equipment |
|
27,527 |
|
|
47,660 |
|
|
| Net cash used in investing activities |
|
(66,921 |
) |
|
(15,191 |
) |
|
| Financing activities | |||||||
| Borrowings under lines of credit |
|
262,100 |
|
|
138,812 |
|
|
| Payments under lines of credit |
|
(216,800 |
) |
|
(123,812 |
) |
|
| Borrowings under long-term debt |
|
44,514 |
|
|
38,116 |
|
|
| Payments of long-term debt and finance leases |
|
(44,191 |
) |
|
(83,961 |
) |
|
| Payments of financing costs |
|
- |
|
|
(100 |
) |
|
| Tax withholding related to net share settlement of restricted stock awards |
|
(431 |
) |
|
(1,211 |
) |
|
| Proceeds from long-term consideration for sale of subsidiary |
|
320 |
|
|
305 |
|
|
| Proceeds from issuance of common stock under ESPP |
|
725 |
|
|
538 |
|
|
| Book overdraft |
|
(2,658 |
) |
|
5,873 |
|
|
| Net cash provided by (used in) financing activities |
|
43,579 |
|
|
(25,440 |
) |
|
| Net change in cash and cash equivalents |
|
(2,550 |
) |
|
(230 |
) |
|
| Cash and cash equivalents | |||||||
| Beginning of year |
|
5,695 |
|
|
5,505 |
|
|
| End of period | $ |
3,145 |
|
$ |
5,275 |
|
|
| Key Operating Factors & Truckload Statistics (unaudited) | |||||||||||||||||||
| Quarter Ended June 30, | % | Six Months Ended June 30, | % | ||||||||||||||||
2022 |
2021 |
Change | 2022 |
2021 |
Change | ||||||||||||||
| Operating Revenue: | |||||||||||||||||||
| Truckload1 | $ |
390,659 |
|
$ |
341,045 |
|
14.5 |
% |
$ |
761,058 |
|
$ |
676,846 |
|
12.4 |
% |
|||
| Fuel Surcharge |
|
74,518 |
|
|
37,488 |
|
98.8 |
% |
|
127,379 |
|
|
70,607 |
|
80.4 |
% |
|||
| Brokerage |
|
88,526 |
|
|
96,488 |
|
-8.3 |
% |
|
182,454 |
|
|
178,328 |
|
2.3 |
% |
|||
| Total Operating Revenue | $ |
553,703 |
|
$ |
475,021 |
|
16.6 |
% |
$ |
1,070,891 |
|
$ |
925,781 |
|
15.7 |
% |
|||
| Operating Income : | |||||||||||||||||||
| Truckload | $ |
910 |
|
$ |
8,745 |
|
-89.6 |
% |
$ |
1,183 |
|
$ |
15,472 |
|
-92.4 |
% |
|||
| Brokerage | 5,558 |
|
161 |
|
3352.2 |
% |
5,075 |
|
1,432 |
|
254.4 |
% |
|||||||
$ |
6,468 |
|
$ |
8,906 |
|
-27.4 |
% |
$ |
6,258 |
|
$ |
16,904 |
|
-63.0 |
% |
||||
| Operating Ratio: | |||||||||||||||||||
| Operating Ratio |
|
98.8 |
% |
|
98.1 |
% |
0.7 |
% |
|
99.4 |
% |
|
98.2 |
% |
1.2 |
% |
|||
| Adjusted Operating Ratio2 |
|
99.5 |
% |
|
98.0 |
% |
1.5 |
% |
|
99.4 |
% |
|
98.0 |
% |
1.5 |
% |
|||
| Truckload Operating Ratio |
|
99.8 |
% |
|
97.7 |
% |
2.1 |
% |
|
99.9 |
% |
|
97.9 |
% |
2.0 |
% |
|||
| Adjusted Truckload Operating Ratio2 |
|
100.8 |
% |
|
97.4 |
% |
3.4 |
% |
|
100.1 |
% |
|
97.7 |
% |
2.4 |
% |
|||
| Brokerage Operating Ratio |
|
93.7 |
% |
|
99.8 |
% |
-6.1 |
% |
|
97.2 |
% |
|
99.2 |
% |
-2.0 |
% |
|||
| Truckload Statistics: | |||||||||||||||||||
| Revenue Per Mile1 | $ |
2.694 |
|
$ |
2.354 |
|
14.4 |
% |
$ |
2.679 |
|
$ |
2.311 |
|
15.9 |
% |
|||
| Average Tractors - | |||||||||||||||||||
| Company Owned |
|
5,392 |
|
|
4,517 |
|
19.4 |
% |
|
5,303 |
|
|
4,556 |
|
16.4 |
% |
|||
| Owner Operators |
|
963 |
|
|
1,332 |
|
-27.7 |
% |
|
994 |
|
|
1,417 |
|
-29.9 |
% |
|||
| Total Average Tractors |
|
6,355 |
|
|
5,849 |
|
8.7 |
% |
|
6,297 |
|
|
5,973 |
|
5.4 |
% |
|||
| Average Revenue Miles Per Tractor Per Week |
|
1,607 |
|
|
1,722 |
|
-6.7 |
% |
|
1,592 |
|
|
1,723 |
|
-7.6 |
% |
|||
| Average Revenue Per Tractor Per Week1 | $ |
4,328 |
|
$ |
4,053 |
|
6.8 |
% |
$ |
4,266 |
|
$ |
3,981 |
|
7.2 |
% |
|||
| Total Miles |
|
146,908 |
|
|
145,405 |
|
1.0 |
% |
|
288,181 |
|
|
294,968 |
|
-2.3 |
% |
|||
| Total Company Miles |
|
122,765 |
|
|
111,558 |
|
10.0 |
% |
|
239,214 |
|
|
223,263 |
|
7.1 |
% |
|||
| Total Independent Contractor Miles |
|
24,143 |
|
|
33,847 |
|
-28.7 |
% |
|
48,967 |
|
|
71,705 |
|
-31.7 |
% |
|||
| Independent Contractor fuel surcharge | $ |
13,037 |
|
$ |
8,422 |
|
54.8 |
% |
$ |
22,634 |
|
$ |
16,082 |
|
40.7 |
% |
|||
| 1 Excluding fuel surcharge revenues | |||||||||||||||||||
| 2 See "Non-GAAP Financial Measures" section of this earnings release for more detail including GAAP to Non-GAAP reconciliations | |||||||||||||||||||
