-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LqKRvcJE3dV1hZX6ZUqjBTkBcCnS8CGDpVJ2pMrfARARV0IftxM21fOQEd00HQye 0aIk2c2BPoZgbyy6fTXr0Q== 0000931763-97-001415.txt : 19970815 0000931763-97-001415.hdr.sgml : 19970815 ACCESSION NUMBER: 0000931763-97-001415 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: US XPRESS ENTERPRISES INC CENTRAL INDEX KEY: 0000923571 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 621378182 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-24806 FILM NUMBER: 97662884 BUSINESS ADDRESS: STREET 1: 2931 SOUTH MARKET ST CITY: CHATTANOOGA STATE: TN ZIP: 37410 BUSINESS PHONE: 6156967377 MAIL ADDRESS: STREET 1: 2931 SOUTH MARKET ST CITY: CHATTONOOGA STATE: TN ZIP: 37410 10-Q 1 FOR QUARTER ENDED JUNE 30, 1997 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended Commission file number JUNE 30, 1997 0-24806 U.S. XPRESS ENTERPRISES, INC. (Exact name of registrant as specified in its charter) NEVADA 62-1378182 (State or other jurisdiction of (I.R.S. employer identification no.) Incorporation or organization) 2931 SOUTH MARKET STREET CHATTANOOGA, TENNESSEE 37410 (423) 697-7377 (Address of principal executive (Zip Code) (Registrant's telephone no.) offices) -------------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- ------ As of June 30, 1997, 9,077,007 shares of the registrant's Class A common stock, par value $.01 per share, and 3,040,262 shares of Class B common stock, par value $.01 per share, were outstanding. U.S. XPRESS ENTERPRISES, INC. INDEX PAGE NO. -------- PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements................. 3 - ------- Consolidated Statements of Operations for the Three Months Ended June 30, 1997 and 1996............................ 4 Consolidated Balance Sheets as of June 30, 1997 and March 31, 1997.................. 5 Consolidated Statements of Cash Flows for the Three Months Ended June 30, 1997 and 1996......... 7 Notes to Consolidated Financial Statements........ 8 Item 2. Management's Discussion and Analysis - --------- of Financial Condition and Results of Operations........................................ 11 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K.................. 19 - ------ SIGNATURES................................................... 20 2 U.S. XPRESS ENTERPRISES, INC. PART I FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS The interim consolidated financial statements contained herein reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the financial condition and results of operations for the periods presented. They have been prepared by the Company, without audit, in accordance with the instructions to Form 10-Q and the rules and regulations of the Securities and Exchange Commission and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the three months ended June 30, 1997 are not necessarily indicative of the results that may be expected for the year ending March 31, 1998. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted only of items that are of a normal recurring nature. These interim consolidated financial statements should be read in conjunction with the Company's latest annual consolidated financial statements (which are included in the Company's Form 10-K for the fiscal year ended March 31, 1997 filed with the Securities and Exchange Commission on June 25, 1997). 3 U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (Unaudited) THREE MONTHS ENDED JUNE 30, ---------------------------- 1997 1996 ------- ------- OPERATING REVENUE $107,933 $87,817 -------- ------- OPERATING EXPENSES: Salaries, Wages and Employee Benefits, Including Contract Wages 43,758 36,208 Fuel and Fuel Taxes 16,450 14,351 Vehicle Rents 7,224 4,706 Depreciation & Amortization 3,172 4,316 Purchased Transportation 8,843 6,394 Operating Expense & Supplies 6,926 6,119 Insurance Premiums & Claims 3,550 4,289 Operating Taxes & Licenses 1,700 1,453 Communications & Utilities 1,874 1,547 Cost of Installation Supplies Sold 1,839 2,191 Building Rental 1,446 1,192 Bad Debt Expense 304 208 General & Other Operating 3,461 2,655 Gain on Sale of Equipment (649) (53) ------ ------ Total Operating Expenses 99,898 85,576 ------ ------ INCOME FROM OPERATIONS 8,035 2,241 ------ ------ OTHER INCOME AND (EXPENSES): Interest Expense (1,582) (1,352) Other Income 11 7 ------ ----- (1,571) (1,345) ------ ------- INCOME BEFORE INCOME TAX PROVISION 6,464 896 INCOME TAX PROVISION (2,585) (344) ----- ---- NET INCOME $ 3,879 $ 552 -------- -------- EARNINGS PER COMMON SHARE $ 0.32 $ 0.05 -------- ------- WEIGHTED AVERAGE COMMON SHARES AND COMMON SHARE EQUIVALENTS OUTSTANDING 12,221 12,135 -------- ------ (See accompanying Notes to Consolidated Financial Statements) 4 U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands) ASSETS JUNE 30, 1997 MARCH 31, 1997 - ------------------------------------------- ------------- -------------- (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 5,270 $ 5,092 Customer receivables, net of allowance 60,307 50,056 Other receivables 2,284 3,969 Prepaid insurance and licenses 2,936 3,853 Operating and Installation supplies 4,308 4,904 Deferred income taxes 4,443 4,443 Other current assets 664 719 ------- ------ Total current assets 80,212 73,036 ------- ------ PROPERTY AND EQUIPMENT, AT COST: Land and buildings 5,955 2,717 Revenue and service equipment 114,322 112,076 Furniture and equipment 12,394 11,265 Leasehold improvements 10,140 7,619 -------- -------- 142,811 133,677 Less accumulated depreciation and amortization (41,937) (39,803) --------- --------- Net property and equipment 100,874 93,874 -------- --------- OTHER ASSETS: Goodwill, net 12,813 7,700 Other 4,688 3,474 ------- -------- Total other assets 17,501 11,174 ------- --------- TOTAL ASSETS $198,587 $178,084 ======== ======== (See accompanying Notes to Consolidated Financial Statements) 5 U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands) LIABILITIES AND STOCKHOLDERS' EQUITY JUNE 30, 1997 MARCH 31, 1997 ------------- --------------- (Unaudited) CURRENT LIABILITIES: Accounts payable $ 9,912 $ 8,708 Accrued wages and benefits 5,723 5,086 Claims and insurance accruals 7,714 9,601 Other accrued liabilities 5,472 2,804 Current maturities of long-term debt 12,666 13,008 --------- --------- Total current liabilities 41,487 39,207 --------- --------- LONG-TERM DEBT, NET OF CURRENT MATURITIES 73,067 59,318 --------- --------- DEFERRED INCOME TAXES 14,543 14,543 --------- --------- OTHER LONG-TERM LIABILITIES 2,279 1,854 --------- --------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock, $.01 par value, 2,000,000 shares authorized, no shares issued - - Common stock Class A, $.01 par value, 30,000,000 shares authorized, 9,077,007 and 9,046,044 shares issued and outstanding at June 30, 1997 and March 31, 1997, respectively 90 90 Common stock Class B, $.01 par value, 7,500,000 shares authorized, 3,040,262 shares issued and outstanding at June 30, 1997 and March 31, 1997 30 30 Additional paid-in capital 34,002 33,832 Retained earnings 33,322 29,443 Notes receivable from stockholders (233) (233) --------- --------- Total stockholders' equity 67,211 63,162 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 198,587 $ 178,084 ========= ========= (See accompanying Notes to Consolidated Financial Statements) 6 U.S. XPRESS ENTERPRISES AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (Unaudited) THREE MONTHS ENDED JUNE 30, ------------------------- 1997 1996 -------- ------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 3,879 $ 552 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation & Amortization 3,172 4,316 Gain on sale of equipment (649) (53) Change in receivables (5,361) (7,394) Change in prepaid insurance 1,379 2,415 Change in operating supplies 634 82 Change in other assets (243) (140) Change in accounts payable and other accrued liabilities (285) 1,194 Change in accrued wages and benefits 593 (1,424) Other 2 4 -------- ------- Net cash provided by (used in) operating activities 3,121 (448) -------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Payments for purchase of property and equipment (3,912) (5,291) Proceeds from sales of property and equipment 7,414 1,086 Acquisition of businesses, net of cash acquired (4,990) - -------- ------- Net cash used in investing activities (1,488) (4,205) -------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowing under lines of credit 2,000 3,000 Payment of long-term debt (21,212) (3,420) Borrowings under long-term debt 17,590 2,225 Proceeds from exercise of stock options 168 - Decrease in other liabilities - (736) -------- ------- Net cash provided by (used in) financing activities (1,454) 1,069 -------- ------- NET INCREASE (DECREASE) IN CASH 179 (3,584) CASH, beginning of period 5,091 4,378 ------- ------- CASH, end of period $ 5,270 $ 794 ======= ======= Cash paid during the period for interest $ 1,509 $ 1,514 ------- ------- Cash paid during the period for income taxes $ 1,161 $ 142 ======= ======= (See accompanying Notes to Consolidated Financial Statements) 7 U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. ORGANIZATION AND OPERATIONS U.S. Xpress Enterprises, Inc. ("Enterprises" or the "Company") is a holding company which operates primarily through three wholly-owned subsidiaries: U.S. Xpress, Inc. ("U.S. Xpress"), a national truckload carrier that provides time-definite and expedited services in the United States, Canada and Mexico, regional truckload services in the Western and Southeastern United States and logistics services that specialize in serving air cargo shippers; CSI/Crown, Inc. ("CSI/Crown") which provides logistics services to the floorcovering industry, including freight consolidation, transportation, warehousing services and installation supplies; and JTI, Inc.("JTI"), a regional truckload carrier serving primarily a 24-state region in the Midwest and South. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and accounts have been eliminated. PROPERTY AND EQUIPMENT Depreciation and amortization of property and equipment is computed using the straight-line method for financial reporting purposes and accelerated methods for tax purposes over the estimated useful lives of the related assets (net of salvage value) as follows: Buildings........................................ 10-30 years Revenue and service equipment.................... 3-8 years Furniture and equipment.......................... 3-7 years Leasehold improvements........................... 5-6 years Upon the retirement of property and equipment, the related asset cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the Company's statement of operations, with the exception of gains on trade-ins, which are included in the basis of the new asset. INCOME TAXES Income taxes are accounted for using the provisions of Statement of Financial Accounting Standards No. 109 ("SFAS No. 109"), "Accounting for Income Taxes". Under SFAS No. 109, deferred tax assets and liabilities are computed based on the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate. Deferred income tax expenses or credits are based on the changes in the asset or liability from period to period. 8 U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (UNAUDITED) CONTRACT WAGES Prior to August 1996, the Company leased a substantial portion of its personnel, including drivers, from an independent personnel leasing company. Under the lease agreements, the Company paid a contracted amount per person and the personnel leasing company had the responsibility for payroll, unemployment insurance and workers' compensation claims. In August 1996, the lease agreements with the independent personnel leasing company were terminated and the personnel previously leased under these agreements became employees of the Company. Effective January 1, 1997, the Company entered into an agreement with Employee Solutions, Inc. ("ESI"). ESI coordinates the processing and administration of the Company's payroll, including tax reporting, group health benefits and worker's compensation. EARNINGS PER SHARE Earnings per share is computed based on the weighted average number of common shares outstanding plus the dilutive effect of outstanding common stock options. RECLASSIFICATIONS Certain reclassifications have been made in the fiscal 1997 financial statements to conform with the fiscal 1998 presentation. 3. COMMITMENTS AND CONTINGENCIES The Company is party to certain legal proceedings incidental to its business. The ultimate disposition of these matters, in the opinion of management, based in part on the advice of legal counsel, will not have a material adverse effect on the Company's financial position or results of operations. The Company has letters of credit of $3,055,000 outstanding at June 30, 1997. The letters of credit are maintained primarily to support the Company's insurance program. 4. DEBT The Company has an unsecured credit agreement (the "Credit Agreement") with a group of banks. The Credit Agreement operates as a revolving credit facility until November 1997, at which time it will convert to a three year installment loan, if not extended or renewed. Borrowings (including letters of credit) under the Credit Agreement are limited to the lesser of: (a) 90% of the book value of eligible revenue equipment plus 85% of eligible accounts receivable; or (b) $50,000,000. At June 30, 1997, $12.5 million was unused and available to the Company under the Credit Agreement. 9 The Credit Agreement contains a number of covenants that limit, among other things, the payment of dividends, the incurrence of additional debt, and the pledge of assets as security for other indebtedness. The Credit Agreement also requires the Company to meet certain financial tests, including a minimum amount of tangible net worth, a minimum fixed charge coverage and a maximum amount of leverage. The Company was in compliance with these covenants during the period ended June 30, 1997. 5. ACQUISITION OF ROSEDALE TRANSPORT AND JTI, INC. The Company completed its acquisition of JTI on April 30, 1997. The Company paid cash for JTI in a transaction accounted for as a purchase. The Company also acquired certain assets from Rosedale Transport, Inc. ("Rosedale") on April 1, 1997. Accordingly, the results of operations of JTI and Rosedale are included in the Consolidated Statements of Operations from the date of acquisition. The pro forma effect of these transactions on prior period financial statements is not significant. 6. HEDGING The Company has only limited involvement with derivative financial instruments and does not use them for trading purposes. They are periodically used to hedge the effects of fluctuations in the price of fuel. The resulting gains or losses are accounted for as a decrease or increase in fuel expense in the period the fuel is purchased. At June 30, 1997, the Company had commitments to purchase approximately 500,000 gallons of fuel a month through April 1998. The fair value of the fuel contracts are not significant. The Company is exposed to fuel hedging transaction losses in the event of nonperformance by counterparties, but management does not expect any counterparty to fail to meet its obligations. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The Company provides transportation and logistics services throughout the United States and in parts of Canada and Mexico, specializing in time-definite and expedited longhaul and regional truckload services. U.S. Xpress provides time-definite and expedited longhaul and regional truckload services, as well as transportation and logistics services to the air freight industry. CSI/Crown is the leader in providing logistics services to manufacturers and retailers in the floorcovering industry. JTI provides regional truckload carrier services in the Midwest. RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, the components of the consolidated statements of income expressed as a percentage of operating revenue: THREE MONTHS ENDED JUNE 30, ---------------------- 1997 1996 ---------- --------- OPERATING REVENUE 100.0 % 100.0 % ------- ------- OPERATING EXPENSES: Salaries, Wages and Employee Benefits, Including Contract Wages 40.6 41.2 Fuel and Fuel Taxes 15.3 16.3 Vehicle Rents 6.7 5.4 Depreciation & Amortization 2.9 4.9 Purchased Transportation 8.2 7.3 Operating Expense & Supplies 6.4 7.0 Insurance Premiums & Claims 3.3 4.9 Operating Taxes & Licenses 1.6 1.7 Communications & Utilities 1.7 1.8 Cost of Installation Supplies Sold 1.7 2.5 Building Rental 1.3 1.4 Bad Debt Expense 0.3 0.2 General & Other Operating 3.2 3.0 Gain on Sale of Equipment (0.6) (0.1) ------ ----- Total Operating Expenses 92.6 97.5 ------ ----- INCOME FROM OPERATIONS 7.4 2.5 ------ ----- OTHER INCOME AND (EXPENSES): Interest Expense, net (1.4) (1.5) Other Income - - ------ ----- (1.4) (1.5) ------ ----- INCOME BEFORE INCOME TAX PROVISION 6.0 1.0 INCOME TAX PROVISION (2.4) (0.4) ------ ----- NET INCOME 3.6 % 0.6 % ------ ----- 11 COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1997 TO THE THREE MONTHS ENDED JUNE 30, 1996 Operating revenue during the three month period ended June 30, 1997 increased $20.1 million, or 22.9%, to $107.9 million, compared to $87.8 million during the same period in fiscal 1997. This increase resulted partially from the first quarter acquisition of JTI and Rosedale, which together contributed approximately $7.0 million of the $20.1 million increase. U.S. Xpress linehaul operations contributed $10.4 million to the increase due to increased revenue miles. Operating expenses represented 92.6% of operating revenue for the three months ended June 30, 1997, compared to 97.5% during the same period in fiscal 1997. Salaries, wages and employee benefits as a percentage of operating revenue were 40.6% during the three months ended June 30, 1997, compared to 41.2% during the same period in fiscal 1997. This decrease is a result of increased use of owner-operators from the acquisition of JTI and increased use of outside linehaul carriers from the acquisition of Rosedale. All owner-operator expenses and purchased linehaul services are reflected as purchased transportation. Fuel and fuel taxes as a percentage of operating revenue were 15.3% during the three months ended June 30, 1997, compared to 16.3% during the same period in fiscal 1997. This decrease was primarily attributable to a 4.7 decrease in average price per gallon, and a 3.1% increase in the average miles per gallon. The percentage decrease was mitigated by logistics and non-transportation revenue of $5.9 million during the three months ended June 30, 1997, compared to $5.6 million during the same period in fiscal 1997. As a percentage of operating revenue, excluding logistics and non-transportation revenue, fuel and fuel taxes were 16.1% during the three months ended June 30, 1997, compared to 17.5% during the same period in fiscal 1997. The Company's exposure to increases in fuel prices is managed by fuel surcharges to its customers and, on a limited basis, by hedges against fluctuations in fuel prices. Vehicle rents as a percentage of operating revenue was 6.7% during the three months ended June 30 1997, compared to 5.4% during the same period in fiscal 1997. Depreciation and amortization as a percentage of operating revenue was 2.9% for the three months ended June 30, 1997, compared to 4.9% during the same period in fiscal 1997. Overall, as a percentage of operating revenue, vehicle rents and depreciation were 9.6% during the three months ended June 30, 1997, compared to 10.3% during the same period in fiscal 1997. As a percentage of operating revenue, excluding logistics and non-transportation revenue, vehicle rents and depreciation were 10.2% during the three months ended June 30, 1997, compared to 11.0% during the same period in fiscal 1997. The Company expects that depreciation expense will continue to be a lower percentage of operating revenue and vehicle rent will be a higher percentage of operating revenue as the Company is finding it more advantageous to lease, rather than purchase, revenue equipment at this time. Purchased transportation as a percentage of operating revenue was 8.2% during the three months ended June 30, 1997, compared to 7.3% during the same period in fiscal 1997. This increase resulted primarily from increased third party transportation purchases by CSI/Crown, due in part from the acquisition of Rosedale in April 1997 and increased owner-operator expenses from the May 1997 acquisition of JTI. Operating expenses and supplies as a percentage of operating revenue were 6.4% during the three months ended June 30, 1997, compared to 7.0% during the same period in fiscal 1997. This decrease was due primarily to reductions in maintenance expenses and the increased use of owner-operators after the acquisition of JTI. 12 Insurance premiums and claims as a percentage of operating revenue were 3.3% during the three months ended June 30, 1997, compared to 4.9% during the same period in fisal 1997. This decrease was primarily due to obtaining new insurance policies in late fiscal 1997 at rates more favorable to the Company. Cost of installation supplies sold during the three months ended June 30, 1997 were $1.8 million, compared to $2.2 million during the same period in fiscal 1997. This decrease was due to a decrease in installation supplies sold to $2.4 million during the three months ended June 30, 1997, compared to $2.9 million during the same period in fiscal 1997. Income from operations for the three months ended June 30, 1997 increased $5.8 million, or 258.5%, to $8.0 million from $2.2 million during the same period in fiscal 1997. As a percentage of operating revenue, income from operations was 7.4% in 1997, compared to 2.5% in fiscal 1997. LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of liquidity during the three month period ended June 30, 1997 were funds provided by operations, borrowings under long- term debt facilities, lines of credit and proceeds from the sale of used property and equipment. At June 30, 1997, the Company had in place a $50 million credit facility with a group of banks with a weighted average interest rate of 7.18%, of which $12.5 million was available for borrowing. In the remainder of fiscal 1998, the Company's primary sources of liquidity are expected to be funds from operations, borrowings under lines of credit and borrowings under installment notes payable. Cash generated from operations was $3.1 million during the first quarter of fiscal 1998, compared to a use of $0.5 million during the same period of fiscal 1997. Net cash used in investment activities was $1.5 million in the first quarter of fiscal 1998, compared to $4.2 million during the same period of fiscal 1997. Of the cash used in investment activities, $3.9 million was used to acquire additional property and equipment in the first quarter of fiscal 1998. The Company anticipates that expenditures (net of trade-ins) for the acquisition of revenue equipment will be approximately $68 million in fiscal 1998 and will be either acquired by purchases or financed through operating leases. The Company used $5.0 million in the acquisition of JTI and Rosedale in the first quarter of fiscal 1998. Net cash used for financing activities was $1.5 million in the first quarter of fiscal 1998, compared to $1.1 million provided by financing activities during the same period of fiscal 1997. Net repayments under lines of credit and long-term debt were $1.6 million in the first quarter of fiscal 1998, compared to net borrowings of $1.8 million during the same period of fiscal 1997. Borrowings under long-term debt during the first three months of fiscal 1998 were $17.6 million, compared to $2.2 million during the same period of fiscal 1997. Payments of long-term debt during the first quarter of fiscal 1998 were $21.2 million, compared to $3.4 million during the same period of fiscal 1997. Increased borrowings and payments of long-term debt resulted primarily from the refinancing of high interest rate loans assumed by the Company in its acquisition of JTI. 13 In June, 1997, the Company entered into a $10 million loan and security agreement maturing July 1, 2001, the proceeds of which were used to repay indebtedness under the revolving line of credit. The note is collateralized by certain property and equipment. Management believes that funds provided by operations and from borrowings under lines of credit will be sufficient to fund its cash needs and anticipated capital expenditures through at least the next twelve months. This Form 10-Q contains certain forward looking information that is subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Without limitation, these risks and uncertainties include economic recessions or downturns in customers' business cycles, excessive increases in capacity within the truckload markets, decreased demand of transportation services offered by the Company, rapid fluctuations in fuel pricing or availability, increases in interest rates, and the availability of qualified drivers. Readers are urged to carefully review and consider the various disclosures made by the Company in this Form 10-Q and in the Company's Form 10-K for the year ended March 31, 1997. 14 U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) No reports on Form 8-K were filed during the quarter for which this report is filed. 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. U.S. XPRESS ENTERPRISES, INC. (REGISTRANT) DATE: AUGUST 14, 1997 BY: /s/ Patrick E. Quinn --------------- ----------------------- PATRICK E. QUINN PRESIDENT DATE: AUGUST 14, 1997 BY: /s/ Ray M. Harlin --------------- ---------------------- RAY M. HARLIN PRINCIPAL FINANCIAL OFFICER 16 EX-27 2 ARTICLE 5 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS MAR-31-1997 APR-01-1997 JUN-30-1997 5,270 0 60,307 0 4,308 80,212 142,811 41,937 198,587 41,487 0 0 0 120 67,091 198,587 0 107,933 0 99,594 (11) 304 1,582 6,464 2,585 0 0 0 0 3,879 .32 .32 L/T Debt 73,067
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