The Truckload segment achieved an operating ratio of 96.2% for the fourth quarter of 2020, representing a 290
basis point improvement as compared to the 99.1% operating ratio achieved in the fourth quarter of 2019. The segment delivered an adjusted operating ratio1 of 96.0% for the fourth quarter of 2020, representing a 310 basis point
improvement as compared to the adjusted operating ratio1 of 99.1% achieved in the year ago quarter. This improvement was primarily the result of higher rate per mile combined with lower claims expense and other costs partially offset
by fewer average tractors in the quarter.
In the OTR division, average revenue per tractor per week increased 11.9% compared with the fourth quarter of
2019. The improvement primarily reflected an 11.1% increase in average revenue per mile and a 0.8% increase in revenue miles per tractor per week.
In the Dedicated division, average revenue per tractor per week increased $49 per tractor per week, or 1.2%,
compared to the fourth quarter of 2019 primarily a result of a 2.3% increase in revenue miles per tractor per week partially offset by a 1.0% reduction in average revenue per mile.
Mr. Fuller added, “The market remained robust through the fourth quarter which contributed to improved demand
and spot pricing. That said, qualified driver availability continues to be challenging given the large number of drivers who have left the industry as a result of the Drug and Alcohol Clearinghouse combined with fewer new drivers entering the
industry due in part to lower school capacity related to COVID-19. Given this backdrop, we experienced higher driver and capacity costs in certain accounts within our Dedicated division without the offsetting benefit of improved rates which
typically adjust more slowly up and down under the dedicated contracts. These driver and capacity challenges in Dedicated drove an approximate 400 basis point sequential decline in the division’s operating margins in the fourth quarter. Looking
forward, we are actively engaged with our Dedicated customers and expect to address the increase in capacity costs over the course of the first quarter. We believe our corrective actions will allow that division to return to historical margins
over the following two quarters, and are optimistic that the growth in Variant will deliver further improved profitability over the balance of the year.”
The Company continues to make progress on its initiative to have 900 tractors in the digital fleet component
of its OTR division by the end of the first quarter of 2021. The average number of tractors in this division increased approximately 40% to 688 tractors sequentially from the third quarter of 2020. This growth in truck count combined with
improved utilization compared to the Company’s legacy OTR division allowed Variant’s revenue to grow to 9.4% of Truckload revenues, sequentially, from 7.1% in the third quarter.
The Brokerage segment continues to provide additional selectivity for the Company’s assets to optimize yield
while at the same time offering more capacity solutions to customers. Brokerage segment revenue increased to $76.4 million in the fourth quarter of 2020 compared to $54.1 million in the fourth quarter of 2019, primarily as a result of
increased revenue per load. Brokerage operating income was $0.8 million in the fourth quarter of 2020 as compared to an operating loss of $2.0 million in the year ago quarter.
Mr. Fuller noted, “I am very pleased with our progress in improving the profitability of our Brokerage
segment in the fourth quarter. The segment’s operating ratio improved 920 bps to 98.9%, as compared to the third quarter of 2020, and this significant margin expansion was achieved while growing revenues by more than 35% sequentially. This
improvement was driven by a shift in the business mix between spot and contract pricing combined with an increase in our contract pricing. Additionally, our team processed 62.1% of our Brokerage transactions digitally in the fourth quarter, a
significant increase from 1.4% in the prior year quarter. As we drive more volume over our digital platform, our Brokerage segment becomes much more scalable allowing us to profitably drive growth as we look to the years ahead.”
Liquidity and Capital Resources
At the end of the fourth quarter 2020, the Company had $175.3 million of liquidity (defined as cash plus availability under the Company’s revolving credit facility), $353.5 million of net debt (defined as long-term debt, including current maturities, less cash
balances), and $260.9 million of total stockholders' equity.
Capital expenditures, net of proceeds, related primarily to tractors and trailers were $111.6 million for
2020, excluding equipment financed under operating leases. The Company expects its net capital expenditures to approximate $130 to $150 million for the full year of 2021.
Outlook
Mr. Fuller concluded, “Our Company is at a clear inflection point as we proved the Variant business model
over the last year while also implementing a digital platform in our Brokerage Segment, which we believe positions the Brokerage business for profitable growth. Looking ahead, we see a large, fragmented market where we believe we can take
meaningful share as we scale our digital platforms. In Variant, our goal is to transition our entire legacy OTR fleet to our digital fleet, over the medium term, which will drive improved profitability and revenue growth. In Brokerage, we
are targeting more than 20% annual revenue growth given the scale advantages that our digital platform provides. Taken together, we expect revenue growth to accelerate and profitability to improve in the years ahead.”
Conference Call
The Company will hold a conference call to discuss its fourth quarter and full year 2020 results at 5:00
p.m. (Eastern Time) on January 28, 2021. 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 and Full
Year 2020 Earnings Conference Call. A replay will be available starting at 8:00 p.m. (Eastern Time) on January 28, 2021, and can be accessed by dialing 1-844-512-2921 or, for international callers, 1-412-317-6671. The passcode for the replay
is 13714800. The replay will be available until 11:59 p.m. (Eastern Time) on February 4, 2021.
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by
logging onto the investor relations section of the Company’s website at investor.usxpress.com. The online replay will remain available for a limited time beginning immediately following the call. Supplementary information for the conference
call will also be available on this website.
(1) Non-GAAP Financial Measures
In addition to our net income
determined in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’), we evaluate operating performance using certain non-GAAP measures, including Adjusted Operating Ratio, Adjusted Operating Income, Adjusted Net Income
Attributable to Controlling Interest, and Adjusted EPS (on a consolidated and, as applicable, segment basis). Management believes the use of non-GAAP measures assists investors and securities analysts in understanding the ongoing operating
performance of our business by allowing more effective comparison between periods. Further, management uses non-GAAP Adjusted Operating Ratio, Adjusted Operating Income, Adjusted Net Income Attributable to Controlling Interest, and Adjusted
EPS measures on a supplemental basis to remove items that may not be an indicator of performance from period-to-period. The non-GAAP information provided is used by our management and may not be comparable to similar measures disclosed by
other companies. The non-GAAP measures used herein have limitations as analytical tools and should
not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. You should not consider the non-GAAP measures used herein in isolation or as substitutes for
analysis of our results as reported under GAAP. Management compensates for these limitations by relying primarily on GAAP results and using non-GAAP financial measures on a supplemental basis.
Pursuant to the requirements of Regulation G and Regulation S-K, we have provided reconciliations of Adjusted Operating Ratio, Adjusted Operating Income, Adjusted Net Income Attributable to Controlling Interest, and Adjusted EPS to the most comparable GAAP
financial measures at the end of this press release.
About U.S. Xpress Enterprises
Through its subsidiaries, U.S. Xpress Enterprises, Inc. (NYSE: USX) 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. For more, visit usxpress.com.
Forward-Looking Statements
This press release contains certain statements that may be considered forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by those sections and the Private Securities
Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases such as "expects," "estimates," "projects," "believes," "anticipates," "plans," "intends," “outlook,” “strategy,” “optimistic,”
“will,” “could,” “should,” “may,” “focus,” “seek,” “potential,” “continue,” “goal,” “target,” “objective,” derivations thereof, and similar terms and phrases. In this press release, such statements may include, but are not limited to,
statements in the "Outlook" section, statements regarding the freight environment, expected rates, expected margins, future growth of our digital fleet, digital brokerage, and Dedicated division, expected net capital expenditures, the
expected impact of our driver, digital fleet, and other initiatives, and any other statements concerning: any projections of earnings, revenues, cash flows, capital expenditures, compliance with financial covenants, or other financial items;
any statement of plans, strategies, or objectives for future operations; any statements regarding future economic or industry conditions or performance; any statements regarding our responses to COVID-19 and the associated economic
conditions; and any statements of belief and any statements of assumptions underlying any of the foregoing. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks
and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The following
factors, among others, could cause actual results to differ materially from those in the forward-looking statements: general economic conditions, including inflation and consumer spending; political conditions and regulations, including
future changes thereto; changes in tax laws or in their interpretations and changes in tax rates; future insurance and claims experience, including adverse changes in claims experience and loss development factors, or additional changes in
management's estimates of liability based upon such experience and development factors that cause our expectations of insurance and claims expense to be inaccurate or otherwise impacts our results; impact of pending or future legal
proceedings; future market for used revenue equipment and real estate; future revenue equipment prices; future capital expenditures, including equipment purchasing and leasing plans and equipment turnover (including expected trade-ins); fleet
age; future depreciation and amortization; changes in management’s estimates of the need for new tractors and trailers; future ability to generate sufficient cash from operations and obtain financing on favorable terms to meet our significant
ongoing capital requirements; our ability to maintain compliance with the provisions of our credit agreement; freight environment, including freight demand, rates, capacity, and volumes; future asset utilization; loss of one or more of our
major customers; our ability to renew dedicated service offering contracts on the terms and schedule we expect; surplus inventories, recessionary economic cycles, and downturns in customers' business cycles; strikes, work slowdowns, or work
stoppages at the Company, customers, ports, or other shipping related facilities; increases or rapid fluctuations in fuel prices, as well as fluctuations in surcharge collection, including, but not limited to, changes in customer fuel
surcharge policies and increases in fuel surcharge bases by customers; interest rates, fuel taxes, tolls, and license and registration fees; increases in compensation for and difficulty in attracting and retaining qualified professional
drivers and independent contractors; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, intermodal, and brokerage (including digital brokerage) competitors; regulatory
requirements that increase costs, decrease efficiency, or reduce the availability of drivers, including revised hours-of-service requirements for drivers and the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability
program that implemented new driver standards and modified the methodology for determining a carrier’s Department of Transportation safety rating; future safety performance; our ability to reduce, or control increases in, operating costs;
future third-party service provider relationships and availability; execution of the Company’s current business strategy or changes in the Company’s business strategy; the ability of the Company’s infrastructure to support future organic or
inorganic growth; our ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations; our ability to adapt to changing market conditions and technologies, including the future use of
autonomous tractors; disruptions to our information technology; the cost of and our ability to effectively and efficiently implement technology initiatives; costs, diversion of management’s attention, and potential payments made in connection
with the multiple class action lawsuits a stockholder derivative lawsuit arising out of our IPO; changes in methods of determining LIBOR or replacement of LIBOR; credit, reputational and relationship risks of certain of our current and
former equity investments; risks arising from our Mexican operations; our ability to maintain effective internal controls without material weaknesses, as well as remediate the existing material weakness; and the impact of the recent
coronavirus outbreak or other similar outbreaks. Readers should review and consider these factors along with the various disclosures by the Company in its press releases, stockholder reports, and filings with the Securities and Exchange
Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.
USX Financial
Contact:
U.S. Xpress Enterprises, Inc.
Brian Baubach
Sr. Vice President Corporate Finance
investors@usxpress.com
Source: U.S. Xpress Enterprises, Inc.
|
Condensed Consolidated Income Statements (unaudited)
|
| |
|
Quarter Ended December 31,
|
|
|
Year Ended December 31,
|
|
|
(in thousands, except per share data)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
Operating Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, excluding fuel surcharge
|
|
$
|
428,736
|
|
|
$
|
405,288
|
|
|
$
|
1,619,199
|
|
|
$
|
1,538,450
|
|
|
Fuel surcharge
|
|
|
26,851
|
|
|
|
44,345
|
|
|
|
122,902
|
|
|
|
168,911
|
|
|
Total operating revenue
|
|
|
455,587
|
|
|
|
449,633
|
|
|
|
1,742,101
|
|
|
|
1,707,361
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and benefits
|
|
|
143,618
|
|
|
|
140,894
|
|
|
|
556,507
|
|
|
|
530,801
|
|
|
Fuel and fuel taxes
|
|
|
33,412
|
|
|
|
47,922
|
|
|
|
136,677
|
|
|
|
189,174
|
|
|
Vehicle rents
|
|
|
22,516
|
|
|
|
23,039
|
|
|
|
86,684
|
|
|
|
80,064
|
|
|
Depreciation and amortization, net of (gain) loss
|
|
|
24,956
|
|
|
|
19,839
|
|
|
|
102,827
|
|
|
|
94,337
|
|
|
Purchased transportation
|
|
|
143,079
|
|
|
|
132,572
|
|
|
|
516,196
|
|
|
|
481,589
|
|
|
Operating expense and supplies
|
|
|
32,107
|
|
|
|
37,504
|
|
|
|
133,356
|
|
|
|
142,248
|
|
|
Insurance premiums and claims
|
|
|
21,912
|
|
|
|
25,770
|
|
|
|
87,053
|
|
|
|
88,959
|
|
|
Operating taxes and licenses
|
|
|
4,328
|
|
|
|
3,737
|
|
|
|
15,084
|
|
|
|
13,849
|
|
|
Communications and utilities
|
|
|
2,095
|
|
|
|
2,269
|
|
|
|
8,990
|
|
|
|
8,928
|
|
|
Gain on sale of subsidiary
|
|
|
-
|
|
|
|
(161
|
)
|
|
|
-
|
|
|
|
(831
|
)
|
|
General and other operating
|
|
|
12,513
|
|
|
|
14,885
|
|
|
|
55,176
|
|
|
|
52,173
|
|
|
Total operating expenses
|
|
|
440,536
|
|
|
|
448,270
|
|
|
|
1,698,550
|
|
|
|
1,681,291
|
|
|
Operating Income
|
|
|
15,051
|
|
|
|
1,363
|
|
|
|
43,551
|
|
|
|
26,070
|
|
|
Other Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense, net
|
|
|
4,183
|
|
|
|
5,269
|
|
|
|
18,847
|
|
|
|
21,635
|
|
|
Equity in loss of affiliated companies
|
|
|
-
|
|
|
|
6,793
|
|
|
|
-
|
|
|
|
7,063
|
|
|
Other, net
|
|
|
-
|
|
|
|
-
|
|
|
|
2,000
|
|
|
|
26
|
|
| |
|
|
4,183
|
|
|
|
12,062
|
|
|
|
20,847
|
|
|
|
28,724
|
|
|
Income (Loss) Before Income Taxes
|
|
|
10,868
|
|
|
|
(10,699
|
)
|
|
|
22,704
|
|
|
|
(2,654
|
)
|
|
Income Tax Provision (Benefit)
|
|
|
3,205
|
|
|
|
(1,114
|
)
|
|
|
5,072
|
|
|
|
389
|
|
|
Net Income (Loss)
|
|
|
7,663
|
|
|
|
(9,585
|
)
|
|
|
17,632
|
|
|
|
(3,043
|
)
|
|
Net Income (Loss) attributable to non-controlling interest
|
|
|
89
|
|
|
|
9
|
|
|
|
(920
|
)
|
|
|
604
|
|
|
Net Income (Loss) attributable to controlling interest
|
|
$
|
7,574
|
|
|
$
|
(9,594
|
)
|
|
$
|
18,552
|
|
|
$
|
(3,647
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (losses) per share
|
|
$
|
0.15
|
|
|
$
|
(0.20
|
)
|
|
$
|
0.37
|
|
|
$
|
(0.07
|
)
|
|
Basic weighted average shares outstanding
|
|
|
49,724
|
|
|
|
49,022
|
|
|
|
49,528
|
|
|
|
48,788
|
|
|
Diluted earnings (losses) per share
|
|
$
|
0.15
|
|
|
$
|
(0.20
|
)
|
|
$
|
0.35
|
|
|
$
|
(0.07
|
)
|
|
Diluted weighted average shares outstanding
|
|
|
51,186
|
|
|
|
49,022
|
|
|
|
50,674
|
|
|
|
48,788
|
|
