| Contact: | Ray Harlin |
| Chief Financial Officer | |
| (423) 510-3323 | |
U.S. XPRESS ENTERPRISES, INC. REPORTS
RECORD FOURTH QUARTER RESULTS
Posts 12th Consecutive Quarter of Year-Over-Year Earnings Improvement
with 125% Increase in Fourth Quarter Net Income
CHATTANOOGA, Tenn. (February 3, 2005) - U.S. Xpress Enterprises, Inc. (NASDAQ/NM: XPRSA) reported its results for the three months and year ended December 31, 2004.
Revenue for the fourth quarter of 2004 increased 30.4% to $312.3 million compared with $239.6 million for the corresponding quarter in 2003. Revenue, excluding the impact of fuel surcharges, increased 24.6% to $288.9 million, versus $231.7 million in the fourth quarter of 2003. Excluding a $454,300 pre-tax charge for the early extinguishment of debt in the fourth quarter of 2004, net income increased 134% to $6.2 million, or $0.42 per diluted share, versus $2.7 million, or $0.19 per diluted share for the comparable 2003 quarter. Net income for the fourth quarter of 2004, including the charge for early extinguishment of debt, was $5.9 million, or $0.40 per diluted share.
For the year ending December 31, 2004, revenue increased 18.8% to $1.1 billion, compared to $930.5 million for the same period in 2003. Revenue, excluding the impact of fuel surcharges, increased 16.5% to $1.0 billion for 2004 versus $896.5 million in 2003. Net income for the year ended December 31, 2004 increased 115% to $16.4 million, or $1.14 per diluted share, compared to $7.6 million, or $0.54 per diluted share in 2003. Excluding the effect of the previously discussed charge for the early extinguishment of debt, net income for 2004 is $16.6 million, or $1.16 per diluted share.
Truckload revenue for the fourth quarter of 2004, excluding the effect of fuel surcharges, increased 21.6% to $248.8 million. Truckload operating income for the quarter increased 189% to $18.1 million, compared to $6.2 million in the comparable prior year quarter. These results were driven by a strong freight environment, a 22% increase in the Company’s revenue per loaded mile, excluding fuel surcharges, and a 440 basis point improvement in the truckload operating ratio to 92.7% versus 97.1% in the fourth quarter of 2003. The Company experienced significant revenue growth in its dedicated contract and expedited rail operations during the quarter which contributed significantly to improved operating results. Dedicated contract revenues increased 92% to $45.6 million and expedited rail revenues grew by 134% to $33.2 million in the fourth quarter of 2004.
Co-Chairman, Patrick Quinn, stated, “Our truckload operating results reflect the success of our strategy within our truckload segment of shifting assets to dedicated, regional, and expedited rail services that we believe offer the opportunity for higher and more consistent returns. The significant increase in our revenue per loaded mile was driven by negotiated customer rate increases, improved recovery of detention charges, improved freight selection and the impact of increasing revenues from our dedicated and on-demand expedited operations, which generally provide for higher rates relative to our over-the-road solo and team truckload operations.
“The strong consolidated earnings growth we experienced in the fourth quarter was achieved in the face of higher fuel prices, an increase in driver pay implemented in the fourth quarter, increased insurance and claims cost, and disappointing results in our Xpress Global operations. Our average diesel fuel prices, including
-more-
4080 Jenkins Road, Chattanooga, TN 37421
423-510-3000
XPRSA Reports Fourth Quarter and Year End Results
Page 2
February 3, 2005
taxes, were approximately 41% higher than the comparable 2003 quarter. These higher fuel costs, net of the impact of fuel surcharges, and lower fuel efficiencies from the new EGR engines negatively impacted fourth quarter earnings per share by approximately $0.07 per diluted share, compared to the fourth quarter of 2003.
“Our Xpress Global business segment, which accounts for approximately 14% of our consolidated revenues, generated a 17.9% increase in revenues for the quarter to $42.6 million. Xpress Global incurred an operating loss in the quarter of $4.5 million, compared with operating income of $492,000 in the fourth quarter of 2003. Despite higher revenues, Xpress Global operating margins were negatively impacted by rapidly escalating purchased transportation costs as third party carriers significantly increased rates throughout the quarter. Additionally, during the quarter Xpress Global’s overhead costs increased at a rate higher than the corresponding revenue growth. In the face of these disappointing results, we have made various management changes and have taken a number of actions in early January to substantially reduce fixed overhead and purchased transportation costs. These initiatives to improve margins are ongoing, and we expect to return this business to profitability during 2005.
“During the fourth quarter, we completed a number of significant transactions which we believe enhance our overall financial strength and provide a foundation for future growth. In October, we completed $200 million in new financing consisting of a $100 million five-year secured revolving credit facility and a $100 million accounts receivable securitization facility. In December, we completed a public offering of two million shares of common stock, which generated net proceeds to the Company of approximately $47.7 million. Finally, in December, we completed the acquisition of a 49% equity interest in Arnold Transportation Services, Inc., a truckload carrier providing dedicated and regional truckload services with a fleet of approximately 1,500 trucks and annual revenues of approximately $200 million.”
Max Fuller, Co-Chairman, stated, “The significant improvement of our U.S. Xpress truckload business enabled us to achieve our highest-ever quarterly earnings per share despite the poor performance of Xpress Global. Looking forward, we will continue to focus on improving our return on investment in each of our business segments and moderately grow truck capacity. Within our truckload segment, we believe there continues to exist a significant opportunity to achieve substantial growth at desirable margins in our dedicated contract and expedited rail operations. With twelve consecutive quarters of year-over-year earnings improvement and an enhanced capital structure, we believe we are well-positioned to achieve continued revenue and profitability growth in 2005.”
Investor Conference Call and Simulcast
U.S. Xpress Enterprises, Inc. will conduct a conference call, at 2:00 p.m. EST on February 3, 2005, to discuss the fourth quarter and year end results. The number to call for this interactive teleconference is (719) 457-2625. A replay of the conference call will be available through February 10, 2005, by dialing (719) 457-0820 and entering the passcode 2317264.
The Company will also provide a live broadcast the conference call available online at the Company’s website,www.usxpress.com, as well ashttp://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=80059&eventID=997111 on February 3, 2005, beginning at 2:00 p.m. EST. The online replay will follow shortly after the call and continue through February 17, 2005.
U.S. Xpress Enterprises, Inc. is the fifth largest publicly owned truckload carrier in the United States, measured by revenue. The Company provides dedicated, regional, and expedited team truckload services throughout North America, with regional capabilities in the West, Midwest, and Southeastern United States. The Company is one of the largest providers of expedited and time-definite services in the truckload industry and is a leader in providing expedited intermodal rail services. Xpress Global Systems, Inc., a wholly owned subsidiary, is a provider of transportation, warehousing, and distribution services to the floorcovering industry and provides airport-to-airport transportation services to the airfreight and airfreight forwarding industries through a network of 81 locations in North America. The Company also participates in logistics services through its joint ownership of Transplace, an Internet-based global transportation logistics company.
-more-
XPRSA Reports Fourth Quarter and Year End Results
Page 3
February 3, 2005
Additionally, U.S. Xpress has a 49% equity ownership interest in Arnold Transportation Services, Inc., which provides regional, dedicated, and medium length of haul services with a fleet of approximately 1,500 trucks. Please visit the Company’s website at www.usxpress.com
This press release 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 recession or downturns in customers’ business cycles, rapid fluctuations in fuel pricing or availability, increases in interest rates, the availability of adequate sources of financing and the availability of qualified drivers. Readers are urged to carefully review and consider the various disclosures made by the Company in this press release and in the Company’s periodic reports on forms 10-K and 10-Q.
-more-
XPRSA Reports Fourth Quarter and Year End Results
Page 4
February 3, 2005
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------------------- ---------------------------------------
2004 2003 2004 2003
---------------- -------------- ------------------- ---------------
Operating Revenue
Revenue, before fuel surcharge $ 288,880 $ 231,772 $ 1,044,699 $ 896,533
Fuel Surcharge Revenue 23,436 7,814 60,957 33,976
---------------- -------------- ------------------- ---------------
Total operating revenue 312,316 239,586 1,105,656 930,509
---------------- -------------- ------------------- ---------------
Operating Expenses:
Salaries, wages and benefits 97,911 85,765 367,317 325,767
Fuel and fuel taxes 47,767 33,553 168,570 135,895
Vehicle rents 18,037 18,922 71,068 75,490
Depreciation and amortization 10,829 9,779 45,097 37,273
Purchased transportation 65,011 41,975 212,153 157,212
Operating expense and supplies 19,570 14,592 72,689 63,978
Insurance premiums and claims 20,221 13,190 59,651 48,614
Operating taxes and licenses 3,469 3,716 13,924 14,160
Communications and utilities 2,744 2,356 11,435 11,210
General and other operating 13,163 8,999 43,744 36,494
Early extinguishment of debt 454 - 454 -
---------------- -------------- ------------------- ---------------
Total operating expenses 299,176 232,847 1,066,102 906,093
---------------- -------------- ------------------- ---------------
Income from Operations 13,140 6,739 39,554 24,416
Interest Expense, net 2,201 2,188 9,223 9,873
---------------- -------------- ------------------- ---------------
Income Before Income Taxes 10,939 4,551 30,331 14,543
Income Tax Provision 4,988 1,904 13,905 6,900
---------------- -------------- ------------------- ---------------
Net Income $ 5,951 $ 2,647 $ 16,426 $ 7,643
================ ============== =================== ===============
Earnings Per Share - basic $ 0.41 $ 0.19 $ 1.16 $ 0.55
================ ============== =================== ===============
Weighted average shares - basic 14,449 14,017 14,159 13,966
================ ============== =================== ===============
Earnings Per Share - diluted $ 0.40 $ 0.19 $ 1.14 $ 0.54
================ ============== =================== ===============
Weighted average shares - diluted 14,823 14,165 14,399 14,067
================ ============== =================== ===============
-more-
XPRSA Reports Fourth Quarter and Year End Results
Page 5
February 3, 2005
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------------- ---------------------------
2004 2003 2004 2003
---------- ----------- ----------- ----------
Operating Revenue 100.0% 100.0% 100.0% 100.0%
---------- ----------- ----------- ----------
Operating Expenses:
Salaries, wages and benefits 33.9 37.0 35.2 36.3
Fuel and fuel taxes 8.4 11.1 10.3 11.4
Vehicle rents 6.2 8.2 6.8 8.4
Depreciation and amortization 3.7 4.2 4.3 4.2
Purchased transportation 22.5 18.1 20.3 17.5
Operating expense and supplies 6.8 6.3 7.0 7.1
Insurance premiums and claims 7.0 5.7 5.7 5.4
Operating taxes and licenses 1.2 1.6 1.3 1.6
Communications and utilities 0.9 1.0 1.1 1.3
General and other operating 4.7 3.9 4.2 4.1
Early extinguishment of debt 0.2 0.0 0.0 0.0
---------- ----------- ----------- ----------
Total operating expenses 95.5 97.1 96.2 97.3
---------- ----------- ----------- ----------
Income from Operations 4.5 2.9 3.8 2.7
Interest Expense, net 0.8 0.9 0.9 1.1
---------- ----------- ----------- ----------
Income Before Income Taxes 3.7 2.0 2.9 1.6
Income Tax Provision 1.7 0.8 1.3 0.8
---------- ----------- ----------- ----------
Net Income 2.0% 1.2% 1.6% 0.8%
========== =========== =========== ==========
-more-
XPRSA Reports Fourth Quarter and Year End Results
Page 6
February 3, 2005
U.S. XPRESS ENTERPRISES, INC.
KEY OPERATING FACTORS
Three Months Ended Twelve Months Ended
December 31, 2004 December 31, 2004
% %
2004 2003 Change 2004 2003 Change
------------- -------------- ------------ -------------- -------------- ----------
OPERATING RATIO (1) 95.5% 97.1% -1.6% 96.2% 97.3% -1.1%
OPERATING REVENUE:
US Xpress, net of fuel surcharge $ 248,814 $ 204,576 21.6% $ 905,485 $ 793,884 14.1%
Fuel Surcharge 23,436 7,814 199.9% 60,957 33,976 79.4%
Xpress Global Systems 42,604 36,142 17.9% 158,566 137,842 15.0%
Inter-company (2,538) (8,946) -71.6% (19,352) (35,193) -45.0%
-------------- -------------- ------------ --------------- -------------- ----------
Total Operating Revenue $ 312,316 $ 239,586 30.4% $1,105,656 $ 930,509 18.8%
OPERATING INCOME:
US Xpress $ 18,709 $ 6,247 189.4% $ 45,066 $ 21,915 105.6%
Xpress Global Systems (4,485) 492 n/a (5,048) 2,501 n/a
Early extinguishment of debt (454) - - (454) - -
-------------- -------------- ------------ --------------- -------------- ----------
Total Operating Income $ 13,140 $ 6,739 95.0% $ 39,554 $ 24,416 62.0%
TRUCKLOAD STATISTICS:
Revenue Per Mile (2)(3) $ 1.627 $ 1.329 22.4% $ 1.483 $ 1.298 14.3%
Revenue Per Total Mile (2)(3) $ 1.441 $ 1.195 20.5% $ 1.320 $ 1.166 13.2%
Tractors (at end of period)-
Company Owned 4,460 4,469 0.0% 4,460 4,469 0.0%
Owner Operators 574 869 -33.9% 574 869 -33.9%
-------------- -------------- ------------ --------------- -------------- ----------
Total Tractors (at end of period) 5,034 5,338 -5.7% 5,034 5,338 -5.7%
Average Number of Tractors
in Fleet During Period 5,179 5,342 -3.1% 5,369 5,433 -1.2%
Average Revenue Miles Per
Tractor Per Period 29,000 28,553 1.6% 112,355 111,564 0.7%
Average Revenue Per Tractor
Per Period (2)(3) $ 47,173 $ 37,953 24.3% $ 166,728 $ 144,857 15.1%
Average Length of Haul 709 774 -8.4% 721 783 -7.9%
Empty Mile Percentage 11.39% 10.12% 12.5% 11.02% 10.18% 8.3%
December 31, 2004 December 31, 2003
------------------------------- --------------------------------
BALANCE SHEET DATA:
Total Assets $ 556,989 $ 441,794
Total Equity 232,562 167,239
Long-term Debt, including Current
Maturities and Securitization 149,566 146,579
-end-
