Comparison of the Six Months Ended June 30, 2005 to the Six Months Ended June 30, 2004
Total operating revenue increased 8.7%, to $549.0 million during the six months ended June 30, 2005 compared to $505.0 million during the same period in 2004. The increase resulted primarily from higher rates and fuel surcharges.
Revenue, before fuel surcharge,increased 3.8%, to $501.0 million during the six months ended June 30, 2005 compared to $482.8 million during the same period in 2004. U.S. Xpress revenue, before fuel surcharge, increased 3.7%, to $437.5 million during the six months ended June 30, 2005 compared to $421.7 million during the same period in 2004, due primarily to an increase of 7.9% in average revenue per loaded mile to $1.50 from $1.39. The increase in average revenue per loaded mile was primarily due to increased pricing to customers, combined with a shorter length of haul which generally provides a higher rate per mile. Xpress Global Systems’ revenue increased 5.9%, to $78.9 million during the six months ended June 30, 2005 compared to $74.5 million during the same period in 2004. Within Xpress Global Systems, floorcovering revenue increased 7.2%, to $52.2 million, and airport-to-airport revenue increased 3.5%, to $26.7 million, due primarily to an increase in volume resulting in part from the acquisition of a less-than-truckload airport-to-airport carrier in July 2004, offset by the sale and exit of the airport-to-airport business during the second quarter of 2005. Intersegment revenue increased to $15.4 million during the six months ended June 30, 2005 compared to $13.4 million during the same period in 2004.
Salaries, wages and benefitsincreased 13.3%, to $195.2 million during the six months ended June 30, 2005 compared to $172.3 million during the same period in 2004. As a percentage of revenue, before fuel surcharge, salaries, wages and benefits increased to 39.0% during the six months ended June 30, 2005 compared to 35.8% during the same period in 2004. The increases were primarily due to driver pay increases in 2004, an increase in the number of local drivers necessary to support our expedited intermodal rail program, growth in non-driver personnel and an increase in health insurance costs.
Fuel and fuel taxes,net of fuel surcharge, remained essentially constant at $53.1 million during the six months ended June 30, 2005 compared to $54.9 million during the same period in 2004. The increase in the average fuel price per gallon of approximately 33%, combined with the lower fuel efficiency of the new EPA-compliant engines was offset by an increase in customer fuel surcharges, increased use of expedited intermodal rail for certain medium-to-long haul truckload freight and a slight decline in company miles. Our exposure to increases in fuel prices in our truckload operations is mitigated to an extent by fuel surcharges to customers, which amounted to $48.0 million and $22.2 million for the six months ended June 30, 2005 and 2004, respectively. As a percentage of revenue, before fuel surcharge, fuel and fuel taxes,net of fuel surcharge declined to 10.6% during the six months ended June 30, 2005 compared to 11.4% during the same period in 2004.
Vehicle rentsdecreased 4.2%, to $34.5 million during the six months ended June 30, 2005 compared to $36.0 million during the same period in 2004. As a percentage of revenue, before fuel surcharge, vehicle rents were 6.9% during the six months ended June 30, 2005 compared to 7.4% during the same period in 2004. The decrease was primarily due to a decrease in the average number of tractors financed under operating leases to 3,403 compared to 3,505 during the six months ended June 30, 2005 and 2004, respectively, in addition to a lower effective interest rate. The decrease was partially offset by an increase in the average number of trailers financed under operating leases to 8,504 compared to 8,099 during the six months ended June 30, 2005 and 2004, respectively, due to the expansion of our trailer fleet necessary to support the expedited intermodal rail program.
Depreciation and amortizationincreased 3.2%, to $22.9 million during the six months ended June 30, 2005 compared to $22.2 million during the same period in 2004. The increase was primarily due to an increase in the average number of owned tractors and trailers to 1,990 and 8,296, respectively, during the six months ended June 30, 2005 compared to 1,802 and 8,004, respectively, during the same period in 2004, as well as increased costs of the new EPA-compliant engines and lower residual values. This increase was offset by net gains on the disposal of owned units for the quarter of $1.6 million compared to $105 for the prior year comparable period. As a percentage of revenue, before fuel surcharge, depreciation and amortization remained constant at 4.6% during the six months ended June 30, 2005 and 2004.
Purchased transportationincreased 7.4%, to $98.1 million during the six months ended June 30, 2005 compared to $91.3 million during the same period in 2004 primarily due to the increased use of expedited intermodal rail in the truckload segment for certain medium-to-long haul truckload freight and an owner-operator pay increase of approximately 4.0% initiated in February 2004. This increase was partially offset by a decrease in the average
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number of owner-operators in the truckload segment during the six months ended June 30, 2005 to 542, or 10.9% of the total fleet, compared to 842, or 15.4% of the total fleet, for the same period in 2004.
Operating expenses and suppliesincreased 13.2%, to $38.5 million during the six months ended June 30, 2005 compared to $34.0 million during the same period in 2004, primarily due to an increase in tractor and trailer maintenance expense. The increases in maintenance cost was related to the average age of our company tractor and trailer fleets increasing to 28 and 58 months, respectively, during the six months ended June 30, 2005 compared to 25 and 49 months, respectively, during the same period in 2004. As a percentage of revenue, before fuel surcharges, operating expenses and supplies were 7.7% during the six months ended June 30, 2005 compared to 7.0% during the same period in 2004
Insurance premiums and claims, consisting primarily of premiums and deductible amounts for liability (personal injury and property damage), physical damage and cargo damage insurance and claims, decreased 14.6%, to $21.6 million during the six months ended June 30, 2005 compared to $25.3 million during the same period in 2004. The decrease was primarily due to a decrease in liability claims expense offset to an extent by an increase in cargo claims expense. As a percentage of revenue, before fuel surcharge, insurance and claims decreased to 4.3% during the six months ended June 30, 2005 compared to 5.2% during the same period in 2004, primarily due to these factors and the increase in average revenue per tractor per week. We are self-insured up to certain limits for cargo loss, physical damage and liability. We have adopted an insurance program with higher deductible exposure to offset the industry-wide increase in insurance premium rates. As of June 30, 2005 the retention level for cargo loss was $250,000 and the retention level for liability was $2.0 million per occurrence. We maintain insurance with licensed insurance companies above amounts for which we are self-insured for cargo and liability. We accrue for the uninsured portion of pending claims, plus any incurred but not reported claims. The accruals are estimated based on our evaluation of the type and severity of individual claims and future development based on historical trends. Insurance premiums and claims expense will fluctuate based on claims experience, premium rates and self-insurance retention levels.
Equity in income of affiliated companiesincreased to $1,251 for the six months ended June 30, 2005 compared to $125 for the same period in 2004. The increase is the result of equity investments in Arnold Transportation Services, Inc. in December 2004 and Total Transportation of Mississippi and affiliated companies in April 2005.
Loss on sale and exit of businessof $2,787 for the six months ended June 30, 2005 related to the exit of the airport-to-airport business by Xpress Global Systems. Xpress Global Systems provided $15,537 for costs related to the shutdown and received $12,750 in cash. See Footnote 11, “Loss on Sale and Exit of Business”.
Interest expense,decreased $1.0 million, or 21.7%, to $3.6 million during the six months ended June 30, 2005 compared to $4.6 million during the same period in 2004. The decrease was due to decreased borrowings of 36.7%, or $71.1 million, from $193.7 million as of June 30, 2004.
The effective tax rate was 48% for the six months ended June 30, 2005. The rate was higher than the federal statutory rate of 35%, primarily as a result of per diems paid to drivers which were not fully deductible for federal income tax purposes.
Liquidity and Capital Resources
Our business requires significant capital investments. Our primary sources of liquidity at June 30, 2005 were funds provided by operations, borrowing under our revolving credit facility, proceeds of our accounts receivable securitization facility, and long-term equipment debt and operating leases of revenue equipment. Each of our revolving credit facility and our accounts receivable securitization facility has maximum available borrowings of $100.0 million. We believe that funds provided by operations, borrowings under our revolving credit facility and securitization facility, equipment installment loans and long-term equipment debt and operating lease financing will be sufficient to fund our cash needs and anticipated capital expenditures for the next twelve months.
Cash Flows
Cash provided by operations was $47.1 million and $12.3 million during the six months ended June 30, 2005 and 2004 respectively. The change can be attributed to improved collection of accounts receivable, an increase in depreciation resulting from a higher percentage of equipment owned instead of held under operating leases, and an increase in accounts payable and accrued wages. This increase is partially offset by an increase in other assets.
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Cash used in investing activities was $13.8 million during the six months ended June 30, 2005 compared to $43.5 million during the same period in 2004. The cash used during the 2005 period related to the financing of tractors and trailers through long-term debt and investments in an affiliated company, offset by proceeds from the sale of the airport-to-airport operations. The cash used during the six months ended June 30, 2004 related to the financing of tractors through long-term debt versus operating leases, combined with the purchase of trailers to support the expansion of the Company’s regional truckload business and the expedited rail program.
Cash used in financing activities was $33.3 million during the six months ended June 30, 2005, compared to cash provided by financing activities of $31.5 million during the six months ended June 30, 2004. During the six months ended June 30, 2005 we made net repayments on outstanding debt of $27.0 million compared to net borrowings of debt of $31.8 million for the same period in 2004. During the six months ended June 30, 2005, the early repayment of outstanding debt under various note agreements resulted in an early extinguishment loss of $201.
Debt
Effective October 14, 2004, we entered into a $100.0 million senior secured revolving credit facility and letter of credit sub-facility with a group of banks, which replaced the existing $100.0 million credit facility that was set to mature in March 2007. The new facility is secured by revenue equipment and certain other assets and bears interest at the base rate, as defined, plus an applicable margin of 0.00% to 0.25% or LIBOR plus an applicable margin of 0.88% to 2.00% based on our lease adjusted leverage ratio. At June 30, 2005, the applicable margin was 0.00% for base rate loans and 1.00% for LIBOR loans. The credit facility also prescribes additional fees for letter of credit transactions and a quarterly commitment fee on the unused portion of the loan commitment (1.00% and 0.20%, respectively, at June 30, 2005). The facility matures in October 2009.
The credit facility requires, among other things, maintenance by us of prescribed minimum amounts of consolidated tangible net worth, fixed charge and asset coverage ratios and a leverage ratio. It also restricts our ability to engage in certain sale-leaseback transactions, transactions with affiliates, investment transactions, acquisitions of our own capital stock, the payment of dividends, future asset dispositions (except in the ordinary course of business) or other business combination transactions and to incur liens and future indebtedness. As of June 30, 2005, we were in compliance with the revolving credit facility covenants.
Effective October 14, 2004, we also entered into an accounts receivable securitization. Under the securitization, we sell accounts receivable as part of a two-step process that provides funding similar to a revolving credit facility. To facilitate this transaction, Xpress Receivables, LLC (“Xpress Receivables”) was formed as a wholly-owned subsidiary. Xpress Receivables is a bankruptcy remote, special purpose entity, which purchases accounts receivable from U.S. Xpress, Inc. and Xpress Global Systems, Inc. Xpress Receivables funds these purchases with money borrowed under a new credit facility with Three Pillars Funding, LLC. The borrowings are secured by the accounts receivable and paid down through collections on the accounts receivable. We can borrow up to $100.0 million under the securitization facility, subject to eligible receivables, and pay interest on borrowings based on commercial paper interest rates, plus an applicable margin, and a commitment fee on the daily, unused portion of the facility. The securitization facility is reflected as a current liability because the term, subject to annual renewals, is 364 days.
The securitization facility requires that certain performance ratios be maintained with respect to accounts receivable and that Xpress Receivables preserve its bankruptcy remote nature.
At June 30, 2005 we had $122.6 million of borrowings, of which $64.5 million was long-term, $10.0 million was current maturities and $48.0 million was the securitization facility. We also had approximately $42.2 million in unused letters of credit. At June 30, 2005 we had an aggregate of approximately $94.0 million of available borrowing remaining under our revolving credit facility and securitization. Current maturities include $372 in balloon payments related to maturing revenue equipment installment notes. The balloon payments are generally expected to be funded with proceeds from the sale of the related revenue equipment, which is generally covered by repurchase and/or trade agreements in principle between the equipment manufacturer and us.
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Equity
At June 30, 2005 we had stockholders’ equity of $231.7 million, long-term debt, net of current maturities, of $64.5 million and total debt of $122.6 million, resulting in a debt to total capitalization ratio of 34.7% compared to 53.0% at June 30, 2004.
In July 2005, the Board of Directors authorized us to repurchase up to $15 million of our Class A common stock. The stock may be repurchased on the open market or in privately negotiated transactions at any time until July 31, 2006, at which time, or prior thereto, the Board may elect to extend the repurchase program. We are currently permitted to repurchase approximately $4.3 million of our Class A common stock under our revolving credit facility, and we are seeking approval from the lending group on the facility of the remaining amount authorized by the Board of Directors. The repurchased shares may be used for issuances under our incentive stock plan or for other general corporate purposes, as the Board may determine. During the second quarter of 2005, we repurchased 145,000 shares for approximately $1.7 million.
In June 2005, the Company issued 10,000 shares of restricted stock to certain employees. The market value of these shares on the date of issuance was $11.15. This amount is being amortized using the straight-line method over the five-year vesting period from the date of issuance as additional compensation expense. The unamortized value of $113 is included as a component of stockholders’ equity.
Equity Investment
In December 2004, we acquired a 49.0% interest in Arnold Transportation Services, Inc. (“Arnold”) and its affiliated companies for $6.2 million in cash. Arnold is a truckload carrier that provides primarily short-haul regional and dedicated dry van service in the Southwest, Southeast and Northeast. Certain members of Arnold’s current management team control the remaining 51% interest and a majority of the board of directors. We have not guaranteed any of Arnold’s debt and have no obligation to provide funding, services or assets. Under the agreement with Arnold’s management, we have a three-year option to acquire 100% of Arnold by purchasing management’s interest at a specified price plus an agreed upon annual return. During the quarter ended June 30, 2005, we issued a loan to TTMS in the amount of $2.0 million that was subsequently repaid in the same period.
During the second quarter of 2005, we completed the acquisition of a 49.0% interest in Total Transportation of Mississippi and affiliated companies (“TTMS”). Certain members of the TTMS management team control the remaining 51% interest and a majority of the board of directors. We have not guaranteed any of TTMS’ debt and have no obligation to provide funding, services or assets. Under the agreement with the TTMS management team, we have a three-year option to acquire 100% of TTMS by purchasing management’s interest at a specified price plus an agreed upon annual return. We have accounted for TTMS’ operating results using the equity method of accounting. During the quarter ended June 30, 2005, we issued a loan to TTMS in the amount of $2.2 million that was subsequently repaid in the same period.
Off Balance Sheet Arrangements
We use non-cancelable operating leases as a source of financing for revenue and service equipment, office and terminal facilities, automobiles and airplanes. In making the decision to finance through long-term debt or by entering into non-cancelable lease agreements, we consider interest rates, capital requirements and the tax advantages of leasing versus owning. At June 30, 2005 a substantial portion of our off-balance sheet arrangements related to non-cancelable leases for revenue equipment and office and terminal facilities with termination dates ranging from April 2005 to January 2012. Lease payments on office and terminal facilities, automobiles and airplanes are included in general and other operating expenses, lease payments on service equipment are included in operating expense and supplies, and lease payments on revenue equipment are included in vehicle rents in the consolidated statements of operations, respectively. Rental expense related to our off-balance sheet arrangements was $19.9 million for the three months ended June 30, 2005. The remaining lease obligation as of June 30, 2005 was $178.5 million, with $72.0 million due in the next twelve months.
Certain equipment leases provide for guarantees by us of a portion of the residual amount under certain circumstances at the end of the lease term. The maximum potential amount of future payments (undiscounted) under these guarantees is approximately $46.6 million at June 30, 2005. The residual value of a substantial portion of the leased revenue equipment is covered by repurchase or trade agreements in principle between the equipment
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manufacturer and us. Management estimates the fair value of the guaranteed residual values for leased revenue equipment to be immaterial. Accordingly, we have no guaranteed liabilities accrued in the accompanying consolidated balance sheets.
Cash Requirements
The following table presents our outstanding contractual obligations at June 30, 2005 excluding letters of credit of $42.2 million. The letters of credit are maintained primarily to support our insurance program and are renewed on an annual basis.
| | Payments Due By Period
(Dollars in Thousands) | | |
Contractual Obligations | | | | Total | | | | | | Less than
1 year | | | | | | 1-3 years | | | | | | 4-5 years | | | | | | After 5 years | | |
Securitization Facility(1) | | | $ | | 48,000 | | | | | $ | | 48,000 | | | | | $ | | — | | | | | $ | | — | | | | | $ | | — | | |
Long-Term Debt, Including Interest(1) | | | | | 86,827 | | | | | | | 12,330 | | | | | | | 21,830 | | | | | | | 26,280 | | | | | | | 26,387 | | |
Capital Leases, Including Interest(1) | | | | | 3,502 | | | | | | | 1,831 | | | | | | | 1,671 | | | | | | | — | | | | | | | — | | |
Operating Leases - Revenue Equipment(2) | | | | | 154,698 | | | | | | | 61,817 | | | | | | | 70,395 | | | | | | | 18,919 | | | | | | | 3,567 | | |
Operating Leases - Other(3) | | | | | 23,826 | | | | | | | 10,216 | | | | | | | 10,823 | | | | | | | 2,733 | | | | | | | 54 | | |
Purchase Obligations(4) | | | | | 395,612 | | | | | | | 150,646 | | | | | | | 244,966 | | | | | | | — | | | | | | | — | | |
Total Contractual Cash Obligations | | | $ | | 712,465 | | | | | $ | | 284,840 | | | | | $ | | 349,685 | | | | | $ | | 47,932 | | | | | $ | | 30,008 | | |
(1) Represents principal and interest payments owed on revenue equipment installment notes, mortgage notes payable and capital lease obligations at June 30, 2005. The credit facility does not require scheduled principal payments. Approximately 40.3% of our debt is financed with variable interest rates. In determining future contractual interest obligations for variable rate debt, the interest rate in place at June 30, 2005 was utilized. The table assumes long-term debt is held to maturity. Refer to footnote 8, “Long-Term Debt” and footnote 9, “Accounts Receivable Securitization”, in the accompanying consolidated financial statements for further information. |
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(2) Represents future obligations under operating leases for over-the-road tractors, day-cabs and trailers. The amounts included are consistent with disclosures required under SFAS No. 13, “Accounting for Leases”. Substantially all lease agreements for revenue equipment have fixed payment terms based on the passage of time. The tractor lease agreements generally stipulate maximum miles and provide for mileage penalties for excess miles. Lease terms for tractors and trailers range from 36 to 54 months and 60 to 84 months, respectively. Refer to Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Off-Balance Sheet Arrangements” andfootnote 10, "Leases" in the accompanying consolidated financial statements for further information. |
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(3) Represents future obligations under operating leases for buildings, forklifts, automobiles, computer equipment and airplanes. The amounts included are consistent with disclosures required under SFAS No. 13. Substantially all lease agreements, with the exception of building leases, have fixed payment terms based on the passage of time. Lease terms range from 1 to 13 years. |
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(4) Represents purchase obligations for revenue equipment (tractors and trailers), development and improvement of facilities. The revenue equipment purchase obligations are cancelable, subject to certain adjustments in the underlying obligations and benefits. The purchase obligations with respect to improvement of facilities and computer software are non-cancelable. Refer to footnote 5, “Commitments and Contingencies”, in the accompanying consolidated financial statements for disclosure of our purchase commitments. |
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Critical Accounting Policies and Estimates
In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial position in the preparation of our financial statements in conformity with generally accepted accounting principles. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Recognition of Revenue
We generally recognize revenue and direct costs when shipments are completed. Certain revenue of Xpress Global Systems, representing approximately 9% of consolidated revenues for the six months ended June 30, 2005 is recognized upon manifest, that is, the time when the trailer of the independent carrier is loaded, sealed and ready to leave the dock. Estimated expenses are recorded simultaneous with the recognition of revenue. Had revenue been recognized using another method, such as completed shipment, the impact would have been insignificant to our consolidated financial statements.
Income Taxes
Significant management judgment is required in determining our provision for income taxes and in determining whether deferred tax assets will be realized in full or in part. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in years in which the temporary differences are expected to be reversed. When it is more likely than not that all or some portion of specific deferred tax assets, such as state tax credit carry-forwards or state net operating loss carry-forwards will not be realized, a valuation allowance must be established for the amount of the deferred tax assets that are determined to be not realizable. A valuation allowance for deferred tax assets has not been deemed necessary due to our profitable operations on both a consolidated and separate legal entity basis. However, if the facts or financial results were to change, thereby impacting the likelihood of the realization of the deferred tax assets, we would use our judgment to determine the amount of the valuation allowance required at that time for that period.
The determination of the combined tax rate used to calculate our provision for income taxes for both current and deferred income taxes also requires significant judgment by management. Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes,”requires that the net deferred tax asset or liability be valued using enacted tax rates that we believe will be in effect when these temporary differences reverse. We use the combined tax rates in effect at the time the financial statements are prepared since no better information is available. If changes in the federal statutory rate or significant changes in the statutory state and local tax rates occur prior to or during the reversal of these items or if our filing obligations were to change materially, this could change the combined rate and, by extension, our provision for income taxes.
Depreciation
Property and equipment are carried at cost. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the related assets (net of estimated salvage value or trade-in value). We generally use estimated useful lives of 4-5 years and 7-10 years for tractors and trailers, respectively, with estimated salvage values ranging from 25% - 50% of the capitalized cost. The depreciable lives of our revenue equipment represent the estimated usage period of the equipment, which is generally substantially less than the economic lives. The residual value of a substantial portion our equipment is covered by re-purchase or trade agreements between us and the equipment manufacturer.
Periodically, we evaluate the useful lives and salvage values of our revenue equipment and other long-lived assets based upon, but not limited to, its experience with similar assets including gains or losses upon dispositions of such assets, conditions in the used equipment market and prevailing industry practices. Changes in useful lives or salvage value estimates, or fluctuations in market values that are not reflected in our estimates, could have a material impact on financial results. Further, if our equipment manufacturer does not perform under the terms of the agreements for guaranteed trade-in values, such non-performance could have a materially negative impact on financial results.
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Goodwill
The excess of the consideration paid us over the estimated fair value of identifiable net assets acquired has been recorded as goodwill.
Effective January 1, 2002 we adopted the provisions of SFAS No. 142,“Goodwill and Other Intangible Assets”, (“SFAS 142”). As required by the provisions of SFAS 142, we test goodwill for impairment using a two-step process, based on the reporting unit fair value. The first step is a screen for potential impairment, while the second step measures impairment, if any. We completed the required impairment tests of goodwill and noted no impairment of goodwill in 2004, 2003 and 2002.
Goodwill impairment tests are highly subjective. Such tests include estimating the fair value of our reporting units. As required by SFAS No. 142, we compared the estimated fair value of the reporting units with their respective carrying amounts including goodwill. We define a reporting unit as an operating segment. Under SFAS No. 142, fair value refers to the amount for which the entire reporting unit could be bought or sold. Our methods for estimating reporting unit values include asset and liability fair values and other valuation techniques, such as discounted cash flows and multiples of earnings, or other financial measures. Each of these methods involve significant estimates and assumptions, including estimates of future financial performance and the selection of appropriate discount rates and valuation multiples.
Claims Reserves and Estimates
Claims reserves consist of estimates of cargo loss, physical damage, liability (personal injury and property damage), employee medical expenses and workers’ compensation claims within our established retention levels. Claims in excess of retention levels are generally covered by insurance in amounts we consider adequate. Claims accruals represent the uninsured portion of pending claims including estimates of adverse development of known claims, plus an estimated liability for incurred but not reported claims. Accruals for cargo loss, physical damage, liability and workers’ compensation claims are estimated based on our evaluation of the type and severity of individual claims and historical information, primarily our own claims experience, along with assumptions about future events combined with the assistance of independent actuaries in the case of workers’ compensation and liability. Changes in assumptions as well as changes in actual experience could cause these estimates to change in the near future.
Workers’ compensation and liability claims are particularly subject to a significant degree of uncertainty due to the potential for growth and development of the claims over time. Claims and insurance reserves related to workers’ compensation and liability are estimated by an independent third-party actuary and we refer to these estimates in establishing the reserve. Liability reserves are estimated based on historical experience and trends, the type and severity of individual claims and assumptions about future costs. Further, in establishing the workers’ compensation and liability reserves, we must take into account and estimate various factors, including, but not limited to, assumptions concerning the nature and severity of the claim, the effect of the jurisdiction on any award or settlement, the length of time until ultimate resolution, inflation rates in health care and in general, interest rates, legal expenses and other factors. Our actual experience may be different than our estimates, sometimes significantly. Additionally, changes in assumptions made in actuarial studies could potentially have a material effect on the provision for workers’ compensation and liability claims.
We have experienced significant increases in insurance premiums and claims expense since September 2001 primarily related to workers’ compensation and liability insurance. The increases have resulted from a significant increase in excess insurance premiums, adverse development in prior year losses, unfavorable accident experience and an increase in retention levels related to liability and workers’ compensation claims. The retention level for liability insurance was $3,000 prior to September 2001 and has increased to ranges of $250,000 to $2.0 million in subsequent periods. Prior to November 2000, we had no retention for workers’ compensation insurance, which has increased to ranges of $250,000 to $500,000 in subsequent periods. Our insurance and claims expense varies based on the frequency and severity of claims, the premium expense and the level of self-insured retention. The increase in self-insurance retention levels since November 2000 and September 2001 has caused insurance and claims expense to be higher and more volatile than in historical periods.
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Factors that May Affect Future Results
Our future results may be affected by a number of factors over which we have little or no control. The following issues and uncertainties, among others, should be considered in evaluating our business and growth outlook.
Our business is subject to general economic and business factors that are largely out of our control, any of which could have a materially adverse effect on our operating results.
Our business is dependent on a number of factors that may have a materially adverse effect on our results of operations, many of which are beyond our control. The most significant of these factors are recessionary economic cycles, changes in customers’ inventory levels, excess tractor or trailer capacity, and downturns in customers’ business cycles, particularly in market segments and industries where we have a significant concentration of customers, such as our floorcovering operation, and in regions of the country where we have a significant amount of business. Economic conditions may adversely affect our customers and their ability to pay for our services. Customers encountering adverse economic conditions represent a greater potential for loss, and we may be required to increase our allowance for doubtful accounts. We also are affected by increases in interest rates, fuel prices, taxes, tolls, license and registration fees, insurance costs, and the rising costs of healthcare for our employees. We could be affected by strikes or other work stoppages at our facilities or at customer, port, border, or other shipping locations.
In addition, we cannot predict the effects on the economy or consumer confidence of actual or threatened armed conflicts or terrorist attacks, efforts to combat terrorism, military action against a foreign state or group located in a foreign state, or heightened security requirements. Any of these could lead to border crossing delays or the temporary closing of the United States/Canada or United States/Mexico border. Enhanced security measures could impair our operating efficiency and productivity and result in higher operating costs.
We operate in a highly competitive industry, and our business may suffer if we are unable to adequately address downward pricing pressures and other results of competition.
Numerous competitive factors could impair our ability to maintain or improve our current profitability. These factors include the following.
• We compete with many other truckload carriers of varying sizes and, to a lesser extent, with less-than-truckload carriers, railroads, airfreight forwarders, and other transportation companies. Many of our competitors have more equipment, a wider range of services, greater capital resources, or other competitive advantages. |
• Many of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth in the economy. This may limit our ability to maintain or increase freight rates or to continue to expand our business. |
• Many of our customers also operate their own private trucking fleets, and they may decide to transport more of their own freight. |
• In recent years, many shippers have reduced the number of carriers they use by selecting “core carriers” as approved service providers. As this trend continues, some of our customers may not select us as a “core carrier.” |
• Many customers periodically solicit bids from multiple carriers for their shipping needs, and this process may depress freight rates or result in a loss of business to competitors. |
If we are unable to successfully execute our business strategy, our growth and profitability could be adversely affected.
Our strategy for increasing our revenue and profitability includes continuing to allocate more of our resources to our dedicated and expedited intermodal rail strategic business units, improving the profitability of all of our strategic business units through yield management and cost control efforts. We may experience difficulties and higher than expected expenses in reallocating our assets and developing new business. If we are unable to continue to grow and improve the profitability of our business units, our growth prospects, results of operations, and financial condition will be adversely affected.
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Ongoing insurance and claims expenses could significantly affect our earnings.
Our future insurance and claims expenses may exceed historical levels, which could reduce our earnings. We self-insure for a significant portion of our claims exposure from workers’ compensation, auto liability, general liability, and cargo and property damage, as well as employees’ health costs. We also are responsible for our legal expenses within our self-insured retentions for liability and workers’ compensation claims. We currently reserve for anticipated losses and expenses and regularly evaluate and adjust our claims reserves to reflect actual experience. However, ultimate results may differ from our estimates, which could result in losses above reserved amounts. Our self-insured retention limit for auto liability claims is $2.0 million per occurrence, $500,000 per occurrence for workers’ compensation claims, and $250,000 per occurrence for cargo claims. Because of our substantial self-insured retention amounts, we have significant exposure to fluctuations in the number and severity of claims. Our operating results will be adversely affected if we experience an increase in the frequency and severity of claims for which we are self-insured, accruals of significant amounts within a given period, or claims proving to be more severe than originally assessed.
We maintain insurance above the amounts for which we self-insure with insurance carriers that we believe are financially sound. Although we believe our aggregate insurance limits are sufficient to cover reasonably expected claims, it is possible that one or more claims could exceed those limits. Insurance carriers recently have been raising premiums for many businesses, including trucking companies. As a result, our insurance and claims expense could increase, or we could find it necessary to again raise our self-insured retention or decrease our aggregate coverage limits when our policies are renewed or replaced. Our operating results and financial condition may be adversely affected if these expenses increase, if we experience a claim in excess of our coverage limits, or if we experience a claim for which we do not have coverage.
Our revenue growth may not continue at historical rates, which could adversely affect our stock price.
We have achieved significant revenue growth since becoming a public company in 1994. Over the past several years, however, our revenue growth rate has slowed. There is no assurance that our revenue growth rate will return to historical levels or that we can effectively adapt our management, administrative, and operating systems to respond to any future growth. Our operating margins could be adversely affected by future changes in and expansion of our business or by changes in economic conditions. Slower or less profitable growth could adversely affect our stock price.
Increases in driver compensation or difficulty in attracting and retaining drivers could affect our profitability and ability to grow.
Like nearly all trucking companies, we experience substantial difficulty in attracting and retaining sufficient numbers of qualified drivers, including independent contractors. In addition, due in part to current economic conditions, including the higher cost of fuel, insurance, and tractors, the available pool of independent contractor drivers has been declining. Because of the shortage of qualified drivers, the availability of alternative jobs due to the current economic expansion, and intense competition for drivers from other trucking companies, we expect to continue to face difficulty increasing the number of our drivers, including independent contractor drivers, who are one of our principal sources of planned growth. In addition, our industry suffers from high turnover rates of drivers. This turnover rate requires us to continually recruit a substantial number of drivers in order to operate existing equipment. If we are unable to continue to attract a sufficient number of drivers and independent contractors, we could be required to adjust our compensation packages, let trucks sit idle, or operate with fewer trucks and face difficulty meeting shipper demands, all of which would adversely affect our growth and profitability. In addition, the compensation we offer our drivers and independent contractors is subject to market forces, and we may find it necessary to continue to increase their compensation in future periods. Any increase in our operating costs or in the number of tractors without drivers would adversely affect our growth and profitability.
Fluctuations in the price or availability of fuel may increase our cost of operation, which could materially and adversely affect our profitability.
We require large amounts of diesel fuel to operate our tractors, and diesel fuel is one of our largest operating expenses. Diesel fuel prices fluctuate greatly, and prices and availability of all petroleum products are subject to economic, political, and other market factors beyond our control. Substantially all of our customer contracts contain fuel surcharge provisions to mitigate the effect of price increases over base amounts set in the contract. However,
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these arrangements do not fully protect us from fuel price increases and also may result in our not receiving the full benefit of any fuel price decreases. Our fuel surcharges to customers do not fully recover all fuel increases because engine idle time, out-of-route miles, and non-revenue miles, which are not generally billable to the customer. We currently do not have any fuel hedging contracts in place.
If we are unable to retain our senior officers, our business, financial condition, and results of operations could be harmed.
We are highly dependent upon the services of the following senior officers: Patrick E. Quinn, our Co-Chairman of the Board, President, and Treasurer; Max L. Fuller, our Co-Chairman of the Board, Chief Executive Officer, and Secretary; Ray M. Harlin, Executive Vice President — Finance and Chief Financial Officer; and Jeffrey S. Wardeberg, Executive Vice President — Operations and Chief Operating Officer. We do not have employment agreements with any of these persons, except for salary continuation agreements with Messrs. Quinn and Fuller. The loss of any of their services could have a materially adverse effect on our operations and future profitability. We must continue to develop and retain a core group of managers if we are to realize our goal of expanding our operations and continuing our growth, and we may be unable to do so.
Increased prices, reduced productivity, and restricted availability of new revenue equipment may adversely affect our earnings and cash flows.
We have experienced higher prices for new tractors over the past three years, partially as a result of government regulations applicable to newly manufactured tractors and diesel engines. More restrictive Environmental Protection Agency, or EPA, emissions standards for 2007 will require vendors to introduce new engines, and some carriers may seek to purchase large numbers of tractors with pre-2007 engines, possibly leading to shortages. Our business could be harmed if we are unable to continue to obtain an adequate supply of new tractors and trailers for these or other reasons. As a result, we expect to continue to pay increased prices for equipment and incur additional expenses and related financing costs for the foreseeable future. Furthermore, the new engines are expected to reduce equipment productivity and lower fuel mileage and, therefore, increase our operating expenses. We have agreements covering the terms of trade-in and/or repurchase commitments from our primary equipment vendors for disposal of a substantial portion of our revenue equipment. The prices we expect to receive under these arrangements may be higher than the prices we would receive in the open market. We may suffer a financial loss upon disposition of our equipment if these vendors refuse or are unable to meet their financial obligations under these agreements, if we fail to enter into definitive agreements that reflect the terms we expect, if we fail to enter into similar arrangements in the future, or if we do not purchase the required number of replacement units from the vendors.
Our substantial indebtedness and operating lease obligations could adversely affect our ability to respond to changes in our industry or business.
As a result of our level of debt, operating lease obligations, and encumbered assets:
• Our vulnerability to adverse economic conditions and competitive pressures is heightened; |
• We will continue to be required to dedicate a substantial portion of our cash flows from operations to operating lease payments and repayment of debt, limiting the availability of cash for other purposes; |
• Our flexibility in planning for, or reacting to, changes in our business and industry will be limited; |
• Our profitability is sensitive to fluctuations in interest rates because some of our debt obligations are subject to variable interest rates, and future borrowings and lease financing arrangements will be affected by any such fluctuations; and |
• Our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, or other purposes may be limited. |
Our operating leases and debt obligations could materially and adversely affect our ability to finance our future operations or capital needs or to engage in other business activities. There is no assurance that additional financing will be available when required or, if available, will be on terms satisfactory to us.
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Service instability in the railroad industry could increase our operating costs and reduce our ability to offer expedited intermodal rail services, which could adversely affect our revenues and operating results.
We depend on the major U.S. railroads for our expedited intermodal rail services. In most markets, rail service is limited to a few railroads or even a single railroad. Any reduction in service by the railroads with whom we have relationships is likely to increase the cost of the rail-based services we provide and reduce the reliability, timeliness, and overall attractiveness of our rail-based services.
For example, current service disruptions in the railroad industry have impacted expedited rail service throughout the United States. Although the disruptions have been primarily with railroads other than our major providers, it is possible that future service disruptions that affect our operations may occur, which would decrease demand for, or the profitability of, our expedited intermodal rail business. In addition, because most of the railroads’ workforce is subject to collective bargaining agreements, our business could be adversely affected by labor disputes between the railroads and their union employees. Further, railroads are relatively free to adjust shipping rates up or down as market conditions permit. Price increases could result in higher costs to our customers and our ability to offer expedited intermodal rail services.
We operate in a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future regulations could have a materially adverse effect on our business.
Our operations are regulated and licensed by various U.S., Canadian, and Mexican agencies. Our company drivers and independent contractors also must comply with the safety and fitness regulations of the United States Department of Transportation, or DOT, including those relating to drug and alcohol testing and hours-of-service. Such matters as weight and equipment dimensions are also subject to U.S. and Canadian regulations. We also may become subject to new or more restrictive regulations relating to fuel emissions, drivers’ hours-of-service, ergonomics, or other matters affecting safety or operating methods. Future laws and regulations may be more stringent and require changes in our operating practices, influence the demand for transportation services, or require us to incur significant additional costs. Higher costs incurred by us or by our suppliers who pass the costs onto us through higher prices would adversely affect our results of operations.
Beginning in 2004, motor carriers were required to comply with several changes to DOT hours-of-service requirements that may have a positive or negative effect on driver hours (and miles) and our operations. A citizens’ advocacy group successfully petitioned the courts that the new rules were developed without driver health in mind. Pending further action by the courts or the effectiveness of new rules addressing these issues, Congress has enacted a law that extends the effectiveness of the new rules until September 30, 2005. We cannot predict whether there will be changes to the hours-of-service rules, the extent of any changes, or whether there will be further court challenges. Given this uncertainty, we are unable to determine the future effect of driver hour regulations on our operations. The DOT is also considering implementing higher safety requirements on trucks. These regulatory changes may have an adverse affect on our future profitability.
We may not make acquisitions in the future, or if we do, we may not be successful in integrating the acquired businesses.
We have made eleven acquisitions since becoming a public company in 1994. Accordingly, acquisitions have provided a substantial portion of our growth. There is no assurance that we will be successful in identifying, negotiating, or consummating any future acquisitions. If we fail to make any future acquisitions, our growth rate could be materially and adversely affected.
Any acquisitions we undertake could involve the dilutive issuance of equity securities and/or incurring indebtedness. In addition, acquisitions involve numerous risks, including difficulties in assimilating the acquired company’s operations, the diversion of our management’s attention from other business concerns, risks of entering into markets in which we have had no or only limited direct experience, and the potential loss of customers, key employees, and drivers of the acquired company, all of which could have a materially adverse effect on our business and operating results. If we make acquisitions in the future, there is no assurance that we will be able to negotiate favorable terms or successfully integrate the acquired companies or assets into our business. If we fail to do so, or we experience other risks associated with acquisitions, our financial condition and results of operations could be materially and adversely affected.
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Seasonality
In the trucking industry, results of operations generally show a seasonal pattern as customers increase shipments prior to and reduce shipments during and after the winter holiday season. Additionally, shipments can be adversely impacted by winter weather conditions. Our operating expenses have historically been higher in the winter months due primarily to decreased fuel efficiency, increased maintenance costs of revenue equipment in colder weather and increased insurance and claims costs due to adverse winter weather conditions. Revenue can also be affected by bad weather and holidays, since revenue is directly related to available working days of shippers.
Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123R, “Share-Based Payment” (“SFAS 123R”), which is a revision of FASB Statement No. 123,“Accounting for Stock-Based Compensation”,(“SFAS 123”)”, supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees (“Opinion 25”) and amends FASB Statement No. 95,“Statement of Cash Flows”. Generally, the approach in SFAS 123R is similar to the approach described in SFAS 123. However, SFAS 123Rrequires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The provisions of the Statement were to be applied in the first interim or annual period beginning after June 15, 2005. On April 15, 2005 the Securities and Exchange Commission announced that it would provide for phased-in implementation of SFAS 123R. In accordance with this new implementation process, we are required to adopt SFAS 123R no later than January 1, 2006.
As permitted by SFAS 123, we currently account for share-based payments to employees using Opinion 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of SFAS 123R’s fair value method will have a significant impact on our results of operations, although it will have no impact on our overall financial position. The impact of the adoption of SFAS 123R cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had we adopted SFAS 123R in prior periods, the impact of that standard would have approximated the impact of SFAS 123 as described in the disclosure of pro forma net income (loss) and earnings (loss) per share in Note 4 to our Consolidated Financial Statements. SFAS 123R also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. While we cannot estimate what those amounts will be in the future (because they depend on, among other things, when employees exercise stock options), the amount of operating cash flows recognized in prior periods for such excess tax deductions were not material to our consolidated financial position or results of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
Our market risk is affected by changes in interest rates. Historically, we have used a combination of fixed rate and variable rate obligations to manage our interest rate exposure. Fixed interest rate obligations expose us to the risk that interest rates might fall. Variable interest rate obligations expose us to the risk that interest rates might rise.
We are exposed to variable interest rate risk principally from our securitization facility and revolving credit facility. We are exposed to fixed interest rate risk principally from equipment notes and mortgages. At June 30, 2005 we had borrowings totaling $122.6 million comprised of $49.4 million of variable rate borrowings and $73.2 million of fixed rate borrowings. Holding other variables constant (such as borrowing levels), the earnings impact of a one-percentage point increase/decrease in interest rates would not have a material impact on our statements of operations.
Commodity Price Risk
Fuel is one of our largest expenditures. The price and availability of diesel fuel fluctuates due to changes in production, seasonality and other market factors generally outside our control. Many of our customer contracts contain fuel surcharge provisions to mitigate increases in the cost of fuel. Fuel surcharges to customers do not fully recover all of fuel increases due to engine idle time and out-of-route and empty miles not billable to the customer.
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Item 4. | Controls and Procedures |
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our controls and procedures were effective as of the end of the period covered by this report. There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected or that are reasonably likely to materially affect our internal control over financial reporting.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer as appropriate, to allow timely decisions regarding disclosures.
We have confidence in our internal controls and procedures. Nevertheless, our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure procedures and controls or our internal controls will prevent all errors or intentional fraud. An internal control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of such internal controls are met. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all internal control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.
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U.S. XPRESS ENTERPRISES, INC.
PART II - OTHER INFORMATION
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | | Total Number of Shares Purchased | | Average
Price Paid Per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1) |
April 1, 2005 –April 30, 2005 | | 0 | | | N/A | | 0 | | $ | 5,956,167 |
May 1, 2005 –May 25, 2005 | | 145,000 | | $ | 11.918 | | 145,000 | | $ | 0 |
June 1, 2005 –June 30, 2005 | | 0 | | | N/A | | 0 | | $ | 0 |
Total | | 145,000 | | $ | 11.918 | | 145,000 | | $ | 0 |
(1) | We announced a stock repurchase program on May 24, 2004, which expired on May 25, 2005. Under that plan, our Board of Directors authorized us to repurchase up to $10 million of our Class A common stock on the open market or in privately negotiated transactions. In July 2005 our Board of Directors authorized us to repurchase up to $15 million of its Class A common stock on the open market or in privately negotiated transactions. Such shares and the associated dollar values are not included in this table. We are currently permitted to repurchase approximately $4.3 million of our Class A common stock under our revolving credit facility, and we are seeking approval from the lending group on the facility of the remaining amount authorized by our Board of Directors. |
Item 4. | Submission of Matters to a Vote of Security Holders |
The annual meeting of stockholders of U.S. Xpress Enterprises, Inc. was held on May 5, 2005, for the purpose of electing five directors for one-year terms. Proxies for the meeting were solicited pursuant to Section 14(a) of the Exchange Act, and there was no solicitation in opposition to management's nominees. Each of management's nominees for director as listed in the Proxy Statement was elected.
The voting tabulation on the election of directors was as follows:
| | Shares
Voted
"FOR" | | Shares
Voted
"WITHHOLD" | | Shares
Voted
"ABSTAIN" |
Patrick E. Quinn | | 13,791,483 | | 3,926,102 | | 0 |
Max L. Fuller | | 13,791,483 | | 3,926,102 | | 0 |
James E. Hall | | 17,444,399 | | 273,186 | | 0 |
John W. Murrey, III | | 17,371,230 | | 346,355 | | 0 |
Robert J. Sudderth, Jr. | | 17,444,323 | | 273,262 | | 0 |
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(1) | 3.1 | Restated Articles of Incorporation of the Company. |
| | |
(2) | 3.2 | Restated Bylaws of the Company. |
| | |
(1) | 4.1 | Restated Articles of Incorporation of the Company filed as Exhibit 3.1 and incorporated herein by reference. |
(2) | 4.2 | Restated Bylaws of the Company filed as Exhibit 3.2 and incorporated herein by reference. |
| | |
(1) | 4.3 | Agreement of Right of First Refusal with regard to Class B Shares of the Company dated May 11, 1994, by and between Max L. Fuller and Patrick E. Quinn. |
| | |
| 10.38 | Asset purchase agreement dated May 27, 2005 by and among Forward Air, Inc., Xpress Global Systems, Inc., U.S. Xpress Enterprises, Inc., and certain persons set forth therein. |
| | |
| 10.39 | First Amendment to Revolving Credit and Letter of Credit Loan Agreement by and between the Company and Fleet National Bank, LaSalle Bank, National Association, Bank Banking and Trust Company, national City Bank and Regions Financial Corporation as Lenders, and SunTrust Bank as Lender and Administrative Agent for the Lenders. |
| | |
| 10.40 | Waiver and Consent by and between the Company and SunTrust Bank, as Administrative Agent for the Lenders. |
| | |
| 10.41 | Omnibus Amendment No. 1 among Xpress Receivables, LLC as Borrower, U.S. Xpress, Inc. and Xpress Global Systems, Inc. as Servicers, Three Pillars Funding LLC as Lender and SunTrust Capital Markets, Inc. as agent and administrator for Lender. |
| | |
| 31.1 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| | |
| 31.2 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| | |
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| | |
| 32.2 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| | |
(1) | Incorporated by reference from Registration Statement on Form S-1 dated May 20, 1994 (SEC File No. 33-79208) |
(2) | Incorporated by reference from Form 10-Q on November 9, 2004 (SEC Commission File No. 0-24806) |
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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 9, 2005 | By: /s/ Ray M. Harlin |
| Ray M. Harlin |
| Chief Financial Officer |
| |
| |
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