EXHIBIT 99.1 - PRESS RELEASE
U.S. XPRESS TO REVISE ACCOUNTING FOR INTEREST RATE SWAPS
CHATTANOOGA, Tenn. (August 14, 2002) - U.S. Xpress Enterprises, Inc. (Nasdaq/NM:
XPRSA) announced today that it will revise its accounting for a non-cash charge
previously recognized in the first quarter of 2002 for a write-off related to
interest rate swap agreements, which ceased to qualify as cash flow hedges in
connection with the first quarter refinancing of its credit facility. The
accounting revision will increase first quarter 2002 earnings per share by $0.04
and year-to-date earnings per shareby $0.02, while decreasing second quarter
2002 earnings per share by $0.02. The second half 2002 earnings per share will
be negatively impacted by approximately $0.02 per share.
In the first quarter of 2002, the Company closed a $100 million
five-year senior secured revolving credit facility. In connection therewith, $45
million in outstanding interest rate swap agreements ceased to qualify as cash
flow hedge instruments. After consultation with the Company's former independent
public accountants, a non-cash charge of $983,000 was recognized in the first
quarter of 2002 related to the cumulative change in fair value of the interest
rate swap agreements formerly recognized in other comprehensive income.
On May 17, 2002, the Board of Directors engaged new independent public
accountants. In connection with their review of the second quarter financial
statements, the independent public accountants advised the Company that they
believe the non-cash charge related to the interest rate swap agreements should
not have been recorded in the first quarter of 2002. The appropriate accounting
treatment under generally accepted accounting principles is to amortize such
amount over the remaining term of the respective interest rate swap agreements,
which will mature in 2003. The Company concurs with this conclusion and will
restate its previously disclosed quarterly operating results for 2002.
Ray Harlin, Executive Vice President and Chief Financial Officer,
stated, "We want to emphasize that the change relates solely to a revision in
the application of generally accepted accounting principles for this non-cash
charge, and there were no accounting improprieties. Moreover, it does not in any
way affect our cash position or our operations."
XPRSA Revises Accounting for Rate Swaps
Page 2
August 14, 2002
A summary of the effect of this restatement is as follows:
Three Months Ended Three Months Ended
March 31, 2002 June 30, 2002
-------------------------- ------------------------
As Reported Restated As Reported Restated
----------- -------- ----------- --------
Income from Operations $ 2,840 $ 2,840 $5,642 $5,642
Interest Expense, net 3,365 3,405 3,375 3,605
Other 983 - (7)
------- ------- ------ ------
4,348 3,405 3,368 3,605
Income (Loss) Before Income Taxes (1,508) (565) 2,274 2,037
Income Tax Provision (Benefit) (613) (236) 1,070 1,106
------- ------- ------ ------
Income (Loss) Before Extraordinary Item (895) (329) 1,204 931
Extraordinary loss on early extinguishment of
debt, net of income taxes of $668 (1,108) (1,108) - -
------- ------- ------ ------
Net Income (Loss) $(2,003) $(1,437) $1,204 $ 931
======= ======= ====== ======
Net Income (Loss) Per Share Before Extraordinary
Item $ (0.06) $ (0.02) $ 0.09 $ 0.07
Extraordinary Item (0.08) (0.08) - -
------- ------- ------ ------
Income (Loss) Per Share $ (0.14) $ (0.10) $ 0.09 $ 0.07
======= ======= ====== ======
Six Months Ended
June 30, 2002
---------------------------
As Reported Restated
----------- --------
Income from Operations $ 8,482 $ 8,482
Interest Expense, net 6,740 7,010
Other 976
------- -------
7,716 7,010
Income Before Income Taxes 766 1,472
Income Tax Provision 457 869
------- -------
Income Before Extraordinary Item 309 603
Extraordinary loss on early extinguishment of
debt, net of income taxes of $668 (1,108) (1,108)
------- -------
Net Loss $ (799) $ (505)
======= =======
Income Per Share Before Extraordinary Item $ 0.02 $ 0.04
Extraordinary Item (0.08) (0.08)
------- -------
Loss Per Share $ (0.06) $ (0.04)
======= =======
XPRSA Revises Accounting for Rate Swaps
Page 3
August 14, 2002
U.S. Xpress Enterprises, Inc. is the fifth-largest publicly owned
truckload carrier in the United States. The Company provides regional, dedicated
and expedited 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 sector. U.S. Xpress focuses on customers operating in dedicated,
just-in-time or deferred air freight market segments, while utilizing one of the
largest team-operated fleets in the industry. CSI/Crown, Inc., a wholly owned
subsidiary, is the leading provider of transportation, warehousing and
distribution services to the floor coverings industry. Dedicated Xpress
Services, a division of CSI/Crown, provides airport-to-airport transportation
services to the airfreight and airfreight forwarding industries through a
network of approximately 81 locations in North America. CSI/Crown also provides
distribution-related services to a number of other industries, including retail,
automotive and building materials. The Company also offers logistic services
through its joint ownership of Transplace, an Internet-based global
transportation logistics company.
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.