USX - Earnings call transcript Q3 2018 | U.S. Xpress Enterprises Inc

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Operator

Good afternoon, ladies and gentlemen and welcome to the U.S. Xpress’ Third Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Brian Baubach, Senior Vice President, Corporate Finance. sir. ahead, go Please

Brian Baubach

Officer and third everyone. With quarter Eric Chief today operator Chief Eric participation Officer. Financial me appreciate in are Executive and President our XXXX Fuller, well good you, as We Peterson, afternoon your here as Thank earnings call.

a replay call of As will the on XXXX. available reminder, November of section X, a Investors our this be website through

a on posted also supplemental our at have complement discussion presentation We today’s website investor.usxpress.com. to

that call Litigation may let forward-looking our include me actual materially cause remind of June of beliefs, this and prospectus and risks, Such expectations, that forward-looking meaning risks results implied such everyone statements. factors Before in estimates, uncertainties those XXXX. future XX, from We certain duty we other constitute variety not statements. other forth prospects. final such contain differ and set that statements statements of by begin, statements the undertake Reform update These the Such or subject within any are indicated about do a to plans, Private dated remarks Securities XXXX. are Act to factors to could

the most will to At measure over accordance GAAP. release. be turn these GAAP certain prepared measures performance. A comparable information today’s results will during we U.S. as Fuller. call with substitute to be of believe Eric the evaluating in or be a considered measures, not The I our for should in discuss found call we reconciliation can point, this which can presentation Additionally, of additional useful our non-GAAP earnings in this in isolation non-GAAP

Eric Fuller

year-over-year we delivered and call quarter Peterson we opening I afternoon we market the good would robust signs strategic in designed our growth our business strong of the core efficiency Eric our the operations by initiatives. XX% continue including our to utilization we strategic then results manage the to executing improve start, and excluding upon our of progress culture metrics, have implement will consider execution environment. that amount can improved questions. conclude and the is quarter more with generating operating we initiatives quarter single the adjusted to count, as points detail our then from incremental third review ratio, XX.X% the of This outlook. for or our financial cost. rate, the To quarter history. company’s be as a basis expense operating Clear reviewing in third XX.X%, company that benefit of insurance and and a truck of before change like by improved Brian in net growth, market you, quarter income seen revenue volume results start the Against to third our in we of the achieved largest XXX which in while our everyone. Thank to third discuss unusual, continue and price backdrop

recorded detail, due going level in year-over-year expense As insurance company’s and incurred of for the was million highest our our events. quarter expense discuss claims two Eric primarily in do net the will quarter history the more to $X.X this expect We up continue third not and in to forward.

quarters. anticipate though fleet, the in small event next which of first yet improvement rate addition, show per impact to in the costs miles. lead to This will improvements already full our it recorders over In insurance we quarter implementation to lower third has the our with incident begun quarter insurance that several was million has tractor costs our

quarter surcharges, the continue revenue we fuel as road the increased In per tractor week, compared our division, to Turning quarter the of truck third realize market. in per third highlights, average The the excluding It from to our XXXX, momentum load our of XX% utilization to of worth segment in level division’s from mile. continued rate increase XX.X% dedicated support per ago period, the an division. in of of third the the that year headwinds a quarter primarily was noting XXXX result essentially with is increase was over XXXX. flat in

our During our would the the quarter, supported Initially, contractual commitments over quarter. road division beginning the the reduced impacted utilization. we third division, thought toward the this which adversely of in support dedicated division’s be

progressively peaked increased during and quarter. However, the it

our to the positions. due Over the significantly division last fill road over been these efforts increased support weeks, to our to the traction reduced X has dedicated our by recruiting dedicated provided division in

remained drivers deceleration which for count quarter, in average our of back compared pace has which quarter a Tractor quarter market XXXX. as in our the troughed of count since we hiring, a experienced the reversed. slight road the the through second in the to in half slight resulted third challenging division over Additionally, as third the tractor decline in of the

continue seen we offering as execute team. our marked valued hiring that operations in a have our by to focused a being Looking drivers and to professional increased equipment miles, we modern initiatives driver-centric the improvement a fourth to on are partner them upon quarter, retention and

Our the experienced fourth any far has at quarter in so been point than in the count quarter. third truck higher

surcharges, expected, of offset revenue different third week. first division’s partially per the was revenue accounts’ decrease average patterns as was per XXXX. quarter compared primarily continue X.X% per quarter increase the which Turning a The impacted experienced miles a second the of which to increase in of tractor by in was tractor certain division’s quarter the XXXX. dedicated results be per by week, XXXX in The performing mile than per revenue shipping X% third fuel division’s result a in to increased our division, of XX.X% the to the excluding

second dedicated primarily made We being third quarter a early from the quarter mile the which adjusted improvement increased the the result in a a per have sequential August we of and that rate XXXX. our we decline progress X.X% utilization decline issue rates implemented X.X% of sequential addressing to in X% experienced by utilization basis, realized in on in was as the of in division our

utilization identify with We amend working customers accordingly. are or rates increase our to to opportunities further

revenues increased XX% XX.X% Lastly, time on yield, million to solutions XXXX. a in a in of compared optimize quarter million to fuel of quarter brokerage the third for The third partially the more revenue our to at XXXX as continues was higher increase per additional basis, assets in our the which result count attributable and brokerage customers. was segment $XX.X selectivity capacity to of the load prices. to load $XX.X rise segment primarily to The same offering while provide higher

in our the third are basis sequential we quarter quarter. experienced increase remained on saw continuing we XX conditions the a of continuing to pricing last to in the strongest years. into rates Turning of levels increase have representative quarter the as XXXX market, market the that in since second at fourth one are strong environments the volumes and

Looking review out to to a for first turn margin seasonality to like improvement expect our through XXXX. and results. drive the the Peterson now our the and would on normal the I quarter, to remain ability over optimistic of for continue financial Eric we business outlook call to

Eric Peterson

Eric and afternoon. you, Thank good

our the minutes I summarizing am quarter to benefits profitability to will the there metrics core Eric significant believe we XX.X% a third in ahead net results million our to the few of $XX.X initiatives opportunity is $XXX.X and million of look on revenue. As we of going in XX% quarter spend as income surcharge announce monitor million pleased $XX.X improvement. use fuel record our to realizing prospect increase primarily in for further we increase forward increase for the and per of for are and we discussed, The increase to evaluate XXXX and progress. the revenue continued to revenues Total as to million third the was mile, our compared of brokerage the our quarter an $XX.X revenue increased result by a a XXXX. focus

achieved quarter third run quarter was the prior expense rate. reduction the we to the on incremental $XX.X revenue XXXX. in impact insurance surcharges, insurance third was a quarter million offset and million salary, in $XX.X of primarily partially achieved in quarter XX.X% of $X.X a events by our of in The future XXXX wages the and the third favorably of $X of claims $XX.X to and compares to increase of million gain expense income related year Excluding the Operating indicative quarter. an as increase life and This third to improvement incurring the believe for two compared this period. during quarter the is million, reflected increased was as million, ago do compared insurance was increased $XXX.X despite This year which million claims benefits. not fuel to

third and the to expect the for was earned the XXX net loss in adjusted for history. in income XXXX. year-over-year This as company’s a ratio a a through our compared single XXXX. quarter amount third XXXX net we continue improvement quarter. operating XX.X% mentioned, compared to basis trend the of of Eric have million is quarter we a in income This year the in As Net continuing improvement is prior quarter, $X.X quarter resulted a our point $XX.X of representing of highest million was to

effective earnings our quarter and XX% received the discrete effective in resulting and on continue to rate million be for and came directions. tax tax compared as $X.X $X.X of XX.X%, improving our will both quarter. the in million $X.X effective a XX% operating prior the excluding our we $X.XX. anticipate to fourth determination ratio, to for expense to have positive the share tax discrete year, favorable per Discrete in rate We at addition between item quarter tax affect The interest lower items item. rate tax negative and million our In in same the a was tax

When result our net I anticipate to visibility $XX quarter business conclude, also I $XXX insight as of end further quarter. it on about of IPO, $XXX year. lower This and these relationship. our the line income transactions the We we million when line helpful the we expense approximately our we to we our the timing incurred million expectations think operating you our be the and year closed previous the contractors be in with items our you wages guidance the consider driver developing from thought asked To conjunction of better think essentially the ending as into me independent expenditures prior modeling as variance our insurance to be and are with ago, for which to third the exception benefit. insurance where as of mile $X.X fourth in our to million with is mile Overall, interdependent a to our rate initial relative an cost of in claims the about excess expectations quarter, relative per with per customers and would we life net expectations have results million. initiatives two looking provide during of we we on would thought between than quarters capital analyzed had

Our wages independent driver all costs rates, than and expectations. contractor higher are

and the our to Importantly, tailwind net outpaced our our rate financial results. independent increase driver has has been a and contractor in costs

During lower the XXX XXX road points quarter, tractor our utilization over was our in basis than expected and around points division. lower the in approximately division basis dedicated

unanticipated in this incremental has our of increases is in mile a our been quarter. dedicated increase XX.X%. portion shortfall of rate a third per division’s covered revenue the with component dedicated implemented utilization of This the year-over-year during However,

count than due quarter than third to expected lower recruiting levels tractor slightly average slightly was for lower expected. the Our

Fuel far lower. in both were were essentially increase levels. in expenses slightly expect above insurance and improvement claims hiring tractor and and levels except equipment an costs, seen the in other count slightly thus to fourth and overall we line will All quarter, retention quarter second other have our maintenance were expectations. which while higher, with We general

Lastly, above claims. costs can of nature our and to insurance volatile unpredictability expectations due and the and claims were be self-insured

exceeded costs With for to expect level we our expense turn to not Fuller remarks. to do claims and concluding I’d of and that, ongoing. the be expectations insurance back like Eric Our this call

Eric Fuller

Thank you, Eric.

for results and profitability strategic I through not improvement much satisfied execution continued improvement. opportunity with delivered we continued see strong our am our of the While initiatives,

the and As our in core last discussed business utilization truck quarter’s call, earnings cost. by that and place IPO rate, a we developed roadshow of count, managing strategic with including were have set on metrics, an in initiatives we emphasis

than core ultimately to over and time. improve meaningfully designed deliver metrics initiatives have better an average and ratio We these operating the peer implemented

in do we our much progress While quarter, performance order time. to this have made left we goal over drive optimal achieve to work and

Herndon, our are with As Justin previously July role the team Chief that and we continue will X. a to improvements pleased in time effective be to earnings Chief key a you the work believe in Officer This announcement search most our our your years. call transformation of questions. organization’s history Marketing started organization, please recent November our and Chief strategy driving and XXXX. X hire PAM those in Operating across for today. along for tactical last my open announce cultural accelerate XXXX joining of will Operating the to Officer our Matt continue Harness line XXXX Operator, again assuming the Transport over for profitable We with of we will we exceed will our be Thank Officer of believe year

Operator

question. first Our Ravi of from with comes Instructions] question Stanley. proceed Shankar line [Operator Please Morgan your the from

Ravi Shankar

Thanks. Good afternoon gentlemen.

the XXXX few in is think can what year. conversations season? your we comments we kind up. yet. with So just on your outlook get but already, you fairly on season see how And It’s Eric, the having your on constructive, hasn’t late peak should of shaping view a relatively sounded are XXXX then of your peak numbers seen like, have What’s customers you we but

Eric Fuller

Yes. about year. – Typically, now. usually Hey, us Yes, anything we November think the look Christmas typically the in Eric run see I This season. we will Fuller. that don’t as peak second season first see Ravi. We being tells in this or peak it November our and week that any differently starting at through is

months been with to fact, lot confirmed our peak agreed in In has freight season of and our our dialogue before. already a fact customers and already contractually

kind we we relative but don’t start which that us anything until pick of the up be we week season. see next to peak just we the had waiting anything what to within are business really so that or And anticipated should two, different tells than see

So it line like things concerned, quarter. as as season far and on and in fourth they schedule to as are the peak we look the relates are

Ravi Shankar

it. Got

but guys year while dedicated think that was anniversary normalizes? you customer Is mean the that that’s completely I hurting contract to improved when impact the a side, on or going Just of you, you one that take kind from something this you something? do a

Eric Fuller

have don’t I I but year, are think think continuing Yes, it’s dialogue. we some that a to

try but over in business the We further and days are we improve to to on some with have to work improvement continuing XX customer gotten that internally our so, operations last both externally or the hope I And or so days the next resolution over sort can margins back of to of that XX some expected find probably to accounts. get we overall the those think say margins. so, I our

Ravi Shankar

have Eric here, Got I we it. Peterson, much too history company last can And how don’t ask just the lastly, in years. changed given few a obviously has the especially of you much

quarter kind how to of about third walk and we So OR when sequential quarter think to fourth it comes do seasonality? the

Eric Peterson

Yes.

it especially a year that the right for I look – kind look is it’s quarter and up basis and the usually the that’s works fourth say quarter is at better. than this at at will the seeing for the you approximately points this too. I of think year, way out your the XXX and the am that year basis way I first first it look we seasonality better way that’s usually you – year, I on end better think OR way to quarter by is – type the the of that’s And

to that. obviously better be fourth earnings am I anticipating our So quarter to achieve

Ravi Shankar

Thank Great. you.

Operator

comes your from question question. Stifel. of next Please from Ross Our line with the David proceed

David Ross

gentlemen. Yes, good afternoon

Eric Fuller

afternoon. Good

David Ross

want now Could here, accounts, you operating ratio from you the you to and to if where in not network you doubling where versus the the bit it of little much where or be, about is guess it? the talk where a network you want to want that how – costs much rate that I get margin which you want is how are the from not is probably

Eric Fuller

Yes.

go a is rate would neutral forward rate. of think but mean, on I it, I an obviously I say basis, to aspect

obviously I there some if think So of it, out kind you of is components. cost rate take

the As piece insurance impactful. obviously Eric mentioned, was

our our insurance to down. start We recorders with event to to try are drive continuing costs

our on a disappointment with I like obviously. would track was quarter. big us our utilization aspect I this back get like So that’s see last utilization, to a of it. felt

the further I we think in our couple count, of can some we that can our I division, believe that some quarters. and over driving improvements think over So next we have road truck both utilization, some dedicated the division then And got growth. improvement in start where I get there have we

were third the growth back of the a then, more where some little And third a our quarter. bit to little half are quarter. And quarter. bit we started truck third this in trough quarter the relative we count of the seeing quarter We we seeing this believe in kind and in of hit growth growth

can some of truck do think So we while growth we get think some be we some will marginal to improvement going that couple large over don’t count quarters it’s in earnings. to count help think growth, that – I to next the I our lead have can truck

David Ross

then we $XX you during too on million that down? get going now the to the level and is that self looking recent high And front or IPO to that were about the get harder down. claims Is being experience process that is Yes. make it to the talked burner as insurance something

Eric Peterson

year thank $XX we and million to million. timely will you. That just question. now new policy from as our a was September of $X forward of limited Okay, found Yes, X going this be exposure and down our

David Ross

Okay.

X? the guess quarter happened prior So September incidents in the to I accident or

Eric Peterson

correct. That’s

David Ross

Okay, thank you.

Operator

from Ken your Lynch. Our with Please next question comes from proceed of the question. Merrill line Hoexter

Ken Hoexter

parameters from up benefit XXXX, interest Hey, savings. – great. expected of obviously had a expense can XXXX to mentioned comments the you your you that? Just afternoon. just end at you be some a massive put Eric, on from you XXXX you Good that

there put range are want is a outlook yet? to I – ready you on So just that to

Eric Peterson

Peterson. outlook. more I taking taxes. comment range the expense or account interest not a line the operating is was am Yes. into putting range am putting My and this – on income on a I Eric line. on wasn’t It ratio not operating

Ken Hoexter

Okay.

Eric Peterson

myself So not giving the for. pickup interest am credit I in

Ken Hoexter

no to like where Okay. I imagine operationally the are. it what I say of growth your guess mean, right? I achieve, just still I when seems you revenue but still imagine – a points given talking are given given trying I have, would that you just basis plus on almost you yields not you hundreds improvement, yet, from But would are that’s improvements mean parameters operational

Eric Fuller

Yes, Ken, this is Eric Fuller.

best is look it more think the ratio. operating I at way to to was relative that really comment our

as only ‘XX. So those to we ‘XX our again, will items, we to we count see believe that will just are the that I look mentioned will ratio ‘XX, and think get we things improvement at cost not I we think be that previous operating a operational decent versus XXXX that but mean, improvement. also I of that some relative improve And believe utilization we the some as going truck the environment well. rate that there do in and in

Ken Hoexter

at that at fewer mentioned I Okay. is than to assets a was thoughts thoughts CapEx, maybe, what in on that into delay should you this assets $XX your how read previously. getting get I on it Eric – your target what market developing are are the the you we that your market taking that and your savings – your want is And brought you you point? have lower now guess how then so million you onboard far? or much given just down, Is that look

Eric Peterson

into it to range on it. of it’s of end not the what the insignificant do our a is tractor in couple be our that visibility It the million overall year, like coming read better could significant. we put it’s percentage $XX Yes, – but count. I relative represents of a of too A not much number a not points to trucks would you just more And really to to of it’s me, variance fleet. is million if $XX say

Ken Hoexter

expect higher ahead, year? than or look to thoughts forward, or rolling enter if about I you level starting you you thought and next When would talk do Okay. year have of are as you lower replacement, a anything replacement CapEx similar your this was guess – you on your growth

Eric Peterson

Yes.

during you anticipating lot are quarter think think give CapEx on when depend more year. and initiatives. that of to the for ability on your on a drivers at retain looking first we on I will going our our to I call guidance recruit are the that But those year what in next is and we

the but we see up are growth be we a so my jog you operations little And the see lower, flat, it probably will that get to generally we land we to CapEx extent the bit what’s little will you and and able to in a to will watching probably drive range. extent going that where stay that’s

Ken Hoexter

I up significantly, don’t touch. weakness just you drivers to driver a into pay driving from we your given tight, loosen to the market drivers I available, further, seemed any go step to recruiters you is a another Maybe the housing need one that And does still thoughts remain in mentioned the or something market because guess maybe on thoughts making that on there were market? expand morning know is little more dig carrier still this driver heard that can

Eric Fuller

a into market going starting moved the became of spot beginning independent smaller people over at what’s this part I to of and a lot year think spot on of so robust. moved drivers is of a or in was lot the – the of driver even the market, – lot because Yes, market people carriers

for and pulled carriers the find As answer. obvious carriers back you bit, more leave the people spot somewhat to that spot the work little a going and to are pool market large stable market look go I are for think has

within large market who are that think they It’s people moving probably a And is coming market. have again the that XX necessarily what security moving experience parts in they And what little be people seeing. for don’t more that’s is think over industry we new bit the think bucket from looking not in that’s I I maybe last security. large retracting I more and are in into people bit, are seen there are as are they little the So, provide and spot industry a the days. that those and carriers may that say more we

Ken Hoexter

And to you the comment do swings then that’s the contribution EPS. Eric your volatility tax? that tax pull quarter. on Peterson, understand, items it, presume to Okay. expect to something kind on line, just had just that large want just mean, I we the out not you that forward a discrete I those going I was big lastly normalize but you of swings expect or this on

Eric Peterson

I Yes. anticipate of and There the go possibility discrete to we out is I we running statutes as quarter. enter known in guess but in fourth change any items the XXXX, other don’t

Ken Hoexter

for time. Thanks, guys. Thanks Okay, the alright.

Operator

Our from Stephens. the question. next Delco proceed from Brad with comes Please question your of line

Brad Delco

Good guys. afternoon. Hey,

Eric Peterson

Good afternoon.

Brad Delco

is Maybe of well one first sense OTR dedicated giving your just question, or to OR the other, some the extent relative give you some performing is that? feel versus on comfortable to us where color

Eric Fuller

Yes. division. basis, I we but that the over year know, look I opportunity a it a comparison lot you road provided if mean, as of groups, this in the those individual I really think at has on don’t breakout

entire rates being they up at up this have year. look You for been where

at I road. dedicated. think levels we in opportunities we have better historical road, the opportunities We in will had look as are to some see good margin the if And potentially forward, we in continue over some over

can the but then to right forward expectations for I a if probably that’s XX% dedicated. going difference, of the right think dedicated larger there probably go say over now, not obviously forward road two, in more basis. a I an is basis would comparing tune really has we are margin that the where going you get be now, But to to outperformed of to area there a XX%, if go lot be on is the year most opportunity on of

Brad Delco

asking it. from give Maybe way, term your off sense a far is longer in can a dedicated Got averages? of how it you us different

Eric Peterson

little comfortable perspective dedicated margin get in can our division. And probably margin dedicated. than year feel we where probably what better back if are levels are you at point, think bit levels to we we utilization our I division the in then from very were to Well, we road over seeing comparable opportunity last that currently with a seeing a the dedicated with

Brad Delco

you then Eric your made said ‘XX. think expected normal in seasonality sorry, again, Fuller, through And Yes. XQ remarks, you comment opening I you a

give really just us mean you fourth more that quarter bit detail, a to guess? I does little can So, what for quarter first

Eric Peterson

Sure. Yes, what quarter quarter the be is right think going the expected we I fourth we X between up November to season of year. is fourth is peak through normal think exactly which a and what until end the

quarter. are a projects a and X fairly last robust anticipating in of with normal months. have the visibility things the pretty lot retail season We we fourth with and strong a we different a from being And customers then anticipate actually that

in a into is first of we to quarter, usually for that get step demand. But usually be as fourth we down first us. comes the a to think as all good is quarter, quarter And whole down. a compared bit that XXXX there we year As step going a little know

we while ‘XX think quarter. I of We so, in fourth, first quarter will a it would we little be a the step will be seasonality will we see you see from maybe the down. quarter the down see a in will significant comparable historical not than quarter, what that more think – think first the but ‘XX, that don’t And first quarter to a normal first the think first I step

will it seasonal just be small think a step I down.

are still robust a quarter and we first forecasting So XXXX. fairly really a robust

Brad Delco

quarter – to this you for say going quarter just is it be you that Yes. to think basis points in call are how sounded or trying about and we in assume that better the Is sequentially Eric like fourth I XXX there worse Peterson better. year-over-year normal Maybe am year should OR we seasonality say maybe maybe sorry, be from to to think but just year-over-year, and to clarify, sorry will first could ‘XX?

Eric Peterson

assessment. I think fair that’s a

last conference the quarters. with believe call six we think comment see I we statement will year-over-year I in stick is last believe was made that that we the improvement. we

we believe that year-over-year we for will improvement So, quarters. five I think see next the

Brad Delco

on kind Okay. the somewhere, maybe Peterson, And gains missed Mr. one don’t for give in that know then but sale you you, random that could of number? one if quarter, I I

Eric Peterson

we Yes, that. have

broken You quarter. statement out relatively the what of the but they of cash were first I in in and those the have flows, And back. for don’t second that get we quarter, which have our to consistent is have with experienced out

can You back it into real easy.

Brad Delco

Thank you. Thanks, guys.

Eric Fuller

you. Thank

Operator

from line Please Ossenbeck of Our question. from with Brian next question proceed your JPMorgan. the comes

Brian Ossenbeck

Thanks good my taking for Hey, afternoon. questions.

Going back mentioned not attention and is claims, to in that the your insurance changed costs. be got to you expected there an increase you

In start improve. to fact, they

So sounded you just recorders that Is it of the there we that? am through event started to something walk shouldn’t is expect a increase event else result them? pretty two the quarter. a Why as this events had premiums quarter like in can that offsetting or the I it substantial missing? You really

Eric Peterson

programs, will No, in when making a the It’s the change. premiums program. multi-year change the

believe a we they my premiums, will go so think little it net-net, a win. it’s we bit up And –

Eric Fuller

a just to what last an And perspective. don’t relative we such Yes. cost insurance extraordinary was think seen, insurance is we normal just from have historically quarter that an this that we believe cost that

Brian Ossenbeck

Right, okay.

offset from that fair up? trend realize So be to little here safety normal you way claims ex sum premiums from higher might a the devices, a is whatever the it would bit by

Eric Peterson

that premiums will that to previous back expect the we that get up, exposure million And of would over compared there too. the to go extent I million $XX the correct. $X That’s some

So can’t premium a at net it as increase. just I look

Brian Ossenbeck

Okay, thanks for that. clarifying

what do Are on can around make there sheet, term? the targeted? should have near that that that are rates headed, time, it was side? out the two of on any take think balance do that you is, you where think looking expect we maturities them that can where sense to On based the go pace de-leveraging over headed I turns. in But expect or interest us you remind be you you are just to what or

Eric Peterson

Yes.

our I rotate of we are equipment in the refinancing and as think we perpetually fleet. out

and the that Xs, at de-leveraging IPO the of then time the that’s neighborhood the now increasing through after paying just formula to a And in becomes low end IPO not in so debt are some At point our earnings anticipate Xs being are side our up, the make earnings. we we being down because the deleveraging in where the extent there. progress to math – by on continuing of and low just the it we

as think organization it’s I at been doing X it have is intentional, the over very what been It’s you executing last look sustainable. look years, been what are an we if we at which makes systematic. you if

these but at ultimately are on gains, and looking going through will We are not go to is to think de-lever we initiatives. which They continue earnings, executing XXXX short term why improve are going the our our to we just we organization. that’s

cash that’s to term. are a strategic As we earnings, longer we levered going Xx that’s start where organization, our as improving generating are approach more we our but

As telling that’s to quarter as do not that. you the far happen, am to prepared going I

Brian Ossenbeck

just what can of is DC out you Eric you topics one, hearing last the been then if and headlines are and And in Thanks. the helps. Fuller, of a out a on there lot give sense regulatory Clearly, coming days? FMCSA. these us of side seeing of that Okay, the

just watch your unfolding, any big ‘XX how that wanted in will capacity of and ‘XX? I overall and do ultimately anything to you that that’s sense are to affect timelines So you expecting, think how get

Eric Fuller

Sure.

changes, or changes big anytime there anticipate think XXXX. are probably the changes of regulatory FMCSA late any soon. significant service hours especially out XXXX more We of any don’t coming events being I

don’t see that next really year. the And I so affecting

that probably does so. now from anticipate Don’t to four six something out really or probably think any quarters. changes I next major regulatory are XX you over the if looking occur, months

Brian Ossenbeck

it. the Appreciate Alright. for time. Thanks

Eric Fuller

you. Thank

Operator

with Scott comes the from Our of line next Group Wolfe proceed Please question. Research. from your question

Scott Group

Hey, thanks. Afternoon guys.

Eric Fuller

Good afternoon.

Scott Group

premiums, first if Just in follow-up quantify year? just the quarter, insurance year all in self-insurance, but how side, policy last is the the wanted overall one been to lower time specific place on is this higher to with And insurance accidents then way different two part? be the there any cost new insurance would this the had

Eric Peterson

not to go have and into prepared that going right policy the am of not the the I two back on as savings I specific premiums far am I that, I’d would on it talk net the of say was think old policy, events. the versus And but at I new was $X.X Yes, claims, as the look and the about majority to now. million

Scott Group

be $X this take $X so to or take would that are or give So going million million, – you think costs insurance up give year, significantly do be similar, less?

Eric Peterson

to that that prepared said I right wasn’t now. through I go

put having if on are is XX% overall in quarter, far manage the you volatility that a policy because ultimately in with looked line in new a earnings think I a as as we one we place on increase trying volatile. we item quarterly what our too did that’s basis, to our at specific

adjusted in new tell did this analysis, when We So, are management did with looked what that place. team at have went very driven through we risk program in capacity a our we discount rates did I we you risk-bearing when through will consistent a place. process. – data we putting we went this We

I on the million wasn’t think earnings probably before and a credit were really our we symmetrical profile determined the leverage. risks claim, overall with taking and we that with $XX

indicative revenue line on don’t at why so back if our And in in percentage X that’s expense, insurance go you prudent much X of and program a a look are self-insurance predictability are our looking X profile. just quarterly consistent place will basis basis we we looking spikes this, of this even quarterly think the basis. earnings say our overall is when to of you item really forward with earnings on years, I new some on fairly But over per insurance more will and look of back industry. a insurance mile think for nature in I have at years, because our it’s

Scott Group

comments we the expectations you And And XXXX? quarter start fourth Okay. is utilization utilization, think then Fuller, pricing next year? around for in your you Eric more can do road that early for contract that or then your the over share see reaccelerate to

Eric Fuller

Yes.

it look got a standpoint. you’ve to from also at seasonality utilization So

think last to dedicated I So utilization weeks the sequentially in seen we some we say started have our in our to over four six division. because recruiting in see part traction improvement

trucks trucks. supporting the of had so, we’re over road to been our in we some dedicated those that And get able with

back the over road. into those getting We’re

overall so, And going that’s and our to utilization the our utilization. help over road

this forward see improvement and some going quarter then basis. over into the on should a go So there next we

still I you’ve But over the I year, tough think on a into some we next in little as relates part harder specifically is bit think the going a we improvement marginal utilization the got small comps as piece, basis road. year-over-year to numbers. those to it see can in year-over-year be get

I think better where is I dedicated be side. probably to anticipate going improvement seeing on the

we improvement bit start our to that little working we see customers a and as more with both that see utilization on with that ‘XX throughout improvement get I think operations our there, traction to piece. will

Scott Group

contract And then, the pricing for pricing? next year,

Eric Fuller

are I we X% we to that XX% still to feel be range. that think going in

And I where still we are with XX% the range. we be it’s to feel X% think with in to our so with customers going our today. And conversations we insight that are customers, still and

Scott Group

guys. Okay, thank you

Eric Fuller

you. Thank

Operator

would end like reached to of remarks. closing the gentlemen, And we and to the Ladies for have session. the back management question-and-answer turn call I

Eric Fuller

our are to and fourth to Well, in few quarter everybody obviously forward looking Okay. we discussing months. a here attending we appreciate

thank So you.

Operator

conference. today’s concludes This

time. you may You for Thank your this at your disconnect lines participation.

U.S. Xpress Enterprises (USX) 5 Nov 182018 Q3 Earnings call transcript