USX - Earnings call transcript Q2 2022 | U.S. Xpress Enterprises Inc

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Operator

Greetings, ladies and gentlemen, and welcome to U.S. Xpress Capital Second Quarter of 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions].

conference recorded. this reminder, a is being As I Mr. turn you your host, over to would now Vice Investor Garvie, Matt President, Relations.

Matt Garvie

call. Xpress' Thank you, our CFO, Xpress earnings who U.S. Welcome call to Fuller, operator, and Eric our good second afternoon, today, followed will quarter Peterson, will discuss and CEO, President everyone. by the Eric lead U.S. our XXXX results. financial

includes that are statements. information forecasts considered other and today discussion Our forward-looking

uncertainties reflect our factors number current outlook, can subject to are results a obligation and U.S. are Xpress' risk statements they of most XX-K to differ risks We SEC. to recent duty these the undertake that in These or actual our cause update Form statements. While materially. with no filed described forward-looking

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

As a be of on will Web this reminder, of section Investors replay site. call our the available a

updated an We have accompany on today's discussion Web presentation also posted site supplemental to our investor.usxpress.com. at

be turn call over the referencing as part Fuller. that, to like of this will portions We supplement with to of would today's call. I And Eric

Eric Fuller

Eric to the our of I other our in like our in for Today, second Thank And quarter the achievements everyone. of key financial market provide update XXXX. segments. you, highlight the on business discussion provide Matt, good and half key outlook following quarter, would an results Variant's metrics afternoon, Peterson's from

$XX was sequentially more size quarter, X,XXX driven seated tractors, operating to exiting bringing quarter the by fleet XXX which This quarter. truck Variant. revenue and than the X% sequential surcharges, rate revenue both fuel declines in of first primarily million to second Turning in offset mile. increase the to compared utilization an increase an increase of generated the in Variant of the in net count per of

Variant In the quarter. since grown end approximately of second tractors addition, the has XXX

our for experience continue is three service drivers. on the freight for We technology the while Improving and we for overall can cost Variant of engine market our same improving large movement, for Variant that to levels way because improve and one our and the time company pillars. our the professional customers results growth to both financial at that believe depends main implement capacity,

primarily First, within improving our tractor utilization fleet. Variant per

our allow which percentage continuing per per term Second, the Variant's of critical three utilization. both costs our a us fixed the are overall lowering results. will mile, fixed as of in economics tractor achieving our finally, increase a as help a our per fleet will count larger and tractor to revenue lower term and All realize mile. to costs as of financial near revenue pillars over better percentage to the and And across long to we improve these

remained turnover at the Variant's elevated Variant's XXX%. metrics. at Looking in key other quarter

increase decline a in the in due in than market within to second sequentially rates a $X,XXX per mile disruption get fleet. on to improving to why utilization offset materially was portion utilization Revenue of in back quarters a a While contracted of to business per turnover it to to of a is short-term as due which few quarter a tractor the this focused so large from for improve week we're fleet lower was portion fleet our quarter. spot the order the lower rate in declined utilization has our operations, where more and per the the combination meaningful ago, reorganizing in

Fleet quarter. Finally, our safety be continues company. in company. improving the preventable accidents years to the the And few we've staff, entire but safety sequentially in only over tremendous a per last made million miles progress for not decreased the priority Variant X% across

to our off and well continues the year. perform made its per utilization continues second to interest higher in late see and will Turning to in increased from per well Healthy quarter to division utilization week QX to XXX count building We improve and division from truck The Total throughout rate to grow, we margins continues truckload momentum accretive an add to fleet our Get per opportunities division in our the our truck here, XXXX. Dedicated. revenue Revenue quarter. Dedicated initiatives first by benefit sequentially modestly per XX% from driver through rate week to lower these was by to second revenue increase which mile turnover. lowering see be benefited the results. driven utilization Customer opportunity was more The from as of compared offerings The additional by truck X% dedicated increased growth, and truck compared tractors a year-over-year a revenue $X,XXX. in per partially our to quarter the increased offset to per year-over-year. responsible improving mile, primarily and last the of in per higher sequential overall driven combination Dedicated dynamics

Turning to Brokerage.

allowed the cost margin which lower gross cover benefited market Our a to Brokerage from for softening loads. segment conditions

and quarter. quarterly third our our and the each benefit this the right-sized quarter to segment's operating second to consistent the operational in current beginning year of we these expect income If in persist, half quarter. conditions of quarter, second operating the expect with market changes in second investments technology income we Additionally, headcount we the be

over Before we segment to discuss employees will three gives the began stand-alone its commercial the division profitable I executing would Dedicated Dedicated business. call that, division me our who performance improvements I to place wanted like our last to turn over With that Brokerage ability two quarters Eric We're start-up I and pillars. than performing better a thank Eric Peterson. financial with Variant well. on and again to to have in worked our to Seeing the a when our turn financials, the our from once the in over tirelessly a our confidence its main much Peterson around to year call mature turn

Eric Peterson

Thank This everyone. guidance good quarter in the like well capital turning afternoon, the discuss performance afternoon, back before provide Eric, to financial second market would allocation I as and financial our as to our over provide you, and some outlook. call Eric to priorities

their allocation are reminder, disciplined being business. Executing per previous key restoring a metrics performance the on tractor, very we growth, responsible while same As continued which with focused Variant's consolidated projects our our initiatives levels, sequential fixed time are to focused these financial reducing and capital drive in results. key fleet overall to at our will the to improvement improved for on cost financial

a $XX.X lower first decrease primarily revenue segment from was to Turning increased revenue program, X.X% an generated quarter, revenues due of increase Brokerage the truckload Sequentially, performance up partially truckload of by Increased surcharge the of million, in Brokerage quarter. $X segment in segment revenues, of $XXX.X excludes which million to million second fuel revenue by offset offset our were our year-over-year. volumes. revenue were partially $XX.X with million. We which associated

the $X.X million, Turning income. operating income from first decrease a quarter. million operating sequentially to adjusted adjusted was $X.X of Total

benefit which a we income former excludes on are Our terminal gain million subsidiary. the a a adjusted leasing the $X of to operating from sale

positive on headwind. included surcharge in the an fleet rates, $XX in income Partially recovery operating in spot to the million our compared in addition, first offsetting contractual quarter of Brokerage approximately XX% which XXXX, were factors business, overall increase growth, other approximate over-the-road overall market Dedicated rates. the segment In growth and factors lower resulting caused these positive fuel significant of our decrease an and

occurred our liable from and lacks which IPO we in million $X.X to the carrier claims In that accident assets prior expense sufficient addition, pay. incurred primarily resulting to for incremental an

more in help as revenues which larger Finally, our will term, trucks a grew to over well. fleet over our count. utilization, tractor cost metrics, economics of trucks. to the our as which fixed truckload of percentage the infrastructure XX key fixed per improve long these by size, the we continue a quarter, But than importantly, able due namely in pressures, we as be near faster tractor increased to overall It's critical to grow will points we primarily costs that base our term better a Variant's larger fleet realize costs over spread of basis

due to expenditures, the net capital to relate proceeds The the was net to equipment in of increase from and were equipment capital trailers, expenditures. CapEx net $XX.X period compared same million which from primarily for Year-to-date, of lower of XXXX. to well used deliveries, sale half as timing primarily the XXXX. million Turning tractors to $XX.X year-over-year first of as compared

was which of quarter at fleet was tractor the Our end average second at age approximately XXXX. same of of the the the quarter, years two end as second of the the

reminder, and trailer we loan a tractor financing combination acquisitions. agreement use our and of to a As fund leases

capital In cancelling in focused allocation return respective adequate business coming drive by forward, the the that deprioritizing forward are will terms of longer the other have allocating delaying and on which capital quarters timeframes we going no projects, either or projects project.

continuing and our to include as fund priorities technology initiatives. Our utilization fleet as well

which of at we XXXX. end $XXX.X including million net balances, the debt, long-term cash to of $XXX.X quarter, current the maturities Turning end less At million net define debt. to compared as second the was debt

disciplined from grow divestitures primarily allocation capital assets of We approach. decrease overall over a as but expect non-core time, our and leverage more to earnings also our

and Turning the loan operations year, $XXX.X our to credit using flow of from we second $XX.X fund the of from and cash facility, the with the fleet operations use to million availability second agreement liquidity. first generated company's the separate cash the as day-to-day acquisitions. plus under quarter, million liquidity, our to for million arrangements while and our financing operations, together half revolving We define we in At fund generated end revolver lease quarter. $XX.X which of cash was

to with the Turning following. we guidance. assist expect your models, To

full per digit we fleet a For sequential our driven the quarters with approximately count instituted mile, utilization truckload XXXX, the have XX% to Variant from gain growth increase and down see discipline that spot year. coming been operations first during and of benefits rates into rate contract growth, we fleet low approximately improvement the and XX%. additional the year, modest Sequential up half in the the as percent in rate in OTR primarily average for blended double through truck year overall full by expect structure

for discrete addition, year, rate following; million, the $XX that, outlook. Eric million our items, the of I and $XXX call between XX% capital expense net will In approximately before for $XXX tax and interest Fuller million. turn XX% an With expect to between we effective back full expenditures the and any

Eric Fuller

Eric. you, Thank

income. are pressure as inflation a market, and their primarily moderating to we portion terms overall of to the In comprise of continues market consumer continue discretionary expecting demand overall end the growing

carriers smaller spot profitable, through the also expect we the delivery-related market as are of capacity, opportunities half to exit year and costs. of expense, as including rates of but only the a terms result In costs, equipment higher market fuel second less increased declining maintenance not

In anticipate market, we the the addition, dynamic cause from will entrants entering equipment well. these headwinds discourage likely new it to plays extent moderate the this prices market. in To out used market would that could as

Variant's As our for in improvement can namely forward. on we are we continued overall fleet and projects drivers sequential back overall to drive larger we business restoring previous what focused more shifting market discipline, Xpress, metrics are levels, control from key and to believe as the which the the cost their which continued financial is U.S. softer benefiting will results, growth, to capital drive carriers, allocating continued on focus to

in are to ready are of areas demonstrating our key with model. leverage operating the operator, potential that, these to focused take And Our questions. we efforts business

Operator

gentlemen, for back we reached you have and the hand Eric presentation. now closing it Thank remarks. of Mr. I end sir. Fuller very the will much, Ladies to

Eric Fuller

Thank today. for you and you, thank everybody operator, attending

to here you. a execute. continue continue next we'll focus an on on out, is to this quarter. from and earnings focused on and improving We talk we Thank will And be area basis of our you sequential to

Operator

conference. Ladies you Thank you this participation. today's sir. you, your disconnect And and your now lines. concludes may for Thank gentlemen,

U.S. Xpress Enterprises (USX) 6 Aug 222022 Q2 Earnings call transcript