The Brokerage segment continues to provide additional selectivity for the Company’s assets to optimize yield, while at the same time offering more capacity solutions to customers. Brokerage segment revenue decreased to $54.1 million in the fourth quarter of 2019 compared to $64.9 million in the fourth quarter of 2018, primarily as a result of decreased revenue per load.  Brokerage operating loss was $2.0 million in the fourth quarter of 2019 as compared to operating income of $3.0 million in the year ago quarter.

Liquidity and Capital Resources

During the quarter the Company closed on a new $250 million credit facility. The former facility was fully paid off with proceeds of new facility and contemporaneous real estate and equipment financings. The refinancing supports several goals including improved pricing, the ability to grow the borrowing base with the business, and additional flexibility to execute the plan to convert a significant portion of our fleet from operating lease financing to owned financing over time.

As of December 2019, we had $123.0 million of liquidity (defined as cash plus availability under the Company’s revolving credit facility), $390.4 million of net debt (defined as long-term debt, including current maturities, less cash balances), and $230.8 million of total stockholders' equity. Capital expenditures, net of proceeds, related primarily to tractors and trailers were $81.6 million for 2019, excluding equipment financed under operating leases. We had approximately $20.0 million of net capital expenditures close in early January, which were originally planned to close in December. Had this transaction closed in December our capital expenditures would have approximated $100.0 million for the year.  In addition, as previously disclosed, we refinanced our primary credit agreement in January 2020.  Following expected post-closing perfection actions, liquidity under the new facility is expected to be over $100 million.

Outlook

The Company’s baseline assumptions for 2020 include slow growth in industry-wide truckload shipments, a continued reduction of total truckload capacity from the market, which is expected to drive an inflection in pricing later in the year, and relatively benign cost inflation. The first quarter is generally our weakest quarter of the year as we experience lower revenue per tractor and higher costs than the other quarters due to seasonal freight fluctuations and harsher operating conditions. While we see positive trends in certain areas, there continues to be uncertainty in the short-term environment, which will impact the actual sequential margin deterioration in the first quarter. We continue to believe that market conditions will improve in the back half 2020. The timing and magnitude of market changes will have a significant impact on our quarterly results given our substantial operating leverage.

Conference Call

The Company will hold a conference call to discuss its fourth quarter results at 8:30 a.m. (Eastern Time) on February 6, 2020.  The conference call can be accessed live over the by phone dialing 1-877-423-9813 or, for international callers, 1-201-689-8573 and requesting to be joined to the U.S. Xpress Fourth Quarter 2019 Earnings Conference Call. A replay will be available starting at 11:30 a.m. (Eastern Time) on February 6, 2020, and can be accessed by dialing 1-844-512-2921 or, for international callers, 1-412-317-6671. The passcode for the replay is 13698255. The replay will be available until 11:59 p.m. (Eastern Time) on February 13, 2020.

Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company’s website at investor.usxpress.com. The online replay will remain available for a limited time beginning immediately following the call. Supplementary information for the conference call will also be available on this website.

(1) Non-GAAP Financial Measures

Pursuant to the requirements of Regulation G and Regulation S-K, we have provided reconciliations of Adjusted Operating Ratio, Adjusted Operating Income, Adjusted Net Income Attributable to Controlling Interest, and Adjusted EPS to the most comparable GAAP financial measures at the end of this press release.

About U.S. Xpress Enterprises

Founded in 1985, U.S. Xpress Enterprises, Inc. is the nation’s fifth largest asset-based truckload carrier by revenue, providing services primarily throughout the United States. We offer customers a broad portfolio of services using our own truckload fleet and third‐party carriers through our non‐asset‐based truck brokerage network. Our modern fleet of tractors is backed up by a team of committed professionals whose focus lies squarely on meeting the needs of our customers and our drivers.

Forward-Looking Statements

This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases such as "expects," "estimates," "projects," "believes," "anticipates," "plans," "intends," “outlook,” “strategy,” “target,” “optimistic,” “focus,” “continue,” “will,” “could,” “should,” “may,” and similar terms and phrases. In this press release, such statements may include, but are not limited to, statements in the "Outlook" section, statements regarding the freight environment, expected operating ratio or adjusted operating ratio, the expected impact of our driver, frictionless order and other initiatives,and any other statements concerning: any projections of earnings, revenues, cash flows, capital expenditures, or other financial items; any statement of plans, strategies, or objectives for future operations; any statements regarding future economic or industry conditions or performance; and any statements of belief and any statements of assumptions underlying any of the foregoing. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those in the forward-looking statements: general economic conditions, including inflation and consumer spending; political conditions and regulations, including future changes thereto; changes in tax laws or in their interpretations and changes in tax rates; future insurance and claims experience, including adverse changes in claims experience and loss development factors, or additional changes in management's estimates of liability based upon such experience and development factors that cause our expectations of insurance and claims expense to be inaccurate or otherwise impacts our results; impact of pending or future legal proceedings; future market for used revenue equipment and real estate; future revenue equipment prices; future capital expenditures, including equipment purchasing and leasing plans and equipment turnover (including expected trade-ins); fleet age; future depreciation and amortization; changes in management’s estimates of the need for new tractors and trailers; future ability to generate sufficient cash from operations and obtain financing on favorable terms to meet our significant ongoing capital requirements; our ability to maintain compliance with the provisions of our credit agreement; freight environment, including freight demand, rates, capacity, and volumes; future asset utilization; loss of one or more of our major customers; our ability to renew dedicated service offering contracts on the terms and schedule we expect; surplus inventories, recessionary economic cycles, and downturns in customers' business cycles; strikes, work slowdowns, or work stoppages at the Company, customers, ports, or other shipping related facilities; increases or rapid fluctuations in fuel prices, as well as fluctuations in surcharge collection, including, but not limited to, changes in customer fuel surcharge policies and increases in fuel surcharge bases by customers; interest rates, fuel taxes, tolls, and license and registration fees; increases in compensation for and difficulty in attracting and retaining qualified professional drivers and independent contractors; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, intermodal, and brokerage (including digital brokerage) competitors; regulatory requirements that increase costs, decrease efficiency, or reduce the availability of drivers, including revised hours-of-service requirements for drivers and the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program that implemented new driver standards and modified the methodology for determining a carrier’s Department of Transportation safety rating; future safety performance; our ability to reduce, or control increases in, operating costs; future third-party service provider relationships and availability; execution of the Company’s current business strategy or changes in the Company’s business strategy; the ability of the Company’s infrastructure to support future organic or inorganic growth; our ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations; in relation to exiting our fixed cost investment in U.S.-Mexico cross border business, the actual costs of severance, leased vehicle turn-in, equipment repositioning, and other expenses associated with exiting the operations; the impact of supply and demand on availability and pricing of replacement loads for tractors in our U.S. network; the prices obtained for assets being disposed of; and the timing and amount of deferred consideration collected; our ability to adapt to changing market conditions and technologies; disruptions to our information technology; the cost of and our ability to effectively and efficiently implement technology initiatives; costs, diversion of management’s attention, and potential payments made in connection with the multiple class action lawsuits arising out of our IPO; and our ability to remediate several outstanding material weaknesses. Readers should review and consider these factors along with the various disclosures by the Company in its press releases, stockholder reports, and filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.

Contact:

U.S. Xpress Enterprises, Inc.

Brian Baubach

Sr. Vice President Corporate Finance and Investor Relations
investors@usxpress.com

Source: U.S. Xpress Enterprises, Inc.

Condensed Consolidated Income Statements (unaudited)
		Quarter Ended December 31,								Year Ended December 31,
(in thousands, except per share data)		2019				2018				2019				2018
Operating Revenue:
Revenue, excluding fuel surcharge		$	405,288			$	422,530			$	1,538,450			$	1,622,083
Fuel surcharge			44,345				46,692				168,911				182,832
Total operating revenue			449,633				469,222				1,707,361				1,804,915
Operating Expenses:
Salaries, wages and benefits			140,914				135,252				530,885				535,994
Fuel and fuel taxes			48,062				54,009				189,800				227,525
Vehicle rents			23,039				19,727				80,064				78,639
Depreciation and amortization, net of (gain) loss			19,839				24,558				94,337				97,954
Purchased transportation			132,572				131,756				481,589				481,945
Operating expense and supplies			30,956				28,662				118,394				118,064
Insurance premiums and claims			25,770				20,612				88,959				85,075
Operating taxes and licenses			3,737				3,701				13,849				14,133
Communications and utilities			2,269				2,426				8,928				9,575
Gain on sale of subsidiary			(161	)			-				(831	)			-
Impairment of assets held for sale			-				10,693				-				10,693
General and other operating			21,273				16,684				75,317				66,412
Total operating expenses			448,270				448,080				1,681,291				1,726,009
Operating Income			1,363				21,142				26,070				78,906
Other Expenses (Income):
Interest Expense, net			5,269				5,095				21,635				34,866
Early extinguishment of debt			-				-				-				7,753
Equity in loss of affiliated companies			6,793				131				7,063				381
Other, net			-				101				26				136
Impairment in equity method investments			-				1,804				-				1,804
			12,062				7,131				28,724				44,940
Income (Loss) Before Income Taxes			(10,699	)			14,011				(2,654	)			33,966
Income Tax Provision (Benefit)			(1,114	)			6,779				389				7,860
Net Income (Loss)			(9,585	)			7,232				(3,043	)			26,106
Net Income (Loss) attributable to non-controlling interest			9				235				604				1,207
Net Income (Loss) attributable to controlling interest		$	(9,594	)		$	6,997			$	(3,647	)		$	24,899
Income (Loss) Per Share
Basic earnings (losses) per share		$	(0.20	)		$	0.14			$	(0.07	)		$	0.84
Basic weighted average shares outstanding			49,022				48,319				48,788				29,470
Diluted earnings (losses) per share		$	(0.20	)		$	0.14			$	(0.07	)		$	0.83
Diluted weighted average shares outstanding			49,022				49,466				48,788				30,133

Condensed Consolidated Balance Sheets (unaudited)
		December 31,				December 31,
(in thousands)		2019				2018
Assets
Current assets:
Cash and cash equivalents		$	5,687			$	9,892
Customer receivables, net of allowance of $63 and $59, respectively			183,706				190,254
Other receivables			15,253				20,430
Prepaid insurance and licenses			11,326				11,035
Operating supplies			7,193				7,324
Assets held for sale			17,732				33,225
Other current assets			15,831				13,374
Total current assets			256,728				285,534
Property and equipment, at cost			880,101				898,530
Less accumulated depreciation and amortization			(388,318	)			(379,813	)
Net property and equipment			491,783				518,717
Other assets:
Operating lease right-of-use assets			276,618				-
Goodwill			57,708				57,708
Intangible assets, net			27,214				28,913
Other			30,058				19,615
Total other assets			391,598				106,236
Total assets		$	1,140,109			$	910,487
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	68,918			$	63,808
Book overdraft			1,313				-
Accrued wages and benefits			24,110				24,960
Claims and insurance accruals			51,910				47,442
Other accrued liabilities			9,127				8,120
Liabilities associated with assets held for sale			-				6,856
Current portion of operating leases			69,866				-
Current maturities of long-term debt and finance leases			80,247				113,094
Total current liabilities			305,491				264,280
Long-term debt and finance leases, net of current maturities			315,797				312,819
Less debt issuance costs			(1,223	)			(1,347	)
Net long-term debt and finance leases			314,574				311,472
Deferred income taxes			20,692				19,978
Long term liabilites associated with assets held for sale			-				8,353
Other long-term liabilities			5,249				7,713
Claims and insurance accruals, long-term			56,910				60,304
Noncurrent operating lease liability			206,357				-
Commitments and contingencies			-				-
Stockholders' Equity:
Common Stock			490				484
Additional paid-in capital			250,700				251,742
Accumulated deficit			(20,982	)			(17,335	)
Stockholders' equity			230,208				234,891
Noncontrolling interest			628				3,496
Total stockholders' equity			230,836				238,387
Total liabilities and stockholders' equity		$	1,140,109			$	910,487

Condensed Consolidated Cash Flow Statements (unaudited)
		Year Ended December 31,
(in thousands)		2019				2018
Operating activities
Net income (loss)		$	(3,043	)		$	26,106
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Early extinguishment of debt			-				7,753
Deferred income tax provision			714				5,691
Impairments of assets held for sale and equity method investments			-				12,497
Equity in loss of affiliated company			7,063				381
Depreciation and amortization			90,484				90,831
Losses on sale of property and equipment			3,853				7,123
Share based compensation			3,846				2,248
Other			660				(9,876	)
Gain on sale of subsidiary			(831	)			-
Changes in operating assets and liabilities
Receivables			7,149				(8,972	)
Prepaid insurance and licenses			70				(4,006	)
Operating supplies			(3,294	)			725
Other assets			(7,790	)			(3,438	)
Accounts payable and other accrued liabilities			5,572				(21,020	)
Accrued wages and benefits			(704	)			6,304
Net cash provided by operating activities			103,749				112,347
Investing activities
Payments for purchases of property and equipment			(151,751	)			(223,939	)
Proceeds from sales of property and equipment			77,966				55,370
Other			(2,000	)			2,480
Proceeds from sale of subsidiary, net of cash			(5,845	)			-
Net cash used in investing activities			(81,630	)			(166,089	)
Financing activities
Borrowings under lines of credit			107,300				292,332
Payments under lines of credit			(107,300	)			(321,665	)
Borrowings under long-term debt			106,341				362,013
Payments of long-term debt and finance leases			(136,228	)			(504,180	)
Payments of financing costs			(190	)			(4,166	)
Proceeds from IPO, net of issuance costs			-				246,616
Net proceeds from issuance of common stock under ESPP			349				-
Tax withholding related to net share settlement of restricted stock awards			(44	)			-
Purchase of noncontrolling interest			(8,659	)			-
Payments of long-term consideration for business acquisition			(990	)			(1,010	)
Repurchase of membership units			-				(217	)
Book overdraft			1,313				(3,537	)
Net cash (used in) provided by financing activities			(38,108	)			66,186
Change in cash balances of assets held for sale			11,784				(11,784	)
Net change in cash and cash equivalents			(4,205	)			660
Cash and cash equivalents
Beginning of year			9,892				9,232
End of period		$	5,687			$	9,892

Key Operating Factors & Truckload Statistics (unaudited)
		Quarter Ended December 31,								%				Year Ended December 31,								%
		2019				2018				Change				2019				2018				Change
Operating Revenue:
Truckload1		$	351,158			$	357,675				-1.8	%		$	1,352,583			$	1,379,266				-1.9	%
Fuel Surcharge			44,345				46,692				-5.0	%			168,911				182,832				-7.6	%
Brokerage			54,130				64,855				-16.5	%			185,867				242,817				-23.5	%
Total Operating Revenue		$	449,633			$	469,222				-4.2	%		$	1,707,361			$	1,804,915				-5.4	%
Operating Income (Loss):
Truckload		$	3,382			$	18,138				-81.4	%		$	24,071			$	69,088				-65.2	%
Brokerage		$	(2,019	)		$	3,004				-167.2	%		$	1,999			$	9,818				-79.6	%
		$	1,363			$	21,142				-93.6	%		$	26,070			$	78,906				-67.0	%
Operating Ratio:
Operating Ratio			99.7	%			95.5	%			4.4	%			98.5	%			95.6	%			3.0	%
Adjusted Operating Ratio2			99.7	%			92.5	%			7.8	%			98.1	%			94.1	%			4.2	%
Truckload Operating Ratio			99.1	%			95.5	%			3.8	%			98.4	%			95.6	%			2.9	%
Adjusted Truckload Operating Ratio2			99.1	%			91.9	%			7.8	%			97.9	%			93.7	%			4.5	%
Brokerage Operating Ratio			103.7	%			95.4	%			8.7	%			98.9	%			96.0	%			3.0	%
Truckload Statistics:3
Revenue Per Mile1		$	2.132			$	2.196				-2.9	%		$	2.122			$	2.127				-0.2	%
Average Tractors -
Company Owned			4,808				4,708				2.1	%			4,681				4,880				-4.1	%
Owner Operators			1,855				1,587				16.9	%			1,758				1,383				27.1	%
Total Average Tractors			6,663				6,295				5.8	%			6,439				6,263				2.8	%
Average Revenue Miles Per Tractor Per Week			1,752				1,775				-1.3	%			1,767				1,801				-1.9	%
Average Revenue Per Tractor Per Week1		$	3,735			$	3,897				-4.2	%		$	3,748			$	3,831				-2.2	%
Total Miles			171,351				161,605				6.0	%			658,705				645,829				2.0	%
Total Company Miles			120,322				118,819				1.3	%			466,821				493,420				-5.4	%
Total Independent Contractor Miles			51,029				42,786				19.3	%			191,884				152,409				25.9	%
Independent Contractor fuel surcharge			12,275				11,953				2.7	%			46,862				41,898				11.8	%
1 Excluding fuel surcharge revenues
2 See GAAP to non-GAAP reconciliation in the schedules following this release.
3 Excludes revenue, miles and tractors for services performed in Mexico.

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