U.S. Xpress Enterprises, Inc. on Thursday announced results for the fourth quarter of 2019, including decrease in operating revenue.
The Fourth Quarter 2019 Highlights:
Operating revenue of $449.6 million compared to $469.2 million in the fourth quarter of 2018
Operating income of $1.4 million compared to $21.1 million in the fourth quarter of 2018
Operating ratio of 99.7 percent compared to 95.5 percent in the fourth quarter of 2018
Net loss attributable to controlling interest of $9.6 million, or $0.20 per diluted share, included a $6.8 million, or $0.14 per share, write off of an equity method investment compared to Net income attributable to controlling interest of $7.0 million in the fourth quarter of 2018
Adjusted net loss attributable to controlling interest, a non-GAAP measure, of $2.8 million, or $.05 per diluted share, compared to Adjusted net income of $19.5 million in the fourth quarter of 2018
Eric Fuller, president and CEO, said, “Our fourth quarter results were impacted by the continued challenging market conditions experienced through much of 2019, posing a headwind to our financial results. Despite the market backdrop, I am very encouraged with the many successes that our team achieved this past year, as we made significant progress advancing our strategic initiatives focused on delivering improved efficiency. One area of focus is to continue to engineer the company to provide for a future of advanced technology, automation and high optimization. Our team has made real strides digitizing our systems to reduce the number of manual decisions made on a daily basis. We also made strong progress in our goal of delivering a ‘frictionless order’. When complete, we will significantly reduce the level of repetitive work required by our drivers and, as a result, allow them to spend more of their time moving freight and servicing our customers.”
The operating revenue was $449.6 million, a decrease of $19.6 million compared to the fourth quarter of 2018. Excluding revenue from the company’s Mexico operations, which were discontinued in January 2019, operating revenue decreased $6.0 million. The decrease was primarily attributable to a decrease of $10.7 million in Brokerage revenue partially offset by increased volumes in our truckload division.
Operating income for the fourth quarter of 2019 was $1.4 million compared to $21.1 million in the fourth quarter of 2018. Operating ratio for the fourth quarter of 2019 was 99.7 percent compared to 95.5 percent in the prior year quarter.
Net loss attributable to controlling interest for the fourth quarter of 2019 was $9.6 million compared to met income attributable to controlling interest of $7.0 million in the prior year quarter. The fourth quarter of 2019 included a $6.8 million impairment charge of an equity method investment. The adjusted net loss attributable to controlling interest excluding this charge was $2.8 million or $.05 per share.
Mr. Fuller said, “Our Dedicated division continued to perform very well in the fourth quarter having delivered its third consecutive quarter of record productivity. We were pleased that average revenue per tractor per week remained above $4,000, while we grew the truck count in this division by 2.9 percent sequentially. The execution in Dedicated through the year has been excellent and consistent with our long-term strategy, which is to continue to grow the business over time as attractive opportunities arise.”
In the Over-the-Road division, the persistent oversupply of tractors relative to market demand continued to pressure spot pricing lower by more than 30 percent compared to the prior year quarter and overshadowed the efficiency gains that were experienced across parts of the operations. Average revenue per tractor per week declined 10.3 percent compared with the fourth quarter of 2018. Average revenue per mile decreased 7.3 percent compared with the 2018 quarter, while average revenue miles per tractor per week decreased 3.2 percent.
The Dedicated division’s average revenue per tractor per week increased $163 per tractor per week, or 4.2 percent compared to the fourth quarter of 2018 on a 2.9 percent increase in average revenue per mile and higher miles per tractor. The company continues to see consistent results in its Dedicated division despite the current adverse market conditions, said officials.
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.
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, the company 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. The company 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 the capital expenditures would have approximated $100.0 million for the year. In addition, as previously disclosed, the company refinanced its primary credit agreement in January 2020. Following expected post-closing perfection actions, liquidity under the new facility is expected to be over $100 million.