U.S. Xpress Enterprises, Inc. Reports Fourth Quarter 2018 Results

U.S. Xpress Enterprises, Inc. (NYSE:USX) (the Company) today announced results for the fourth quarter of 2018.

Fourth Quarter 2018 Highlights

  • Operating revenue of $469.2 million, an increase of 8.8% compared to the fourth quarter of 2017
  • Operating income of $21.1 million compared to $12.5 million reported in the fourth quarter of 2017
  • Operating ratio of 95.5%, a 160 basis point improvement compared to the fourth quarter of 2017
  • Adjusted operating ratio1, a non-GAAP measure, of 92.5%, a 280 basis point improvement compared to the fourth quarter of 2017
  • Net income attributable to controlling interest of $7.0 million, or $0.14 per diluted share, compared to $9.5 million in the fourth quarter of 2017
  • Adjusted net income attributable to controlling interest1, a non-GAAP measure, of $19.5 million, or $0.39 per diluted share, compared to $0.9 million in the fourth quarter of 2017

Fourth Quarter Financial Performance

         
Quarter Ended December 31, Year Ended December 31,
2018 2017 2018 2017
Operating revenue $ 469,222 $ 431,233 $ 1,804,915 $ 1,555,385
Revenue, excluding fuel surcharge $ 422,530 $ 390,489 $ 1,622,083 $ 1,417,173
Operating income $ 21,142 $ 12,457 $ 78,906 $ 28,608
Adjusted operating income1 $ 31,835 $ 18,520 $ 96,036 $ 37,032
Operating ratio 95.5 % 97.1 % 95.6 % 98.2 %
Adjusted operating ratio1 92.5 % 95.3 % 94.1 % 97.4 %
Net income (loss) attributable to controlling interest $ 6,997 $ 9,499 $ 24,899 $ (4,060 )
Adjusted net income loss attributable to controlling interest1 $ 19,494 $ 879 $ 48,066 $ (11,205 )
Earnings (loss) per diluted share $ 0.14 $ 1.49 $ 0.83 $ (0.64 )
Adjusted earnings per diluted share1 $ 0.39 $ 0.14 $ 1.59 $ (1.75 )
 
1 See GAAP to non-GAAP reconciliation in the schedules following this release
 

Eric Fuller, CEO and President, commented, I am very proud of our results. For the fourth quarter, our adjusted operating ratio improved 280 basis points, year over year, to 92.5%. This quarters performance represents the sixth consecutive quarter of improvement and is the best adjusted operating ratio that we have delivered in 20 years. Our focus has been to manage the business by core metrics that impact Rate, Truck Count, Utilization and Cost and measure our success by our adjusted operating ratio. With record financial results, positive early year momentum, and an improved capital structure from our June initial public offering, we are well positioned to continue methodically managing our capital allocation, improving our operational execution, and targeting industry-leading profitability.

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Enterprise Update

Total revenue for the fourth quarter of 2018 increased by $38.0 million to $469.2 million compared to the fourth quarter of 2017. The increase was primarily the result of a 7.2% increase in the Companys rate per mile, a 16.2% increase in brokerage revenues to $64.9 million, and a $5.9 million increase in fuel surcharge revenues. Excluding the impact of fuel surcharges, fourth quarter revenue increased $32.0 million to $422.5 million, an increase of 8.2% compared to the year ago quarter.

Operating income for the fourth quarter of 2018 was $21.1 million, which compares to $12.5 million achieved in the fourth quarter of 2017. Excluding the $10.7 million loss on sale and exit of the Companys fixed cost investment in cross border Mexico operations in the fourth quarter of 2018 and $6.1 million in unfavorable fuel purchase commitments in the fourth quarter of 2017, adjusted operating income for the fourth quarter of 2018 was $31.8 million, compared to $18.5 million in the prior year quarter.

The fourth quarter 2018 adjusted operating ratio was 92.5%, a 280 basis point improvement compared to the fourth quarter of 2017, which is the Companys sixth consecutive quarter of year over year improvement. For the full year 2018, the Companys adjusted operating ratio improved by 330 basis points to 94.1% compared to 2017.

Net income attributable to controlling interest for the fourth quarter of 2018 was $7.0 million compared to $9.5 million in the prior year quarter. In addition to the adjustments described above, the 2017 quarter included a $12.4 million after-tax benefit related to reduction of the Company’s estimated deferred tax liability in accordance with the Tax Cuts and Jobs Act. Adjusted net income attributable to controlling interest for the fourth quarter of 2018 was $19.5 million and compares favorably to $0.9 million in the prior year quarter. Adjusted earnings per diluted share were $0.39 for the fourth quarter of 2018.

Truckload Segment

         
Quarter Ended December 31, Year Ended December 31,
2018 2017 2018 2017
Over the road
Average revenue per tractor per week1 $ 3,919 $ 3,896 $ 3,917 $ 3,500
Average revenue per mile1 $ 2.103 $ 1.998 $ 2.041 $ 1.853
Average revenue miles per tractor per week 1,864 1,950 1,919 1,889
Average tractors 3,525 3,717 3,562 3,788
Dedicated
Average revenue per tractor per week1 $ 3,869 $ 3,518 $ 3,717 $ 3,598
Average revenue per mile1 $ 2.329 $ 2.134 $ 2.259 $ 2.089
Average revenue miles per tractor per week 1,661 1,649 1,645 1,723
Average tractors 2,770 2,583 2,701 2,440
Consolidated
Average revenue per tractor per week1 $ 3,897 $ 3,741 $ 3,831 $ 3,539
Average revenue per mile1 $ 2.196 $ 2.048 $ 2.127 $ 1.940
Average revenue miles per tractor per week 1,775 1,827 1,801 1,824
Average tractors 6,295 6,300 6,263 6,228
1 Excluding fuel surcharge revenues
The above table excludes revenue, miles and tractors for services performed in Mexico.
 

Mr. Fuller said, Market conditions have remained constructive through the fourth quarter of 2018 and into the first quarter of 2019. Since October, we have contractually agreed to rate renewals for approximately 20% of our anticipated truckload revenue for 2019 with an average rate increase of approximately 7%, and we expect full year contract rates to increase between 5“8%.

The Truckload segment achieved an adjusted operating ratio of 91.9% for the fourth quarter of 2018, a 340 bps improvement compared to the adjusted operating ratio of 95.3% achieved in the fourth quarter of 2017. This improvement was a result of the continued successful implementation of the Companys strategic initiatives, disciplined cost management, and increased rates.

In the Over the Road division, as a result of a change in business mix, the Company maintained average revenue per tractor per week in 2018 consistent with the fourth quarter of 2017 while increasing average revenue per mile by 5.3% despite a reduction in average miles per tractor by 4.4%.

The Dedicated divisions average revenue per tractor per week increased 10.0% in the fourth quarter of 2018 compared to the fourth quarter of 2017. The increase was primarily the result of a 9.1% increase in the divisions revenue per mile. The highlight in the fourth quarter of 2018 was the improvement in utilization compared to the fourth quarter of 2017. The Company believes significant progress was achieved during the third quarter through rate increases and adjusting to the change in shipping patterns, which contributed to the fourth quarters sequential utilization improvement. This compares to general fourth quarter seasonality that historically has resulted in an approximate 5% reduction in utilization, sequentially.

Brokerage Segment

           
Quarter Ended December 31, Year Ended December 31,
2018 2017 2018 2017
Brokerage revenue $ 64,855 $ 55,813 $ 242,817 $ 173,218
Gross margin % 13.9 % 15.0 % 13.4 % 13.5 %
Load Count 43,484 42,673 167,760 147,775
 

The brokerage segment continues to provide additional selectivity for the Companys assets to optimize yield while at the same time offering more capacity solutions to customers. Brokerage segment revenues increased 16.2% to $64.9 million in the fourth quarter of 2018 compared to $55.8 million in the fourth quarter of 2017. The increase was primarily the result of higher average revenue per load, due in part to higher fuel prices.

Liquidity and Capital Resources

As of December 31, 2018, U.S. Xpress had $139.9 million of liquidity (defined as cash plus availability under the Companys revolving credit facility), $416.0 million of net debt (defined as long-term debt, including current maturities, less cash balances), and $238.4 million of total stockholders’ equity. Capital expenditures, net of proceeds, related primarily to tractors and trailers and were $79.9 million in the fourth quarter and $168.6 million for full year 2018.

Outlook

Mr. Fuller commented on the Company’s outlook: “For 2019, we continue to expect to achieve four quarters of year over year adjusted operating ratio improvement with a targeted full year adjusted operating ratio of 93.0%.

“From a revenue perspective, we anticipate moderate economic growth and a more balanced relationship of freight demand and available truckload capacity. In this environment, we anticipate holding our asset based fleet size approximately even and optimizing our consolidated revenue base over our Truckload and Brokerage capacity. For the full year, we expect mid-single digit rate increases in our Truckload segment based on a combination of contract rate increases and network management, partially offset by a less robust spot market, which represents approximately 10% of our revenues. In our Brokerage segment, we anticipate flattening revenue due to a combination of tougher comparisons, rate pressure, and an emphasis on Truckload selection of available loads.

“Outside of market forces, we see multiple Company-specific opportunities. We expect to realize in 2019 at least 50% of the expected $10 million of annualized benefits from exiting our fixed cost investment in the Mexico cross-border business market and reallocating our north of the border capacity. In addition, new tractor technology and internal initiatives afford us opportunities in the areas of safety, maintenance, and fuel savings. We also continue to examine new ways to use technology to increase revenue and lower our costs.”

Conference Call

The Company will hold a conference call to discuss its fourth quarter results at 5:00 p.m. (Eastern Time) on February 7, 2019. 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 Earnings Conference Call. A replay will be available starting at 8:00 p.m. (Eastern Time) on February 7, 2019, and can be accessed by dialing 1-844-512-2921 or, for international callers, 1-412-317-6671. The passcode for the replay is 13686257. The replay will be available until 11:59 p.m. (Eastern Time) on February 14, 2019.

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 Companys 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 also will be available on this website.

Non-GAAP Financial Measures

In addition to our net income determined in accordance with U.S. generally accepted accounting principles (˜˜GAAP), we evaluate operating performance using certain non-GAAP measures, including Adjusted Operating Ratio, Adjusted Operating Expenses, Adjusted Operating Income, Adjusted Net Income Attributable to Controlling Interest, and Adjusted EPS (on a consolidated and, as applicable, segment basis). Management believes the use of non-GAAP measures assists investors and securities analysts in understanding the ongoing operating performance of our business by allowing more effective comparison between periods. The non-GAAP information provided is used by our management and may not be comparable to similar measures disclosed by other companies. The non-GAAP measures used herein have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Management compensates for these limitations by relying primarily on GAAP results and using non-GAAP financial measures on a supplemental basis.

About U.S. Xpress Enterprises

Founded in 1985, U.S. Xpress Enterprises, Inc. is the nations 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 thirdparty carriers through our nonassetbased 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, 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 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); expected fleet age; future depreciation and amortization; changes in managements 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; expected 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, and intermodal 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 Administrations Compliance, Safety, Accountability program that implemented new driver standards and modified the methodology for determining a carriers 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 Companys current business strategy or changes in the Companys business strategy; the ability of the Companys 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; and our ability to adapt to changing market conditions and technologies. 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.

 
Condensed Consolidated Income Statements (unaudited)
 
    Quarter Ended December 31,   Year Ended December 31,
(in thousands, except per share data) 2018   2017 2018   2017
Operating Revenue:
Revenue, excluding fuel surcharge $ 422,530 $ 390,489 $ 1,622,083 $ 1,417,173
Fuel surcharge   46,692   40,744     182,832   138,212  
Total operating revenue   469,222   431,233     1,804,915   1,555,385  
Operating Expenses:
Salaries, wages and benefits 135,252 140,934 535,994 543,735
Fuel and fuel taxes 54,009 63,470 227,525 219,515
Vehicle rents 19,727 18,630 78,639 74,377
Depreciation and amortization, net of (gain) loss 24,558 24,347 97,954 93,369
Purchased transportation 131,756 95,147 481,945 308,624
Operating expense and supplies 28,662 29,976 118,064 126,700
Insurance premiums and claims 20,612 24,873 85,075 77,430
Operating taxes and licenses 3,701 3,930 14,133 13,769
Communications and utilities 2,426 1,901 9,575 7,683
General and other operating 16,684 15,568 66,412 61,575
Impairment of assets held for sale   10,693       10,693    
Total operating expenses   448,080   418,776     1,726,009   1,526,777  
Operating Income 21,142 12,457 78,906 28,608
Other Expenses (Income):
Interest Expense, net 5,095 13,393 34,866 49,758
Gain on sale of subsidiary (1,026 ) (1,026 )
Early extinguishment of debt 7,753
Impairment in equity method investments 1,804 1,804
Equity in loss of affiliated companies 131 190 381 1,350
Other, net   101   357     136   (350 )
  7,131     12,914       44,940     49,732  
Income (loss) Before Income Taxes 14,011 (457 ) 33,966 (21,124 )
Income Tax Provision (Benefit)   6,779     (9,984 )     7,860   (17,187 )
Net Income (loss)   7,232     9,527       26,106   (3,937 )
Net Income attributable to non-controlling interest   235     28       1,207   123  
Net Income (loss) attributable to controlling interest $ 6,997   $ 9,499     $ 24,899 $ (4,060 )
 
Income (loss) Per Share
Basic earnings (loss) per share $ 0.14 $ 1.49 $ 0.84 $ (0.64 )
Basic weighted average shares outstanding   48,319   6,385     29,470   6,385  
Diluted earnings (loss) per share $ 0.14 $ 1.49 $ 0.83 $ (0.64 )
Diluted weighted average shares outstanding   49,466   6,385     30,133   6,385  
 
 
Condensed Consolidated Balance Sheets (unaudited)
 
    December 31,   December 31,
(in thousands) 2018 2017
Assets
Current assets:
Cash and cash equivalents $ 9,892 $ 9,232
Customer receivables, net of allowance of $59 and $122, respectively 190,254 186,407
Other receivables 20,430 21,637
Prepaid insurance and licenses 11,035 7,070
Operating supplies 7,324 8,787
Assets held for sale 33,225 3,417
Other current assets   13,374     12,170  
Total current assets   285,534     248,720  
Property and equipment, at cost 898,530 835,814
Less accumulated depreciation and amortization   (379,813 )   (371,909 )
Net property and equipment   518,717     463,905  
Other assets:
Goodwill 57,708 57,708
Intangible assets, net 28,913 30,742
Other   19,615     19,496  
Total other assets   106,236     107,946  
Total assets $ 910,487   $ 820,571  
Liabilities, Redeemable Restricted Units and Stockholder’s Equity (Deficit)
Current liabilities:
Accounts payable $ 63,808 $ 80,555
Book overdraft 3,537
Accrued wages and benefits 24,960 20,530
Claims and insurance accruals 47,442 47,641
Other accrued liabilities 8,120 13,901
Liabilities associated with assets held for sale 6,856
Current maturities of long-term debt   113,094     132,332  
Total current liabilities   264,280     298,496  
Long-term debt, net of current maturities 312,819 480,472
Less unamortized discount and debt issuance costs   (1,347 )   (7,266 )
Net long-term debt   311,472     473,206  
Deferred income taxes 19,978 15,630
Long term liabilites associated with assets held for sale 8,353
Other long-term liabilities 7,713 14,350
Claims and insurance accruals, long-term 60,304 56,713
Commitments and contingencies:
Redeemable restricted units 3,281
Stockholder’s Equity (Deficit):
Common Stock 484 64
Additional paid-in capital 251,742 1
Accumulated deficit   (17,335 )   (43,459 )
Stockholders equity (deficit) 234,891 (43,394 )
Noncontrolling interest   3,496     2,289  
Total stockholder’s equity (deficit)   238,387     (41,105 )
Total liabilities, redeemable restricted units and stockholder’s equity $ 910,487   $ 820,571  
 
 
Condensed Consolidated Cash Flow Statements (unaudited)
 
    Year Ended December 31,
(in thousands) 2018   2017
Operating activities
Net income (loss) $ 26,106 $ (3,937 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Early extinguishment of debt 7,753
Impairments of assets held for sale and equity method investments 12,497
Equity in loss of affiliated companies 381 1,350
Gain on life insurance proceeds (4,000 )
Deferred income tax provision (benefit) 5,691 (20,156 )
Provision for losses on receivables 104
Depreciation and amortization 90,831 91,340
Losses on sale of property and equipment 7,123 2,029
Share based compensation 2,248 673
Original issue discount and deferred financing amortization 1,728 3,791
Interest paid-in-kind (7,516 ) 1,452
Gain on sale of Xpress Global Systems (1,026 )
Purchase commitment interest expense (income) (192 ) (698 )
Changes in operating assets and liabilities
Receivables (8,972 ) (32,051 )
Prepaid insurance and licenses (4,006 ) 45
Operating supplies 725 (510 )
Other assets (3,438 ) (529 )
Accounts payable and other accrued liabilities (21,020 ) 41,930
Accrued wages and benefits   6,304     1,691  
Net cash provided by operating activities   112,347     85,394  
Investing activities
Payments for purchases of property and equipment (223,939 ) (240,417 )
Proceeds from sales of property and equipment 55,370 32,183
Acquisition of business (2,219 )
Proceeds on life insurance 2,980
Other   (500 )   (758 )
Net cash used in investing activities   (166,089 )   (211,211 )
Financing activities
Borrowings under lines of credit 292,332 387,973
Payments under lines of credit (321,665 ) (358,640 )
Borrowings under long-term debt 362,013 224,102
Payments of long-term debt (504,180 ) (118,834 )
Payments of financing costs and original issue discount (4,165 ) (5,844 )
Proceeds from issuance of 16,668,000 shares, net of expenses 246,615
Payments of long-term consideration for business acquisition (1,010 )
Repurchase of membership units (217 ) (523 )
Book overdraft   (3,537 )   3,537  
Net cash provided by financing activities   66,186     131,771  
Cash included in assets held for sale (11,784 )
Net change in cash and cash equivalents 660 5,954
Cash and cash equivalents
Beginning of year   9,232     3,278  
End of year $ 9,892   $ 9,232  
 
 
Key Operating Factors & Truckload Statistics (unaudited)
             
Quarter Ended December 31,   % Year Ended December 31,   %
2018   2017   Change 2018   2017   Change
Operating Revenue:
Truckload1 $ 357,675 $ 334,676 6.9 % $ 1,379,266 $ 1,243,955 10.9 %
Fuel Surcharge 46,692 40,744 14.6 % 182,832 138,212 32.3 %
Brokerage   64,855       55,813     16.2 %   242,817       173,218     40.2 %
Total Operating Revenue $ 469,222 $ 431,233 8.8 % $ 1,804,915 $ 1,555,385 16.0 %
 
Operating Income:
Truckload $ 18,138 $ 9,707 86.9 % $ 69,088 $ 25,200 174.2 %
Brokerage $ 3,004     $ 2,750     nm $ 9,818     $ 3,408     nm
$ 21,142 $ 12,457 69.7 % $ 78,906 $ 28,608 175.8 %
 
Operating Ratio:
Operating Ratio 95.5 % 97.1 % -1.7 % 95.6 % 98.2 % -2.6 %
Adjusted Operating Ratio2 92.5 % 95.3 % -2.9 % 94.1 % 97.4 % -3.4 %
 
Truckload Operating Ratio 95.5 % 97.4 % -2.0 % 95.6 % 98.2 % -2.6 %
Adjusted Truckload Operating Ratio2 91.9 % 95.3 % -3.5 % 93.7 % 97.3 % -3.6 %
Brokerage Operating Ratio 95.4 % 95.1 % 0.3 % 96.0 % 98.0 % -2.1 %
 
Truckload Statistics:3
Revenue Per Mile1 $ 2.196 $ 2.048 7.2 % $ 2.127 $ 1.940 9.6 %
 
Average Tractors –
Company Owned 4,708 5,367 -12.3 % 4,880 5,434 -10.2 %
Owner Operators   1,587       933     70.1 %   1,383       794     74.2 %
Total Average Tractors 6,295 6,300 -0.1 % 6,263 6,228 0.6 %
 
Average Revenue Miles Per Tractor

Per Week

1,775 1,827 -2.8 % 1,801 1,824 -1.3 %
 
Average Revenue Per Tractor

Per Week1

$ 3,897 $ 3,741 4.2 % $ 3,831 $ 3,539 8.3 %
 
Total Miles 161,605 165,663 -2.4 % 645,829 650,545 -0.7 %
 
Total Company Miles 118,819 138,558 -14.2 % 493,420 556,831 -11.4 %
 
Total Independent Contractor Miles 42,786 27,104 57.9 % 152,409 93,713 62.6 %
 
Independent Contractor fuel surcharge 11,953 6,437 85.7 % 41,898 19,877 110.8 %
 
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.
 
 
Non-GAAP Reconciliation – Adjusted Operating Income and Adjusted Operating Ratio (unaudited)
         
Quarter Ended December 31, Year Ended December 31,
(in thousands) 2018 2017 2018 2017
GAAP Presentation:
Total revenue $ 469,222 $ 431,233 $ 1,804,915 $ 1,555,385
Total operating expenses   (448,080 )   (418,776 )   (1,726,009 )   (1,526,777 )
Operating Income $ 21,142   $ 12,457   $ 78,906   $ 28,608  
Operating ratio   95.5 %   97.1 %   95.6 %   98.2 %
 
Non-GAAP Presentation
Total revenue $ 469,222 $ 431,233 $ 1,804,915 $ 1,555,385
Fuel surcharge   (46,692 )   (40,744 )   (182,832 )   (138,212 )
Revenue, excluding fuel surcharge 422,530 390,489 1,622,083 1,417,173
 
Total operating expenses 448,080 418,776 1,726,009 1,526,777
Adjusted for:
Fuel surcharge (46,692 ) (40,744 ) (182,832 ) (138,212 )
Fuel purchase arrangements (6,063 ) (8,424 )
IPO-related costs1 (6,437 )
Impairment of assets held for sale2   (10,693 )     (10,693 )  
Adjusted operating expenses   390,695     371,969     1,526,047     1,380,141  
Adjusted Operating Income $ 31,835   $ 18,520   $ 96,036   $ 37,032  
Adjusted operating ratio   92.5 %   95.3 %   94.1 %   97.4 %
 
Non-GAAP Reconciliation – Truckload Adjusted Operating Income and Adjusted Operating Ratio (unaudited)
 
Quarter Ended December 31, Year Ended December 31,
(in thousands)   2018     2017     2018     2017  
Truckload GAAP Presentation:
Total Truckload revenue $ 404,367 $ 375,420 $ 1,562,098 $ 1,382,167
Total Truckload operating expenses   (386,229 )   (365,713 )   (1,493,010 )   (1,356,967 )
Truckload Operating Income $ 18,138   $ 9,707   $ 69,088   $ 25,200  
Truckload Operating ratio   95.5 %   97.4 %   95.6 %   98.2 %
 
Truckload Non-GAAP Presentation
Total Truckload revenue $ 404,367 $ 375,420 $ 1,562,098 $ 1,382,167
Fuel surcharge   (46,692 )   (40,744 )   (182,832 )   (138,212 )
Revenue, excluding fuel surcharge 357,675 334,676 1,379,266 1,243,955
 
Total Truckload operating expenses 386,229 365,713 1,493,010 1,356,967
Adjusted for:
Fuel surcharge (46,692 ) (40,744 ) (182,832 ) (138,212 )
Fuel purchase arrangements (6,063 ) (8,424 )
IPO-related costs1 (6,437 )
Impairment of assets held for sale2   (10,693 )       (10,693 )    
Truckload Adjusted operating expenses   328,844     318,906     1,293,048     1,210,331  
Truckload Adjusted Operating Income $ 28,831   $ 15,770   $ 86,218   $ 33,624  
Truckload Adjusted operating ratio   91.9 %   95.3 %   93.7 %   97.3 %
 
1 During the second quarter, we incurred one time expenses for the IPO related to pay out of our SAR program and deal bonuses totaling $6,437.
2During the fourth quarter, we incurred an impairment charge related to the exit of our U.S.- Mexico cross border business.
 
 
Non-GAAP Reconciliation – Adjusted Net Income and EPS (unaudited)
         
Quarter Ended December 31, Year Ended December 31,
(in thousands, except per share data) 2018 2017 2018 2017
GAAP: Net Income (Loss) attributable to controlling interest $ 6,997 $ 9,499 $ 24,899 $ (4,060 )
Adjusted for:
Income tax provision (benefit)   6,779   (9,984 )   7,860   (17,187 )
Income (loss) before income taxes attributable to controlling interest $ 13,776 $ (485 ) $ 32,759 $ (21,247 )
Fuel purchase arrangements 6,063 8,424
Debt extinguishment costs in conjunction with IPO1 7,753
Impairment of assets held for sale and other equity method investments2 12,497 12,497
IPO-related costs3         6,437    
Adjusted income (loss) before income taxes   26,273   5,578     59,446   (12,823 )
Adjusted income tax provision (benefit)   6,779   4,699     11,380   (1,618 )
Non-GAAP: Adjusted Net Income (Loss) attributable to controlling interest $ 19,494 $ 879   $ 48,066 $ (11,205 )
 
GAAP: Earnings per diluted share $ 0.14 $ 1.49 $ 0.83 $ (0.64 )
Adjusted for:
Income tax provision (benefit) attributable to controlling interest   0.14   (1.56 )   0.26   (2.69 )
Income (loss) before income taxes attributable to controlling interest $ 0.28 $ (0.07 ) $ 1.09 $ (3.33 )
Fuel purchase arrangements 0.95 1.32
Debt extinguishment costs in conjunction with IPO1 0.26
IPO-related costs3 0.21
Impairment of assets held for sale and other equity method investments2 0.25 0.41
Adjusted income (loss) before income taxes   0.53   0.88     1.97   (2.01 )
Adjusted income tax provision (benefit)   0.14   0.74     0.38   (0.25 )
Non-GAAP: Adjusted Net Income (Loss) attributable to controlling interest   0.39 $ 0.14   $ 1.59 $ (1.75 )
 
1 In connection with the IPO, we recognized an early extinguishment of debt charge related to our then existing term loan.
2During the fourth quarter, we incurred impairment charges related to the exit of our U.S.- Mexico cross border business and dispositions of other equity method investments.
3 During the second quarter, we incurred one time expenses for the IPO related to pay out of our SAR program and deal bonuses totaling $6,437.
 

U.S. Xpress Enterprises, Inc.
Brian Baubach
Sr. Vice President
Corporate Finance and Investor Relations
[email protected]