<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended Commission file number
JUNE 30, 1996 0-24806
U.S. XPRESS ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
NEVADA 62-1378182
(State or other jurisdiction of (I.R.S. employer identification no.)
Incorporation or organization)
<TABLE>
<CAPTION>
<S> <C> <C>
2931 SOUTH MARKET STREET
CHATTANOOGA, TENNESSEE 37410 (423) 697-7377
(Address of principal executive offices) (Zip Code) (Registrant's telephone no.)
</TABLE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- -------
As of June 30, 1996, 9,035,398 shares of the registrant's Class A common
stock, par value $.01 per share, and 3,040,262 shares of Class B common stock,
par value $.01 per share, were outstanding.
<PAGE>
U.S. XPRESS ENTERPRISES, INC.
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements..................... 3
-------
Consolidated Statements of Operations
for the Three Months Ended
June 30, 1996 and 1995...................................... 4
Consolidated Balance Sheets as of
June 30, 1996 and March 31, 1996............................ 5
Consolidated Statements of Cash Flows for the
Three Months Ended June 30, 1996 and 1995................... 7
Notes to Consolidated Financial Statements....................... 8
Item 2. Management's Discussion and Analysis
-------
of Financial Condition and Results
of Operations........................................ 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K...................... 16
------
SIGNATURES................................................................ 17
</TABLE>
2
<PAGE>
U.S. XPRESS ENTERPRISES, INC.
PART I
FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
The interim consolidated financial statements contained herein reflect
all adjustments which, in the opinion of management, are necessary for a fair
statement of the financial condition and results of operations for the periods
presented. They have been prepared by the Company, without audit, in accordance
with the instructions to Form 10-Q and the rules and regulations of the
Securities and Exchange Commission and do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
Operating results for the three months ended June 30, 1996 are not
necessarily indicative of the results that may be expected for the year ending
March 31, 1997. In the opinion of management, all adjustments necessary for a
fair presentation of such financial statements have been included. Such
adjustments consisted only of items that are of a normal recurring nature.
These interim consolidated financial statements should be read in
conjunction with the Company's latest annual consolidated financial statements
(which are included in the 1996 Annual Report to Stockholders, which is
incorporated by reference in the Company's Form 10-K filed with the Securities
and Exchange Commission on June 28, 1996).
3
<PAGE>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
1996 1995
---------- ----------
<S> <C> <C>
OPERATING REVENUE $ 87,817 $ 65,031
---------- ----------
OPERATING EXPENSES:
Salaries, wages and employee benefits, including contract wages 36,208 29,126
Fuel and fuel taxes 14,351 11,006
Vehicle rents 4,706 3,943
Depreciation and amortization 4,316 4,006
Purchased transportation 6,394 3,405
Operating expenses and supplies 6,119 4,884
Insurance premiums and claims 4,289 2,985
Operating taxes and licenses 1,453 1,226
Communications and utilities 1,547 1,103
Cost of installation supplies sold 2,191 -
Building rental 1,192 543
Bad debt expense 208 137
General and other operating expenses 2,655 1,817
Gain on sales of equipment (53) (129)
Equity in earnings of unconsolidated affiliate - (76)
---------- ----------
Total operating expenses 85,576 63,976
---------- ----------
INCOME FROM OPERATIONS 2,241 1,055
---------- ----------
OTHER INCOME (EXPENSE):
Interest expense, net (1,352) (1,262)
Other income (expense), net 7 4
---------- ----------
Total other expense (1,345) (1,258)
---------- ----------
INCOME (LOSS) BEFORE INCOME TAX (PROVISION) BENEFIT 896 (203)
INCOME TAX (PROVISION) BENEFIT (344) 115
---------- ----------
NET INCOME (LOSS) $ 552 $ (88)
---------- ----------
EARNINGS (LOSS) PER COMMON SHARE $ 0.05 $ (0.01)
========== ==========
WEIGHTED AVERAGE COMMON SHARES
AND COMMON SHARE EQUIVALENTS OUTSTANDING 12,135 12,061
---------- ----------
</TABLE>
(See accompanying Notes to Consolidated Financial Statements)
4
<PAGE>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
JUNE 30, 1996 MARCH 31, 1996
------------- ---------------
(Unaudited)
ASSETS
- - ----------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 794 $ 4,378
Customer receivables, net of allowance 49,837 41,910
Other receivables 3,785 4,318
Prepaid insurance and licenses 2,423 4,837
Operating supplies 3,951 4,033
Deferred income taxes 3,888 3,888
Other current assets 450 482
------------- ---------------
Total current assets 65,128 63,846
------------- ---------------
PROPERTY AND EQUIPMENT, AT COST:
Land and buildings 2,718 2,232
Revenue and service equipment 129,314 126,501
Furniture and equipment 10,245 10,325
Leasehold improvements 5,177 5,086
------------- ---------------
147,454 144,144
------------- ---------------
Less accumulated depreciation and amortization (43,057) (39,702)
------------- ---------------
Net property and equipment 104,397 104,442
------------- ---------------
OTHER ASSETS:
Goodwill, net 6,524 6,579
Other 3,031 2,954
------------- ---------------
Total other assets 9,555 9,533
------------- ---------------
TOTAL ASSETS $ 179,080 $ 177,821
============= ===============
</TABLE>
(See accompanying Notes to Consolidated Financial Statements)
5
<PAGE>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
JUNE 30, 1996 MARCH 31, 1996
-------------- ---------------
<S> <C> <C>
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
- - ------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 11,104 $ 10,025
Accrued wages and benefits 4,119 5,543
Claims and insurance accruals 11,178 11,465
Other accrued liabilities 3,780 3,378
Current maturities of long-term debt 14,208 13,829
-------------- ---------------
Total current liabilities 44,389 44,240
-------------- ---------------
LONG-TERM DEBT, NET OF CURRENT MATURITIES 63,080 61,789
-------------- ---------------
DEFERRED INCOME TAXES 10,885 10,885
-------------- ---------------
OTHER LONG-TERM LIABILITIES 5,084 5,821
-------------- ---------------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 2,000,000
shares authorized, no shares issued - -
Common stock Class A, $.01 par value, 30,000,000
shares authorized, 9,035,398 and 9,034,884
shares issued and outstanding at June 30, 1996
and March 31, 1996, respectively 90 89
Common stock Class B, $.01 par value, 7,500,000
shares authorized, 3,040,262 shares issued and
outstanding at June 30, 1996 and March 31, 1996 30 30
Additional paid-in capital 33,777 33,774
Retained earnings 22,117 21,565
Notes receivable from stockholders (372) (372)
-------------- ---------------
Total stockholders' equity 55,642 55,086
-------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 179,080 $ 177,821
============== ===============
</TABLE>
(See accompanying Notes to Consolidated Financial Statements)
6
<PAGE>
<TABLE>
<CAPTION>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
THREE MONTHS ENDED
JUNE 30,
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 552 $ (88)
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Deferred income tax provision - 48
Depreciation and amortization 4,316 4,006
Gain on sales of equipment (53) (129)
Equity in earnings of unconsolidated affiliate - (76)
Net increase in receivables (7,394) (2,766)
Decrease in prepaid insurance and licenses 2,415 755
Decrease in operating supplies 82 143
(Increase) decrease in other assets (140) 31
Increase in accounts payable and other accrued liabilities 1,194 1,693
Decrease in accrued wages and benefits (1,424) (907)
Other 4 -
----------- -----------
Net cash provided (used) by operating activities (448) 2,710
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchases of property and equipment (5,291) (4,314)
Proceeds from sales of property and equipment 1,086 1,002
----------- -----------
Net cash used in investing activities (4,205) (3,312)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under lines of credit 3,000 374
Payment of long-term debt (3,420) (4,379)
Borrowings under long-term debt 2,225 -
Decrease in other liabilities (736) (272)
----------- -----------
Net cash provided (used) in financing activities 1,069 (4,277)
----------- -----------
NET DECREASE IN CASH (3,584) (4,879)
Cash, beginning of period 4,378 6,367
----------- -----------
Cash, end of period $ 794 $ 1,488
----------- -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 1,514 $ 1,370
----------- -----------
Cash paid during the period for income taxes $ 142 $ 168
----------- -----------
</TABLE>
(See accompanying Notes to Consolidated Financial Statements)
7
<PAGE>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND OPERATIONS
U.S. Xpress Enterprises, Inc. ("Enterprises" or the "Company") is a holding
company which operates primarily through several wholly-owned subsidiaries: U.S.
Xpress, Inc. ("U.S. Xpress"), National Xpress Logistics, Inc. ("NXL"),
CSI/Crown, Inc. ("CSI/Crown") and Hall Systems, Inc. ("Hall Systems"). U.S.
Xpress is a time-definite truckload carrier providing service to the continental
48 states and Canada; NXL is a contract logistics management provider; CSI/Crown
is a freight consolidator to the floorcovering industry and Hall Systems is a
regional truckload carrier providing service to 14 states in the Southeast.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany transactions and accounts
have been eliminated.
PROPERTY AND EQUIPMENT
Depreciation and amortization of property and equipment is computed using
the straight-line method for financial reporting purposes and accelerated
methods for tax purposes over the estimated useful lives of the related assets
(net of salvage value) as follows:
Buildings........................................ 10-30 years
Revenue and service equipment...................... 3-7 years
Furniture and equipment............................ 3-7 years
Leasehold improvements............................. 5-6 years
Upon the retirement of property and equipment, the related asset cost and
accumulated depreciation are removed from the accounts and any gain or loss is
reflected in the Company's statement of operations, with the exception of gains
on trade-ins, which are included in the basis of the new asset.
INCOME TAXES
Income taxes are accounted for using the provisions of Statement of
Financial Accounting Standards No. 109 ("SFAS No. 109"), "Accounting for Income
Taxes". Under SFAS No. 109, deferred tax assets and liabilities are computed
based on the difference between the financial statement and income tax basis of
assets and liabilities using the enacted marginal tax rate. Deferred income tax
expenses or credits are based on the changes in the asset or liability from
period to period.
8
<PAGE>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
CONTRACT WAGES
The Company leases a substantial portion of its personnel, including
drivers, from an independent personnel leasing company. Under the lease
agreements, the Company pays a contracted amount per person and the personnel
leasing company has the responsibility for payroll, unemployment insurance and
workers' compensation claims.
EARNINGS PER SHARE
Earnings per share is computed based on the weighted average number of
common shares outstanding plus the dilutive effect of outstanding common stock
options.
RECLASSIFICATIONS
Certain reclassifications have been made in the fiscal 1996 financial
statements to conform with the fiscal 1997 presentation.
3. COMMITMENTS AND CONTINGENCIES
The Company is party to certain legal proceedings incidental to its
business. The ultimate disposition of these matters, in the opinion of
management, based in part on the advice of legal counsel, will not have a
material adverse effect on the Company's financial position or results of
operations.
The Company has letters of credit of $3,055,000 outstanding at June 30,
1996. The letters of credit are maintained primarily to support the Company's
insurance program.
4. REVOLVING LINE OF CREDIT AGREEMENT
The Company has an unsecured credit agreement (the "Credit Agreement") with
a group of banks. The Credit Agreement operates as a revolving credit facility
until November, 1997, at which time it will convert to a three year installment
loan, if not extended or renewed.
Borrowings (including letters of credit) under the Credit Agreement are
limited to the lesser of: (a) 90% of the book value of eligible revenue
equipment plus 85% of eligible accounts receivable; or (b) $50,000,000. At June
30, 1996, $12,464,000 was unused and available to the Company under the Credit
Agreement.
The Credit Agreement contains a number of covenants that limit, among other
9
<PAGE>
things, the payment of dividends, the incurrence of additional debt, and the
pledge of assets as security on other indebtedness. The Credit Agreement also
requires the Company to meet certain financial tests, including a minimum amount
of tangible net worth, a minimum fixed charge coverage and a maximum amount of
leverage. The Company was in compliance with these covenants during the period
ended June 30, 1996.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's operating subsidiaries each serve different transportation
service markets but utilize an integrated operating and marketing strategy.
U.S. Xpress serves the medium-to-long haul market segment. CSI/Crown offers
specialized transportation services, principally to the floorcovering industry.
Hall Systems serves the short-to-medium haul market segment in the southeastern
United States. NXL provides contract logistics management services.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the components
of the consolidated statements of income expressed as a percentage of operating
revenue:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
1996 1995
-------- --------
<S> <C> <C>
OPERATING REVENUE 100% 100%
-------- --------
OPERATING EXPENSES:
Salaries, wages and employee benefits, including contract wages 41.2 44.8
Fuel and fuel taxes 16.3 16.9
Vehicle rents 5.4 6.1
Depreciation and amortization 4.9 6.2
Purchased transportation 7.3 5.2
Operating expenses and supplies 7.0 7.5
Insurance premiums and claims 4.9 4.6
Operating taxes and licenses 1.7 1.9
Communications and utilities 1.8 1.7
Cost of installation supplies sold 2.5 -
Building rental 1.4 0.8
Bad debt expense 0.2 0.2
General and other operating expenses 3.0 2.8
Gain on sales of equipment (0.1) (0.2)
Equity in earnings of unconsolidated affiliate - (0.1)
-------- --------
Total operating expenses 97.5 98.4
-------- --------
INCOME FROM OPERATIONS 2.5 1.6
OTHER INCOME (EXPENSE):
Interest expense, net (1.5) (1.9)
Other income (expense), net - -
-------- --------
Total other expense (1.5) (1.9)
-------- --------
INCOME (LOSS) BEFORE INCOME TAX (PROVISION) BENEFIT 1.0 (0.3)
INCOME TAX (PROVISION) BENEFIT (0.4) 0.2
-------- --------
NET INCOME (LOSS) 0.6% (0.1)
======== ========
</TABLE>
11
<PAGE>
COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1996 TO THE
THREE MONTHS ENDED JUNE 30, 1995
Since early in calendar 1995, overcapacity in the truckload sector of the
transportation industry has contributed to soft freight demand, increased
competition and somewhat softer freight rates. As a result, the Company
experienced a decline in equipment utilization and average revenue per revenue
mile during fiscal 1996. These factors, combined with increased driver wages and
other costs resulted in an overall increase in the Company's operating expenses
as a percentage of operating revenue during fiscal 1996. In order to improve
its equipment utilization, the Company revised its fleet expansion plans in
order to reduce the growth rate of its tractor fleet. Management expects to
continue to limit the growth rate of the Company's tractor fleet until market
conditions improve.
In addition to revising its fleet expansion plans, the Company is
attempting to control costs through the consolidation of certain of its
operating subsidiaries and by refocusing the logistics operations. These
measures were designed to reduce back office personnel costs and further improve
equipment utilization. Crown and CSI/Reeves were merged on January 1, 1996 to
form one company operated as CSI/Crown. The Company merged U.S. Xpress and
Southwest Motor Freight, Inc. a former subsidiary, on April 1, 1996 to form one
company operated as U.S. Xpress. These mergers eliminated duplicate back
office activities previously performed at each of the companies. The operations
of NXL are being refocused to position that company as a high service, third
party provider of truckload and intermodal services. Further expansion into
additional logistics services are expected to be implemented only as the freight
transportation market strengthens.
The Company's continuing efforts to improve equipment utilization and to
reduce operating expenses as a percent of revenues had favorable results during
the first quarter of fiscal 1997 ended June 30, 1996. During the quarter ended
June 30, 1996, revenue per tractor per week increased 6.4% to $2,806, compared
to $2,638 in the same period in 1995. The Company's operating ratio declined to
97.5% during the three months ended June 30,1996, compared to 98.4% during the
same period in 1995.
Operating revenue during the three month period ended June 30, 1996
increased $22.8 million, or 35.0%, to $87.8 million, compared to $65.0 million
during the same period in 1995. This increase resulted primarily from the 1995
acquisitions of CSI/Reeves and Hall Systems, which combined contributed $17.6
million of the $22.8 million increase. The Company's U.S. Xpress unit
contributed $5.9 million to the increase. Increased U.S. Xpress revenues
resulted from increased revenue miles and slightly increased rates per revenue
mile.
Operating expenses represented 97.5% of operating revenue during the three
months ended June 30, 1996, compared to 98.4% during the same period in 1995.
12
<PAGE>
As a percentage of operating revenue, salaries, wages, and employee
benefits was 41.2% during the three months ended June 30, 1996, compared to
44.8% during the same period in 1995. This decrease is a result of salaries and
wages for both Hall Systems and CSI/Crown representing a lower percentage of
operating revenue than in the comparable prior year period due to the
utilization of owner-operators at Hall Systems and the utilization of outside
linehaul carriers at CSI/Crown. All owner-operator expenses and purchased
linehaul services are reflected as purchased transportation.
As a percentage of operating revenue, fuel and fuel taxes were 16.3% during
the three months ended June 30, 1996, compared to 16.9% during the same period
in 1995. This slight decrease results from a significant increase in fuel costs,
offset by the addition of non-transportation revenue from CSI/Crown, as a result
of the August 1995 acquisition of CSI/Reeves, the addition of owner-operator
revenue from Hall Systems and an increase in transportation revenue from
CSI/Crown. The Company's average price per gallon for fuel for the quarter
ended June 30, 1996 was $1.206, compared to $1.074 for the same period in 1995.
The effect of this 12.3% increase in the average price per gallon was to
increase fuel costs by approximately $1.4 million for the quarter ended June 30,
1996 over the same period in 1995. Non-transportation revenue from CSI/Crown
does not require Company expenditures for fuel and fuel taxes. The utilization
of owner-operators by Hall Systems and the purchase of outside transportation
services by CSI/Crown significantly reduced those companies expenditures for
fuel and fuel taxes. Excluding the above-mentioned increases in revenue, as a
percentage of operating revenue, fuel and fuel taxes would have been 19.0%
during the three months ended June 30, 1996.
As a percentage of operating revenue, vehicle rents were 5.4% during the
three months ended June 30, 1996, compared to 6.1% during the same period in
1995. Depreciation and amortization represented 4.9% of revenues during the
three months ended June 30, 1996, compared to 6.2% during the same period in
1995. Overall, as a percentage of operating revenue, vehicle rents and
depreciation were 10.3% during the three months ended June 30, 1996, compared to
12.3% during the same period in 1995. This overall decrease was primarily
attributable to increased non-transportation revenues from warehousing and the
sale of installation supplies, and an increase in transportation revenues from
Hall Systems and CSI/Crown. Revenues from warehousing and from the sale of
installation supplies do not require expenditures for revenue equipment.
Transportation revenues of CSI/Crown, which are served through the Company's
purchase of transportation from third parties, and of Hall Systems, which are
served by owner-operators, also do not require expenditures for revenue
equipment. Revenue from warehousing, the sale of installation supplies, Hall
Systems and CSI/Crown was $23.4 million during the three months ended June 30,
1996, compared to $5.8 million in the same period in 1995. Excluding the above-
mentioned increases in revenue, as a percentage of operating revenue, vehicle
rents and depreciation would have been 12.1% for the three months ended June 30,
1996.
As a percentage of operating revenue, purchased transportation was 7.3%
during the three months ended June 30, 1996, compared to 5.2% during the same
period in 1995.
13
<PAGE>
This increase resulted primarily from increased third party transportation
purchases by CSI/Crown and owner-operator expense from Hall Systems.
Cost of installation supplies sold during the three months ended June 30,
1996 were $2.2 million. This category reflects costs of carpet installation
supplies which are in turn sold through CSI/Crown retail outlets. There were no
sales of installation supplies prior to the August, 1995 acquisition of
CSI/Reeves.
As a percentage of operating revenue, building rental was 1.4% during the
three months ended June 30, 1996, compared to .8% during the same period in
1995. This increase was primarily attributable to building rental expenses
associated with the warehousing operations acquired in the August, 1995
acquisition of CSI/Reeves.
Income from operations for the three months ended June 30, 1996 increased
$1.1 million, or 100.0%, to $2.2 million from $1.1 million. As a percentage of
operating revenue, income from operations was 2.5% in 1996, compared to 1.6% in
1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity during the three months ended
June 30, 1996 were funds provided through borrowings under lines of credit and
long-term debt. In the remainder of fiscal 1997, the Company's primary sources
of liquidity are expected to be funds provided by operations and borrowings
under lines of credit and long-term debt. At June 30, 1996, the Company had in
place a $50 million line of credit with a bank, of which approximately $12.5
million was available for borrowing.
Cash used by operations was $448,000 during the first three months of
fiscal 1997, compared to $2.7 million provided by operations during the same
period of fiscal 1996. Net cash used in investment activities was $4.2 million
during the first three months of fiscal 1997, compared to $3.3 million during
the same period of fiscal 1996. Of the cash used in investment activities
during the first three months of fiscal 1997, $5.3 million was used for
purchases of property and equipment, and proceeds from the disposal of used
equipment was $1.1 million. During fiscal 1996, the Company expended
approximately $28.2 million for the purchase of property and equipment. Such
expenditures are expected to be approximately $18.0 million in fiscal 1997,
which includes $3.0 million for tractors, $12.0 million for trailers and $3.0
million for additions to properties and facilities. Disposals of used equipment
are expected to approximate $16.0 million. The decrease in amounts expected to
be expended for purchases of new equipment reflects the Company's lower fleet
expansion plans for fiscal 1997 and the expectation that the Company will lease
more revenue equipment under operating leases rather than purchase such
equipment.
Net cash provided in financing activities was $1.1 million during the first
three months of fiscal 1997, compared to $4.3 million used in financing
activities during the same period of fiscal 1996. Net borrowings under lines of
credit were $3.0 million during the first three months of fiscal 1997, compared
to net borrowings of $374,000 during the same period of fiscal 1996. Borrowings
under long-term debt during the first three months of
14
<PAGE>
fiscal 1997 were $2.2 million, compared to no borrowings during the same period
of fiscal 1996. Increased borrowings under lines of credit and long-term debt
resulted from the lower cash provided by operations. In fiscal 1996, cash from
operations was used in part to fund the purchases of property and equipment.
Management believes that funds provided by operations and from borrowings
under lines of credit and long term debt will be sufficient to fund its cash
needs and anticipated capital expenditures through at least the next twelve
months.
This Form 10-Q contains certain forward looking information that is
subject to certain risks and uncertainties that could cause actual results to
differ materially from those projected. Without limitation, these risks and
uncertainties include economic recessions or downturns in customers' business
cycles, excessive increases in capacity within the truckload markets, decreased
demand of transportation services offered by the Company, rapid fluctuations in
fuel pricing or availability, increases in interest rates, and the availability
of qualified drivers. Readers are urged to carefully review and consider the
various disclosures made by the Company in this Form 10-Q and in the Company's
Form 10-K for the year ended March 31, 1996.
15
<PAGE>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No reports on Form 8-K have been filed during the
quarter for which this report is filed.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
U.S. XPRESS ENTERPRISES, INC.
(REGISTRANT)
DATE: AUGUST 14, 1996 BY: /S/ PATRICK E. QUINN
--------------- ----------------------------
PATRICK E. QUINN
PRESIDENT
DATE: AUGUST 14, 1996 BY: /S/ LARRY D. BENTLEY
--------------- ----------------------------
LARRY D. BENTLEY
CHIEF FINANCIAL OFFICER
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 794
<SECURITIES> 0
<RECEIVABLES> 52,782
<ALLOWANCES> 2,945
<INVENTORY> 3,951
<CURRENT-ASSETS> 65,128
<PP&E> 147,454
<DEPRECIATION> 43,057
<TOTAL-ASSETS> 179,080
<CURRENT-LIABILITIES> 44,389
<BONDS> 63,080
0
0
<COMMON> 120
<OTHER-SE> 55,522
<TOTAL-LIABILITY-AND-EQUITY> 179,080
<SALES> 0
<TOTAL-REVENUES> 87,817
<CGS> 0
<TOTAL-COSTS> 85,368
<OTHER-EXPENSES> (7)
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<INTEREST-EXPENSE> 1,352
<INCOME-PRETAX> 896
<INCOME-TAX> 344
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 552
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
