US XPRESS ENTERPRISES INC, S-1/A, 1997-08-18

US XPRESS ENTERPRISES INC
S-1/A, 1997-08-18
TRUCKING (NO LOCAL)

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 18, 1997
REGISTRATION NO. 333-31063

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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U.S. XPRESS ENTERPRISES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

NEVADA 4213 62-1378182
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)

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2931 SOUTH MARKET STREET
CHATTANOOGA, TENNESSEE 37410
(423) 697-7377
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

----------------

RAY M. HARLIN
CHIEF FINANCIAL OFFICER
U.S. XPRESS ENTERPRISES, INC.
2931 SOUTH MARKET STREET
CHATTANOOGA, TENNESSEE 37410
(423) 697-7377
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

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COPIES TO:
A. ALEXANDER TAYLOR, II, ESQ. RICHARD C. TILGHMAN, JR., ESQ.
MILLER & MARTIN PIPER & MARBURY L.L.P.
1000 VOLUNTEER BUILDING 36 SOUTH CHARLES STREET
CHATTANOOGA, TENNESSEE 37402 BALTIMORE, MARYLAND 21201
(423) 756-6600 (410) 539-2530

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_] _____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering: [_] __________________________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
----------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION AND AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE +
+WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES +
+LAWS OF ANY SUCH JURISDICTION. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION

AUGUST 18, 1997

3,400,000 Shares

LOGO
OF U.S. XPRESS ENTERPRISES, INC. APPEARS HERE
Class A Common Stock

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Of the 3,400,000 shares of Class A Common Stock offered hereby, 2,500,000
shares are being sold by U.S. Xpress Enterprises, Inc. (the "Company") and
900,000 shares are being sold by certain of the Company's stockholders (the
"Selling Stockholders"). See "Principal and Selling Stockholders." The Company
will not receive any proceeds from the sale of the Class A Common Stock by the
Selling Stockholders. The Company's Class A Common Stock is traded on The
Nasdaq National Market under the symbol "XPRSA." On August 15, 1997, the last
reported sale price of the Company's Class A Common Stock, as reported by The
Nasdaq National Market, was $19.50 per share.

The Class A Common Stock offered hereby is entitled to one vote per share,
while the Class B Common Stock is entitled to two votes per share so long as it
is held by its existing holders or certain members of their immediate families.
The rights of the holders of the Class A and Class B Common Stock are otherwise
identical. See "Description of Capital Stock." Upon completion of the offering,
the holders of the Company's Class B Common Stock will control approximately
60.6% of the total voting stock of the Company. See "Risk Factors--Voting
Rights of Class A and Class B Common Stock; Voting Control of Principal
Stockholders."

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SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
CLASS A COMMON STOCK OFFERED HEREBY.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

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<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS PROCEEDS TO
TO DISCOUNTS AND TO SELLING
PUBLIC COMMISSIONS COMPANY(1) STOCKHOLDERS
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<S> <C> <C> <C> <C>
Per Share........................ $ $ $ $
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Total(2)......................... $ $ $ $
</TABLE>
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(1) Before deducting estimated expenses of $250,000 payable by the Company.
(2) The Company and certain of the Selling Stockholders have granted the
Underwriters a 30-day option to purchase up to 510,000 additional shares of
Class A Common Stock solely to cover over-allotments, if any. To the extent
that the option is exercised, the Underwriters will offer the additional
shares to the public at the Price to Public shown above. If the option is
exercised in full, the Price to Public, Underwriting Discounts and
Commissions, Proceeds to Company and Proceeds to Selling Stockholders will
be $ , $ , $ and $ , respectively. See "Underwriting."

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The shares of Class A Common Stock are offered by the several Underwriters,
subject to prior sale, when, as and if delivered to and accepted by them, and
subject to the right of the Underwriters to reject any order in whole or in
part. It is expected that delivery of the shares will be made at the offices of
Alex. Brown & Sons Incorporated, Baltimore, Maryland, on or about , 1997.

Alex. Brown & Sons
INCORPORATED
Morgan Stanley Dean Witter
Schroder & Co. Inc.
Morgan Keegan & Company, Inc.

THE DATE OF THIS PROSPECTUS IS AUGUST , 1997

<PAGE>

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission ("the
Commission") a Registration Statement on Form S-1 (together with all
amendments and exhibits thereto, the "Registration Statement") under the
Securities Act of 1933 with respect to the Common Stock offered hereby. This
Prospectus, which constitutes part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and the Common Stock, reference is made to the Registration Statement
and the exhibits and schedules filed as a part thereof. Statements made in
this Prospectus as to the contents of any contract, agreement or other
document are not necessarily complete, and, in each instance, reference is
made to the copy of such contract, agreement or document. The Registration
Statement and the exhibits thereto filed by the Company with the Commission
may be inspected and copies may be obtained (at prescribed rates) at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549 and at the Commission's Regional
Offices located at Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New
York, New York 10048 and at the website maintained by the Commission at
http://www.sec.gov.

Statements made in this Prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.

The Company is subject to the information requirements of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Commission. These reports, proxy statements and other information also are
available from the Commission's public reference facilities and its website.
So long as the Company is subject to periodic reporting requirements of the
Exchange Act, it will continue to furnish the reports, proxy statements and
other information required thereby to the Commission. The Company furnishes
its shareholders annual reports containing financial statements audited by its
independent auditors and quarterly reports for the first three quarters of
each fiscal year containing unaudited financial information.

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CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE COMMON
STOCK OFFERING AND PURCHASE COMMON STOCK TO COVER SYNDICATE SHORT POSITIONS.
FOR A DESCRIPTION OF THE ACTIVITIES, SEE "UNDERWRITING."

IN CONNECTION WITH THIS OFFERING, CERTAIN PERSONS PARTICIPATING IN THIS
OFFERING MAY ENGAGE IN PASSING MARKET MAKING TRANSACTIONS IN THE COMMON STOCK
ON NASDAQ IN ACCORDANCE WITH RULE 103 OF REGULATION M OF THE SECURITIES AND
EXCHANGE COMMISSION. SEE "UNDERWRITING."

2
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements, including the notes
thereto, appearing elsewhere in this Prospectus. Unless otherwise indicated,
all information in this Prospectus assumes no exercise of the Underwriters'
over-allotment option. Unless the context otherwise requires, references in
this Prospectus to the "Company" refer to U.S. Xpress Enterprises, Inc. and
each of its consolidated subsidiaries.

THE COMPANY

U.S. Xpress Enterprises, Inc. (the "Company") is one of the ten largest
truckload carriers in the United States. The Company provides transportation
and logistics services throughout the United States and in parts of Canada and
Mexico, specializing in time-definite and expedited longhaul and regional
truckload services. The Company is a leader in the adoption of proven new
technologies as a means of reducing costs and providing better service. The
Company has two operating subsidiaries, U.S. Xpress, Inc. ("U.S. Xpress") and
CSI/Crown, Inc. ("CSI/Crown"). U.S. Xpress, which accounted for 82% of the
Company's fiscal 1997 revenues, provides time-definite and expedited longhaul
and regional truckload services as well as transportation and logistics
services to the air freight industry. CSI/Crown is a leader in providing
logistics services to manufacturers and retailers in the floorcovering
industry. The Company's top 50 customers include Federal Express, Carrier,
Amana, Hewlett Packard, DuPont, Compaq and Armstrong, each of which has
designated the Company as a core carrier. Generally, core carriers are
suppliers with which shippers have established strategic alliances for a broad
range of transportation services.

The Company has increased its revenues at a compounded annual growth rate of
18.2% over the past five fiscal years to $363 million for fiscal 1997 through
the expansion of business from existing customers, the development of
relationships with new customers and strategic acquisitions. The Company's
strategy for future revenue growth is to continue to establish strategic
alliances with its top customers, target high-service market segments, make
strategic acquisitions and leverage its technological advantage. The Company
also seeks to sustain growth through programs designed to recruit and retain
quality drivers for its expanding fleet.

In addition to its focus on internal growth, the Company maintains an active
acquisition program. Competitive pressures within the truckload industry and
high levels of service demanded by customers require today's carriers to
demonstrate financial stability, critical mass and technological capabilities.
Carriers that do not possess these characteristics have begun to exit the
truckload industry through liquidation or through continued industry
consolidation. The Company has capitalized on this industry consolidation by
successfully making strategic acquisitions focusing on high-service providers,
air freight service providers and regional carriers in specific geographic
areas. Since 1990, the Company has completed the following key acquisitions:

. JTI, Inc. ("JTI"), a Midwest regional truckload carrier, in May 1997;

. the Midwest and East Coast floorcovering and logistics operations of
Rosedale Transport, Inc. ("Rosedale"), in April 1997;

. the West Coast air freight service operations of Michael Lima
Transportation, in July 1996;

. CSI/Reeves, Inc. ("CSI/Reeves"), a floorcovering logistics provider, in
August 1995;

. Hall Systems, Inc. ("Hall Systems"), a Southeast regional truckload
carrier, completed in October 1995; and

. Southwest Motor Freight, Inc. ("Southwest"), a medium and longhaul
truckload carrier, in November 1990.

3
<PAGE>

The Company has initiated a strategy to enhance profitability and sustain
growth by improving efficiency, reducing costs and introducing technologies to
improve service. The Company realigned its operations into two subsidiaries to
combine various operating, marketing, maintenance and administrative functions,
thereby reducing costs and improving equipment utilization. The Company has
improved the predictability of and reduced costs by eliminating five
maintenance facilities and outsourcing some maintenance activities, revising
insurance programs, modifying its revenue equipment acquisition strategy and
improving fuel economy. These initiatives increased profitability in fiscal
1997, and management believes that these strategies will have a more
significant effect on results of operations in the future.

The Company is a leader in the innovation and adoption of proven new
technologies as a means of reducing costs and enhancing customer service. For
example, the newly-introduced Xpress Connect(TM) Internet connection, a fully
integrated customer-to-truck communications system, enables customers to trace
freight, tender loads and exchange invoice information via the Internet as well
as communicate with the Company via e-mail.

The Company was incorporated in Nevada in 1989. The Company's principal
offices are located at 2931 South Market Street, Chattanooga, Tennessee 37410;
and its telephone number is (423) 697-7377. Internet: www.usxpress.com.

THE OFFERING

Class A Common Stock offered by the Company .....
2,500,000 shares

Class A Common Stock offered by the Selling
Stockholders ...................................
900,000 shares

Common Stock to be outstanding after the
offering:
Class A Common Stock .......................... 11,587,007 shares(1)

Class B Common Stock .......................... 3,040,262 shares

Total ....................................... 14,627,269 shares(1)

Use of proceeds ................................. To acquire revenue
equipment currently leased
by the Company and reduce
indebtedness.

Nasdaq National Market symbol ................... XPRSA
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(1) Excludes currently outstanding options to acquire 217,676 shares of Class A
Common Stock, at a weighted average exercise price of $8.59 per share. See
"Management--Stock Incentive Plan."

4
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED MARCH 31, ENDED JUNE 30,
-------------------------------------------- ---------------
1993 1994 1995 1996 1997 1996 1997
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<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(1):
Operating revenue:
U.S. Xpress.......... $164,856 $191,403 $230,416 $251,880 $296,974 $70,259 $87,162
CSI/Crown............ 21,288 24,001 23,915 47,817 65,845 17,558 20,771
-------- -------- -------- -------- -------- ------- -------
Consolidated........ 186,144 215,404 254,331 299,697 362,819 87,817 107,933
Income from
operations........... 7,790 14,095 18,159 5,251 19,716 2,241 8,035
Income before taxes... 3,313 9,714 13,557 75 14,236 896 6,464
Net income............ 1,867 6,042 8,263 94 7,878 552 3,879
Net income per share.. .19 .63 .76 .01 .65 .05 .32
Weighted average
number of shares
outstanding.......... 9,665 9,665 10,806 12,003 12,168 12,135 12,221
TRUCKLOAD OPERATING
DATA:
Total revenue miles
(in thousands)....... 160,664 180,609 204,804 222,496 261,596 61,222 75,313
Average revenue per
mile................. $ 1.08 $ 1.09 $ 1.14 $ 1.14 $ 1.15 $ 1.16 $ 1.15
Tractors (at end of
period).............. 1,323 1,504 1,721 1,975 2,246 2,012 2,573
Trailers (at end of
period).............. 2,507 2,394 3,643 4,396 5,520 4,732 5,824
Average revenue per
tractor per week..... $ 2,795 $ 2,796 $ 2,807 $ 2,646 $ 2,761 $ 2,747 $ 2,744
Total loads........... 109,898 123,261 142,742 185,565 254,214 58,818 74,270
Average tractors
during year.......... 1,209 1,414 1,613 1,848 2,111 1,994 2,410
Tractor miles......... 169,147 190,098 216,581 239,599 282,985 66,359 82,279
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1997
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ACTUAL AS ADJUSTED(2)
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<S> <C> <C>
BALANCE SHEET DATA:
Working capital....................................... $ 38,725 $ 38,725
Total assets.......................................... 198,587 238,587
Long-term debt, net of current portion................ 73,067 68,786
Stockholders' equity.................................. 67,211 111,492
</TABLE>
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(1) Includes the results of operations of the following acquired businesses
from dates of acquisition: JTI from May 1997, acquired operations of
Rosedale from April 1997, the air freight service operations of Michael
Lima Transportation from July 1996 and CSI/Reeves from August 1995. The
Company's 50% acquisition of Hall Systems in March 1994 was accounted for
under the equity method until the remaining 50% of Hall Systems was
acquired in October 1995.
(2) Adjusted to give effect to the sale of the 2,500,000 shares of Class A
Common Stock offered by the Company hereby at an assumed public offering
price of $18.75 per share and application of the estimated net proceeds
therefrom as described in "Use of Proceeds."

5
<PAGE>

RISK FACTORS

In addition to the other information contained in this Prospectus, the
following factors should be carefully considered in evaluating an investment
in the shares of Class A Common Stock offered hereby.

ECONOMIC FACTORS

The trucking industry has historically been highly cyclical as a result of
various economic factors, such as excess capacity in the industry, the
availability of qualified drivers, changes in fuel prices and the supply of
fuel, increases in fuel or energy taxes, interest rate fluctuations, insurance
costs, fluctuations in the resale value of revenue equipment, economic
recessions and downturns in customers' business cycles and shipping
requirements. The Company has little or no control over these economic
factors. Significant increases or rapid fluctuations in fuel or other
operating costs and interest rates, to the extent not offset by increases in
freight rates, would reduce the Company's profitability. Economic recessions
or downturns in customers' business cycles also could have a materially
adverse effect on the operating results of the Company. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

AVAILABILITY OF DRIVERS

Competition for drivers is intense within the trucking industry, and the
Company periodically experiences difficulties in attracting and retaining
qualified drivers. There can be no assurance that the Company's operations
will not be affected by a shortage of qualified drivers in the future which
could result in temporary under-utilization of revenue equipment, difficulty
in meeting shipper demands and increased compensation levels for drivers.
Difficulty in attracting or retaining qualified drivers could require the
Company to limit its growth and could have a materially adverse effect on the
Company's operations. See "Business--Drivers."

COMPETITION

The trucking industry is highly competitive and fragmented and includes
numerous regional, inter-regional and national truckload carriers, none of
which dominates the market. The Company also competes with logistics providers
and alternative forms of surface transportation, such as intermodal
transportation, railroads and air freight carriers, particularly in the longer
haul segments of its business. Historically, this competition has created
downward pressure on the truckload industry's pricing structure. Competition
for the freight transported by the Company is based on service, efficiency,
the ability to meet shipping deadlines and freight rates. Prolonged weakness
in the freight markets or downward pressure on freight rates could adversely
affect the Company's results of operations or financial condition. Some
truckload carriers and many railroad companies do have greater financial
resources, operate more equipment and transport more freight than the Company.
See "Business--Competition."

RISKS RELATED TO COMPANY'S GROWTH STRATEGY

The Company's growth strategy includes the acquisition and deployment of
additional revenue equipment and the expansion and development of its national
operations and of its regional operations beyond the Midwestern, Western and
Southeastern United States. These expanded operations will require the
commitment of additional revenue equipment and personnel, as well as
management resources, for future development.

The Company's strategy for continued growth also includes the continued
acquisition of small and medium-sized transportation companies. The Company
will face competition from various transportation companies or other third
parties for future acquisition opportunities. There can be no assurance that
the Company can successfully acquire additional companies in the future. Any
future acquisitions by the Company are likely to result in additional debt and
amortization of goodwill and intangible assets, which

6
<PAGE>

could adversely affect the Company's profitability, or could involve the
potentially dilutive issuance of additional equity securities. In addition,
acquisitions involve numerous risks, including difficulties in assimilating
the acquired company's operations, the diversion of management's attention
from other business concerns, risks of entering markets in which the Company
has little or no direct experience and the potential loss of customers, key
employees and drivers of the acquired company, any of which could have a
materially adverse effect on the Company's business and operating results. The
Company does not have any commitments with respect to any acquisitions as of
the date of this Prospectus. See "Business--Strategy."

SEASONALITY

In the trucking industry, revenue generally shows a seasonal pattern as
customers reduce shipments during and after the winter holiday season and its
inherent weather variations. While the Company has reduced the seasonality of
its business by obtaining new customers with more balanced shipping patterns,
the Company's operating expenses have historically been higher in the winter
months, due primarily to decreased fuel efficiency and increased maintenance
costs for revenue equipment in colder weather. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Seasonality."

ACQUISITION OF REVENUE EQUIPMENT

The Company's growth is dependent, in part, on its ability to acquire and
deploy additional revenue equipment on a timely basis. Delays in the
availability of equipment could occur due to a number of factors beyond the
Company's control, including equipment and supply shortages and work stoppages
at the equipment supplier. Any delay or interruption in the availability of
equipment in the future could have a materially adverse effect on the
Company's operations and could force it to curtail its plans for growth.
Currently, Freightliner and Wabash supply all of the Company's requirements
for tractors and trailers, respectively. See "Business--Equipment."

CAPITAL REQUIREMENTS

The trucking industry is capital intensive. The Company depends on operating
leases, lines of credit, secured equipment financing and cash flows from
operations to finance the expansion and maintenance of its modern and cost-
efficient revenue equipment and facilities. If the Company were unable in the
future to enter into acceptable operating or capital lease arrangements, raise
additional equity or borrow sufficient funds, it would be forced to limit its
growth and operate its revenue equipment for longer periods, which could
adversely affect the Company's operating results. See "Use of Proceeds" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

FUEL

Fuel is one of the Company's largest operating expenses. Fuel prices tend to
fluctuate, and the Company hedges against such fluctuations only on a limited
basis. Any increase in fuel taxes or in fuel prices, to the extent not offset
by freight rate increases or fuel surcharges to customers, or any interruption
in the supply of fuel, could have a materially adverse effect on the Company's
operating results because the Company bears the risk of changes in operating
costs. Generally, the Company has historically been able to offset significant
increases in fuel prices through fuel surcharges to its customers, but there
can be no assurance that the Company will be able to do so in the future. More
than half of the Company's business volume provides for fuel surcharges at
negotiated levels.

REGULATION

The Company is regulated by the United States Department of Transportation
("DOT") and by various state agencies. These regulatory authorities exercise
broad powers, generally governing activities such as authorization to engage
in motor carrier operations, rates and charges, operations, safety, financial
reporting, and certain mergers, consolidations and acquisitions. The trucking
industry is subject to possible regulatory and legislative changes (such as
increasingly stringent environmental regulations or limits on vehicle weight
and size) that may affect the economics of the industry by requiring changes
in operating practices or by affecting the cost of providing truckload
services. In addition, the Company's operations are subject to various
environmental laws and regulations dealing with underground fuel storage
tanks, the transportation and handling of hazardous materials and discharge of
stormwater. If the

7
<PAGE>

Company were to be involved in a spill or accident involving hazardous
substances or if the Company were found to be in violation of applicable laws
or regulations, the Company's business and operating results could be
materially adversely affected. See "Business--Regulation."

DEPENDENCE ON CERTAIN CUSTOMERS

For the fiscal year ended March 31, 1997, the Company's 25, 10 and 5 largest
customers accounted for 35.4%, 21.9% and 14.1% of revenues, respectively. The
Company does not have long-term contractual relationships with its customers,
and there can be no assurance that the Company's relationships with its
largest customers will continue. A reduction in or termination of services
provided by the Company to one or more large customers could have a materially
adverse effect on the Company's business and operating results. See
"Business--Marketing and Customers."

CLAIMS EXPOSURE; INSURANCE

Prior to December 31, 1996, the Company was self-insured for personal injury
and property damage in the amount of $500,000 per occurrence and could become
subject to one or more as yet unasserted claims as a result of accidents which
occurred prior to that date, which, if decided adversely to the Company, could
have a materially adverse effect on the Company's operating results. The
Company's effective insurance costs also could increase significantly as a
result of adverse claims experience or as a result of general increases in
insurance premiums. See "Business--Legal Proceedings."

DEPENDENCE ON MANAGEMENT

The success of the Company is highly dependent on the continued services of
the Company's senior management team, particularly Max L. Fuller and Patrick
E. Quinn, the Company's Co-Chairmen of the Board, neither of whom has an
employment agreement with the Company. The loss of either or both of their
services could have a materially adverse effect on the Company. In addition,
the Company's continued growth depends on its ability to attract and retain
skilled management and other employees. There can be no assurance that the
Company will be able to attract and retain additional qualified management or
other employees in the future. See "Management."

VOTING RIGHTS OF CLASS A AND CLASS B COMMON STOCK; VOTING CONTROL BY PRINCIPAL
STOCKHOLDERS

The voting rights of the Class A Common Stock are limited by the Company's
Amended and Restated Articles of Incorporation ("Restated Articles"). On all
matters with respect to which the Company's stockholders have a right to vote,
including the election of directors, each share of Class A Common Stock is
entitled to one vote, while each share of Class B Common Stock is entitled to
two votes. Except as otherwise required by law or expressly provided in the
Restated Articles, the Class A Common Stock and Class B Common Stock vote
together as a single class. Class B Common Stock can be converted into shares
of Class A Common Stock on a share-for-share basis at the election of the
holder and will be automatically converted to shares of Class A Common Stock
upon transfer, except certain transfers among existing holders of Class B
Common Stock and their respective immediate family members. See "Description
of Capital Stock."

Upon completion of this offering, Messrs. Fuller and Quinn will own
approximately 39.9% of the outstanding shares of Class A Common Stock and all
of the outstanding shares of Class B Common Stock, which together will
represent approximately 60.6% of the total voting power of both classes of
Common Stock. As long as Messrs. Fuller and Quinn control a majority of the
voting stock of the Company, they will be able, acting together, to elect the
entire Board of Directors of the Company and to determine the outcome of all
matters involving a stockholder vote. See "Principal and Selling Stockholders"
and "Description of Capital Stock."

8
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Sales of a substantial number of shares of the Class A Common Stock or their
availability for sale in the public market following this offering may have an
adverse effect on prevailing market prices for the Class A Common Stock.
Following this offering, the 3,400,000 shares offered hereby and the 3,335,000
shares sold in the Company's initial public offering will be freely tradeable
unless acquired by affiliates of the Company. The Selling Stockholders, who
after giving effect to this offering will beneficially own 8,059,735 shares of
the Company's outstanding Class A and Class B Common Stock, along with the
Company and its officers and directors as well as certain other principal
stockholders have agreed with the Underwriters that they will not sell, offer
or otherwise dispose of any of their shares for 90 days from the date of this
offering without the prior consent of Alex. Brown & Sons Incorporated. After
this 90-day period, all of such shares will be eligible for sale under,
subject to the limitations of Rule 144 under the Securities Act of 1933, as
amended (the "Securities Act"). See "Shares Eligible for Future Sale."

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements relating to future
events or the future financial performance of the Company. Such forward-
looking statements are within the meaning of that term in Section 27A of the
Securities Act and Section 21E of the Exchange Act. Such statements may
include, but not be limited to, projections of revenues, income or loss,
capital expenditures, acquisitions, plans for growth and future operations,
financing needs or plans or intentions relating to acquisitions by the
Company, as well as assumptions relating to the foregoing. Forward-looking
statements are inherently subject to risks and uncertainties, some of which
cannot be predicted or quantified. Future events and actual results could
differ materially from those set forth in, contemplated by or underlying the
forward-looking statements.

9
<PAGE>

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the
2,500,000 shares of Class A Common Stock offered by the Company are estimated
to be $44.3 million ($52.2 million if the Underwriters' over-allotment option
is exercised in full), assuming a public offering price of $18.75 per share,
after deduction of underwriting discounts and commissions and estimated
offering expenses payable by the Company.

Approximately $40 million of the net proceeds will be used to acquire
revenue equipment leased by the Company under operating leases with current
aggregate monthly lease payments of approximately $787,000. The balance of the
net proceeds will be used to pay installment notes that have a weighted
average interest rate of 8.53% and maturities ranging from March 1998 to
January 1999.

The Company will not receive any proceeds from the sale of shares of Class A
Common Stock by the Selling Stockholders.

PRICE RANGE OF COMMON STOCK

The Company's Common Stock is traded on The Nasdaq National Market under the
symbol "XPRSA." The following table sets forth, for the periods indicated, the
high and low last sale prices for the Class A Common Stock, as reported by The
Nasdaq National Market:

<TABLE>
<CAPTION>
HIGH LOW
------ -----
<S> <C> <C>
FISCAL 1996:
First quarter............................................. $11.13 $8.125
Second quarter............................................ 11.13 7.00
Third quarter............................................. 9.50 6.75
Fourth quarter............................................ 8.75 6.63
FISCAL 1997:
First quarter............................................. 8.50 6.63
Second quarter............................................ 9.75 5.75
Third quarter............................................. 16.13 8.50
Fourth quarter............................................ 17.75 12.25
FISCAL 1998:
First quarter............................................. 20.25 14.38
Second quarter (through August 15)........................ 21.00 18.00
</TABLE>

As of August 15, 1997, there were 9,087,007 shares of the Class A Common
Stock outstanding, which were held by approximately 165 stockholders of
record.

10
<PAGE>

CAPITALIZATION

The following table sets forth the current maturities of long-term debt and
the capitalization of the Company as of June 30, 1997, and as adjusted for the
sale of the 2,500,000 shares of the Class A Common Stock offered hereby by the
Company (assuming a public offering price of $18.75 per share) and application
of the estimated net proceeds therefrom as set forth in "Use of Proceeds."

<TABLE>
<CAPTION>
JUNE 30, 1997
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Current maturities of long-term debt..................... $ 12,666 $ 12,666
======== ========
Long-term debt, net of current maturities................ $ 73,067 $ 68,786
-------- --------
Stockholders' equity:
Preferred stock, $0.01 par value 2,000,000 shares
authorized; no shares issued and outstanding.......... -- --
Common stock, Class A $0.01 par value, 30,000,000
shares authorized; 9,046,044 shares issued and
outstanding, actual; 11,546,174 shares issued and
outstanding, as adjusted(1)........................... 90 115
Common stock, Class B $0.01 par value, 7,500,000 shares
authorized; 3,040,262 shares issued and outstanding,
actual and as adjusted................................ 30 30
Additional paid-in capital............................. 34,002 78,258
Retained earnings...................................... 33,322 33,322
Notes receivable from stockholders(2).................. (233) (233)
-------- --------
Total stockholders' equity........................... 67,211 111,492
-------- --------
Total capitalization............................... $140,278 $180,278
======== ========
</TABLE>
- --------

(1) Excludes currently outstanding options to acquire 217,676 shares of Class
A Common Stock at a weighted average price of $8.59 per share. See
"Management--Stock Incentive Plan."
(2) Represents notes payable to the Company for the purchase of restricted
stock on November 30, 1993 by certain key employees of the Company. See
"Management--Stock Incentive Plan."

DIVIDEND POLICY

The Company has never paid cash dividends on its Class A or Class B Common
Stock and does not intend to pay cash dividends on its Common Stock for the
foreseeable future. The declaration and payment of any future cash dividends
will be determined by the Company's Board of Directors, based on the Company's
results of operations, financial condition, cash requirements, certain
corporate law restrictions, restrictions under loan agreements and other
factors deemed relevant.

11
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

The selected consolidated financial data presented below for the past five
fiscal years have been derived from the Company's Consolidated Financial
Statements, which have been audited by Arthur Andersen LLP, independent public
accountants. The financial data for the three months ended June 30, 1996 and
1997 were derived from unaudited consolidated financial statements of the
Company, which, in the opinion of management, include all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation of the financial condition and results of operations of the
Company for those periods. The selected consolidated financial data should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Consolidated Financial Statements
and Notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED MARCH 31, ENDED JUNE 30,
-------------------------------------------- -----------------
1993 1994 1995 1996 1997 1996 1997
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(1):
Operating revenue:
U.S. Xpress.......... $164,856 $191,403 $230,416 $251,880 $296,974 $ 70,259 $ 87,162
CSI/Crown............ 21,288 24,001 23,915 47,817 65,845 17,558 20,771
-------- -------- -------- -------- -------- -------- --------
Consolidated........ 186,144 215,404 254,331 299,697 362,819 87,817 107,933
Income from
operations........... 7,790 14,095 18,159 5,251 19,716 2,241 8,035
Income before taxes... 3,313 9,714 13,557 75 14,236 896 6,464
Net income............ 1,867 6,042 8,263 94 7,878 552 3,879
Net income per share.. .19 .63 .76 .01 .65 .05 .32
Weighted average
number of shares
outstanding.......... 9,665 9,665 10,806 12,003 12,168 12,135 12,221
TRUCKLOAD OPERATING DATA:
Total revenue miles
(in thousands)....... 160,664 180,609 204,804 222,496 261,596 61,222 75,313
Average revenue per
mile................. $ 1.08 $ 1.09 $ 1.14 $ 1.14 $ 1.15 $ 1.16 $ 1.15
Tractors (at end of
period).............. 1,323 1,504 1,721 1,975 2,246 2,012 2,573
Trailers (at end of
period).............. 2,507 2,394 3,643 4,396 5,520 4,732 5,824
Average revenue per
tractor per week..... $ 2,795 $ 2,796 $ 2,807 $ 2,646 $ 2,761 $ 2,747 $ 2,744
Total loads........... 109,898 123,261 142,742 185,565 254,214 58,818 74,270
Average tractors
during year.......... 1,209 1,414 1,613 1,848 2,111 1,994 2,410
Tractor miles......... 169,147 190,098 216,581 239,599 282,985 66,359 82,279
BALANCE SHEET DATA:
Working capital....... $ 8,611 $ 2,636 $ 10,786 $ 19,606 $ 33,829 $ 20,739 $ 38,725
Total assets.......... 89,412 103,385 146,070 177,821 178,084 179,080 198,587
Long-term debt, net of
current maturities... 51,628 49,871 46,157 61,789 59,318 63,080 73,067
Stockholders' equity.. 7,394 13,436 54,082 55,086 63,162 55,642 67,211
</TABLE>
- --------
(1) Includes the results of operations of the following acquired businesses
from dates of acquisition: JTI from May 1997, acquired operations of
Rosedale from April 1997, the air freight service operations of Michael
Lima Transportation from July 1996 and CSI/Reeves from August 1995. The
Company's 50% acquisition of Hall Systems in March 1994 was accounted for
under the equity method until the remaining 50% of Hall Systems was
acquired in October 1995.

12
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

The Company has initiated a strategy to enhance profitability and sustain
growth by improving efficiency, reducing costs and introducing technologies to
improve service. During fiscal 1997 the Company significantly improved
operating results. Operating revenue for fiscal 1997 was $363 million, up from
$300 million in fiscal 1996. Operating income was $19.7 million, compared to
$5.2 million in fiscal 1996. Net income for fiscal 1997 was $7.9 million
compared to $94,000 in fiscal 1996. Principal reasons for the Company's
improved performance include:

. the realignment of operations into two subsidiaries to combine various
operating, marketing, maintenance and administrative functions to
improve operating efficiencies, reduce costs, improve customer service
and increase equipment utilization;

. the reduction and increased predictability of costs by eliminating five
maintenance facilities and outsourcing some maintenance activities,
revising insurance programs, changing the Company's revenue equipment
acquisition strategy and improving fuel economy;

. the improvement of customer service and equipment utilization through a
new bonus system that rewards operations personnel for exceeding
equipment utilization and customer and driver satisfaction goals;

. an increase in the Company's market share in its target markets of
expedited freight, regional freight, services to third party logistics
providers, dedicated fleets and floorcovering logistics; and

. a reduction in the seasonality of the Company's business by obtaining
new customers with more predictable shipping patterns.

These initiatives increased profitability in fiscal 1997, and management
believes that these strategies will have a more significant effect on results
of operations in the future.

The acquisition of CSI/Reeves in August 1995 has resulted in a change in the
Company's revenue mix and associated costs by increasing non-transportation
revenues and costs. For example, the revenue and operating costs associated
with the sale of installation supplies and the warehousing of floorcoverings
by CSI/Crown affects the comparability of the Company's year-to-year results
of operations as well as the comparability of the Company with other truckload
carriers.

13
<PAGE>

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the components of
the consolidated statements of operations expressed as a percentage of
consolidated operating revenue:

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
MARCH 31, JUNE 30,
---------------- ------------------
1995 1996 1997 1996 1997
---- ---- ---- --------- ---------
<S> <C> <C> <C> <C> <C>
Operating revenue...................... 100% 100% 100% 100% 100%
Operating expenses:
Salaries, wages and employee
benefits, including contract wages.. 42.5 43.0 41.0 41.2 40.6
Fuel and fuel taxes.................. 16.8 16.3 16.9 16.3 15.3
Vehicle rents........................ 6.6 5.8 6.0 5.4 6.7
Depreciation and amortization........ 5.9 5.6 4.0 4.9 2.9
Purchased transportation............. 4.1 6.6 6.3 7.3 8.2
Operating expenses and supplies...... 6.8 7.1 6.3 7.0 6.4
Insurance premiums and claims........ 4.2 4.3 4.2 4.9 3.3
Operating taxes and licenses......... 1.8 1.7 1.6 1.7 1.6
Communications and utilities......... 1.7 1.8 1.7 1.8 1.7
Cost of installation supplies sold... -- 1.7 2.3 2.5 1.7
Building rental...................... 0.8 1.2 1.3 1.4 1.3
Bad debt expense..................... 0.2 0.3 0.2 0.2 0.3
General and other operating
expenses............................ 2.7 3.2 3.2 3.0 3.2
Gain on sales of equipment........... (1.1) (0.4) (0.4) (0.1) (0.6)
Equity in earnings of unconsolidated
affiliate........................... (0.1) -- -- -- --
---- ---- ---- --------- ---------
Total operating expenses........... 92.9 98.2 94.6 97.5 92.6
---- ---- ---- --------- ---------
Income from operations................. 7.1 1.8 5.4 2.5 7.4
Interest and other income (expense),
net................................... (1.8) (1.8) (1.5) (1.5) (1.4)
---- ---- ---- --------- ---------
Income before income tax provision..... 5.3 -- 3.9 1.0 6.0
Income tax provision................... (2.1) -- (1.7) (0.4) (2.4)
---- ---- ---- --------- ---------
Net income............................. 3.2% -- 2.2% 0.6% 3.6%
==== ==== ==== ========= =========
</TABLE>

COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1997 TO THE THREE MONTHS ENDED
JUNE 30, 1996

Operating revenue during the three month period ended June 30, 1997
increased $20.1 million, or 22.9%, to $107.9 million, compared to $87.8
million during the same period in fiscal 1997. This increase resulted
partially from the first quarter acquisition of JTI and the operations of
Rosedale, which together contributed approximately $7 million of the $20.1
million increase. U.S. Xpress linehaul operations contributed $10.4 million to
the increase due to increased revenue miles.

Operating expenses represented 92.6% of operating revenue for the three
months ended June 30, 1997, compared to 97.5% during the same period in fiscal
1997.

Salaries, wages and employee benefits as a percentage of operating revenue
were 40.6% during the three months ended June 30, 1997, compared to 41.2%
during the same period in fiscal 1997. This decrease was a result of increased
use of owner-operators from the acquisition of JTI and increased use of
outside linehaul carriers from the acquisition of the operations of Rosedale.
All owner-operator expenses and purchased linehaul services are reflected as
purchased transportation.

Fuel and fuel taxes as a percentage of operating revenue were 15.3% during
the three months ended June 30, 1997, compared to 16.3% during the same period
in fiscal 1997. This decrease was primarily attributable to a 4.7% decrease in
the average fuel price per gallon and a 3.1% increase in average miles per
gallon. The Company's exposure to increases in fuel prices was managed by fuel
surcharges to its customers and on a limited basis by hedges against
fluctuations in fuel prices.

14
<PAGE>

Vehicle rents as a percentage of operating revenue were 6.7% during the
three months ended June 30, 1997, compared to 5.4% during the same period in
fiscal 1997. Depreciation and amortization as a percentage of operating
revenue was 2.9% for the three months ended June 30, 1997, compared to 4.9%
during the same period in fiscal 1997. Overall, as a percentage of operating
revenue, vehicle rents and depreciation were 9.6% during the three months
ended June 30, 1997, compared to 10.3% during the same period in fiscal 1997.
This decrease was due primarily to increased use of outside carriers by
Rosedale and increased use of owner-operators by JTI, neither of which
requires expenditures for revenue equipment. Furthermore, the Company
anticipates depreciation expense will continue to be a lower percentage of
operating revenue and vehicle rent will be a higher percentage of operating
revenue, as the Company is finding it more advantageous to lease, rather than
purchase, revenue equipment at this time.

Purchased transportation as a percentage of operating revenue was 8.2%
during the three months ended June 30, 1997, compared to 7.3% during the same
period in fiscal 1997. This increase resulted primarily from increased third
party transportation purchases by CSI/Crown due in part to the acquisition of
the operations of Rosedale in April 1997 and increased owner-operator expenses
from the May 1997 acquisition of JTI.

Operating expenses and supplies as a percentage of operating revenue were
6.4% during the three months ended June 30, 1997, compared to 7.0% during the
same period in fiscal 1997. This decrease was due primarily to increased use
of owner-operators as a result of the acquisition of JTI and reductions in
maintenance expenses.

Insurance premiums and claims as a percentage of operating revenue were 3.3%
during the three months ended June 30, 1997, compared to 4.9% during the same
period in fiscal 1997. This decrease was primarily due to obtaining new
insurance policies in late fiscal 1997 at rates more favorable to the Company.

Cost of installation supplies sold during the three months ended June 30,
1997 were $1.8 million, compared to $2.2 million during the same period in
fiscal 1996. This decrease was due to a decrease in installation supplies sold
to $2.4 million during the three months ended June 30, 1997 from $2.9 million
during the same period in fiscal 1996.

Income from operations for the three months ended June 30, 1997 increased
$5.8 million, or 258.5%, to $8.0 million from $2.2 million during the same
period in 1996. As a percentage of operating revenue, income from operations
was 7.4% for the three months ended June 30, 1997, compared to 2.5% during the
same period in 1996.

COMPARISON OF FISCAL 1997 TO FISCAL 1996

The Company's initiatives to improve equipment utilization and to reduce
operating expenses as a percent of revenue had favorable results for fiscal
1997. In this period, utilization for the combined truckload operations
increased 4.3% to $2,761 in revenue per tractor per week, compared to $2,646
during fiscal 1996. The operating ratio (operating expenses as a percentage of
revenue) improved 3.6 percentage points, reflecting a 21% increase in revenue
versus a 16.5% increase in operating expenses. The smaller increase in
operating expenses, compared to revenues, was due to reductions in several
fixed and variable expense items.

Operating revenue during fiscal 1997 increased $63.1 million, or 21.1%, to
$362.8 million, compared to $299.7 million during fiscal 1996. This increase
resulted partially from the fiscal 1996 acquisitions of CSI/Reeves and Hall
Systems, which together contributed $29.7 million of the $63.1 million
increase. U.S. Xpress linehaul operations contributed $33.4 million to the
increase. Increased U.S. Xpress linehaul revenue resulted from increased
revenue miles and a slight increase in the rate per revenue mile.

Operating expenses represented 94.6% of operating revenue for fiscal 1997,
compared to 98.2% during fiscal 1996.

15
<PAGE>

Salaries, wages and employee benefits as a percentage of operating revenue
were 41.0% for fiscal 1997, compared to 43.0% during fiscal 1996. This
decrease was a result of salaries and wages for both Hall Systems and
CSI/Crown representing a lower percentage of operating revenue 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.

Fuel and fuel taxes as a percentage of operating revenue were 16.9% for
fiscal 1997, compared to 16.3% during fiscal 1996. This increase was primarily
attributable to an 11.0% increase in the average price per gallon, offset by a
2.2% increase in average miles per gallon.. The percentage increase was also
mitigated by the growth of logistics and non-transportation revenue from $19.2
million in fiscal 1996 to $21.3 million in fiscal 1997. Logistics and non-
transportation revenue do not require expenditures for fuel and fuel taxes. As
a percentage of operating revenue, excluding the logistics and non-
transportation revenue, fuel and fuel taxes were 17.9% during fiscal 1997,
compared to 17.4% in fiscal 1996. The Company's exposure to increases in fuel
prices was managed by fuel surcharges to its customers and on a limited basis
by hedges against price fluctuations.

Vehicle rents as a percentage of operating revenue were 6.0% for fiscal
1997, compared to 5.8% for fiscal 1996. Depreciation and amortization as a
percentage of operating revenue was 4.0% for fiscal 1997, compared to 5.6%
during fiscal 1996. Overall, as a percentage of operating revenue, vehicle
rents and depreciation were 10.0% for fiscal 1997, compared to 11.4% during
fiscal 1996. This decrease was due in part to increased non-transportation
revenue from warehousing, transportation logistics service and the sale of
installation supplies, none of which require significant expenditures for
revenue equipment. As a percentage of operating revenue, excluding the
logistics and non-transportation revenue, vehicle rents and depreciation were
10.6% during fiscal 1997. Additionally, utilization for U.S. Xpress linehaul
operations increased to $2,761 in revenue per tractor per week for fiscal
1997, a 4.3% increase from the previous fiscal year, which reduced the number
of tractors required.

Purchased transportation as a percentage of operating revenue was 6.3% for
fiscal 1997, compared to 6.6% in fiscal 1996. This decrease was due to
increased non-transportation revenue at CSI/Crown which does not require
expenditures for purchased transportation.

Operating expenses and supplies as a percentage of operating revenue were
6.3% for fiscal 1997, compared to 7.1% during fiscal 1996. This decrease
resulted from two factors: (i) an increase in non-transportation revenue from
CSI/Crown and an increase in owner-operator revenue from Hall Systems which do
not require incremental Company expenditures for operating expenses and
supplies; and (ii) reductions in maintenance expenses.

Cost of installation supplies sold during fiscal 1997 was $8.2 million,
compared to $5.2 million during fiscal 1996. This increase was due to an
increase in installation supplies sold in fiscal 1997 to $11.0 million from
$6.6 million in fiscal 1996. This expense item reflects the cost of carpet
installation supplies that are sold to CSI/Crown's customers.

Income from operations for fiscal 1997 increased $14.5 million, or 275.5%,
to $19.7 million from $5.3 million during fiscal 1996. As a percentage of
operating revenue, income from operations was 5.4% during fiscal 1997,
compared to 1.8% during fiscal 1996.

Income tax provision for fiscal 1997 was $6.4 million, compared to a $19,000
benefit in fiscal 1996. This reflects an effective federal and state income
tax rate of 44.7% in fiscal 1997 as compared to the statutory federal and
state rate of approximately 39.0%. This higher rate was primarily the result
of non-deductible per diem allowances paid to drivers during part of fiscal
1997. Subsequent to December 31, 1996, per diem allowances paid to drivers
were eliminated.

16
<PAGE>

COMPARISON OF FISCAL 1996 TO FISCAL 1995

Operating revenue for fiscal 1996 increased $45.4 million, or 17.8%, to
$299.7 million, compared to $254.3 million in fiscal 1995. This increase
resulted primarily from the acquisitions of CSI/Reeves and Hall Systems, which
contributed $25.8 and $10.0 million of revenues, respectively, and a 5.1%
increase in revenue miles operated by U.S. Xpress.

Operating expenses represented 98.2% of operating revenue during fiscal 1996
and 92.9% during fiscal 1995.

Salaries, wages and employee benefits as a percentage of operating revenue
were 43.0% during fiscal 1996, compared to 42.5% in fiscal 1995. This increase
was due to an approximately 5% increase in driver pay in mid-March 1995 and an
increase in the empty miles percentage to 6.9% of total miles in fiscal 1996,
compared to 5.5% in fiscal 1995. Partly offsetting these factors were lower
salaries and wages at Hall Systems, as a percentage of operating revenue, due
to that company's utilization of owner- operators. All owner-operator expenses
are reflected as purchased transportation.

Fuel and fuel taxes as a percentage of operating revenue were 16.3% during
fiscal 1996, compared to 16.8% in fiscal 1995. This decrease resulted from an
increase of $5.4 million in logistics revenues and the addition of $7.9
million of non-transportation revenue from the newly acquired CSI/Reeves, both
of which do not require Company expenditures for fuel and fuel taxes. As a
percentage of operating revenue, excluding the increase in logistics and non-
transportation revenue, fuel and fuel taxes were 17.0% during fiscal 1996. The
Company's exposure to increases in fuel prices was managed by fuel surcharges
to its customers and on a limited basis by hedges against price fluctuations.

Vehicle rents as a percentage of operating revenue were 5.8% during fiscal
1996, compared to 6.6% in fiscal 1995. Depreciation and amortization
represented 5.6% of operating revenue in fiscal 1996, compared to 5.9% in
fiscal 1995. Overall, as a percentage of operating revenue, vehicle rents and
depreciation and amortization were 11.4% during fiscal 1996, compared to 12.5%
during fiscal 1995. This decrease was primarily attributable to increased
revenues from warehousing, transportation logistics services and the sale of
installation supplies, none of which required significant expenditures for
revenue equipment. Revenue from warehousing, logistics services and the sale
of installation supplies was $19.2 million during fiscal 1996, compared to
$5.9 million in fiscal 1995. As a percentage of operating revenue, excluding
the increase in logistics and non-transportation revenue, vehicle rents and
depreciation were 11.9% during fiscal 1996.

Purchased transportation as a percentage of operating revenue was 6.6%
during fiscal 1996, compared to 4.1% during fiscal 1995. This increase
resulted primarily from increased third-party transportation purchases by
CSI/Reeves and Xpress Logistics, and owner-operator expense from Hall Systems.
The majority of transportation services provided by Xpress Logistics and
CSI/Reeves are provided by third parties.

Operating expenses and supplies as a percentage of operating revenue were
7.1% during fiscal 1996, compared to 6.8% in fiscal 1995. This increase
reflected high parts, tires and repair costs incurred in fiscal 1996
associated with preparing used tractors for disposal during the Company's
second quarter.

Cost of installation supplies sold during fiscal 1996 reflects costs of
carpet installation supplies sold through CSI/Reeves to retail customers from
the date of acquisition on August 31, 1995.

Building rental as a percentage of operating revenue was 1.2% during fiscal
1996, compared to 0.8% during fiscal 1995. This increase was primarily
attributable to building rental expenses associated with the acquired
warehousing operations of CSI/Reeves.

Gain on sales of equipment as a percentage of operating revenue was 0.4%
during fiscal 1996, compared to 1.1% during fiscal 1995. Proceeds from the
disposals of used equipment were $17.4 million during fiscal 1996, compared to
$17.6 million during fiscal 1995.

17
<PAGE>

Income from operations for fiscal 1996 decreased $12.9 million, or 71.1%, to
$5.3 million from $18.2 million in fiscal 1995. As a percentage of operating
revenue, income from operations was 1.8% in fiscal 1996, compared to 7.1% in
fiscal 1995.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of liquidity during fiscal 1997 and the first
quarter of fiscal 1998 were funds provided by operations, borrowings under
long-term debt facilities, lines of credit and proceeds from the sales of used
property and equipment. At June 30, 1997, the Company had in place a $50.0
million credit facility with a group of banks with a weighted average interest
rate of 7.18%, of which $12.5 million was available for borrowing. In the
remainder of fiscal 1998, the Company's primary sources of liquidity are
expected to be the net proceeds of this offering, funds from operations,
borrowings under installment notes payable and borrowings under the line of
credit.

Cash generated from operations was $3.1 million in the first quarter of
fiscal 1998 compared to a use of $500,000 during the same period of fiscal
1997 and was $8.0 million in fiscal 1997 compared to $9.0 million in fiscal
1996. Net cash used in investment activities was $1.5 million in the first
quarter of fiscal 1998, $4.2 million during the same period of fiscal 1997,
$3.2 million in fiscal 1997 and $17.3 million in fiscal 1996. Of the cash used
in investment activities, $3.9 million was used to acquire additional property
and equipment in the first quarter of fiscal 1998, while $24.9 million was
used in fiscal 1997, compared to $28.2 million in fiscal 1996. The decrease in
amounts expended for purchases of new equipment in fiscal 1997, compared to
fiscal 1996, reflects the Company's greater use of operating leases in fiscal
1997 as opposed to purchasing such equipment. The Company anticipates that
expenditures (net of trade-ins) for the acquisition of revenue equipment will
be approximately $68 million in fiscal 1998 and will be either acquired by
purchases or financed through operating leases. The Company used $5.0 million
of cash in the acquisition of JTI and the operations of Rosedale in the first
quarter of fiscal 1998.

Net cash used for financing activities was $1.5 million in the first quarter
of fiscal 1998, compared to $1.1 million provided by financing activities
during the same period of fiscal 1997. Net cash used for financing activities
was $4.1 million in fiscal 1997, compared to $6.3 million provided in fiscal
1996. This decrease resulted primarily from the Company's greater use of
leasing as a method of acquiring equipment in fiscal 1997 and the first
quarter of fiscal 1998. As a result, net repayments under lines of credit and
long-term debt were $1.6 million in the first quarter of fiscal 1998, compared
to net borrowings of $1.8 million during the same period of fiscal 1997 and
net repayments of $4.2 million in fiscal 1997, compared to net borrowings of
$5.4 million during fiscal 1996. Net borrowings under lines of credit were
$2.0 million in the first quarter of fiscal 1998, compared to $3.0 million
during the same period of fiscal 1997 and $1.0 million during fiscal 1997,
compared to net borrowings of $30.3 million during fiscal 1996. Borrowings
under long-term debt during the first three months of fiscal 1998 were $17.6
million, compared to $2.2 million during the same period of fiscal 1997.
Payments of long-term debt during the first quarter of fiscal 1998 were $21.2
million, compared to $3.4 million during the same period of fiscal 1997.
Increased borrowings under and repayments of long-term debt resulted primarily
from the refinancing of high interest rate loans assumed by the Company in its
acquisition of JTI. During fiscal 1996, the Company obtained a new revolving
line of credit with capacity up to $50.0 million. A portion of the
availability under this new line was immediately used to repay an equal amount
of existing long-term indebtedness bearing higher interest rates. In June
1997, the Company entered into a $10 million loan and security agreement
maturing July 2001 with an interest rate of 6.72% at June 30, 1997, the
proceeds of which were used to repay indebtedness under the revolving line of
credit. This loan is collateralized by certain property and equipment.

Management believes that funds provided by operations, borrowings under
installment and bank notes payable and available borrowings under the
Company's existing line of credit will be sufficient to fund its cash needs
and anticipated capital expenditures through at least the next twelve months.
Management also believes that the use of the net proceeds of this offering to
acquire revenue equipment

18
<PAGE>

currently under operating leases and pay indebtedness will result in a
reduction in interest rates under the existing line of credit and will
increase the Company's flexibility to finance its planned future growth.
However, if the Company were to make a significant cash acquisition, it is
likely that the Company would need to increase its borrowing capability under
its existing line of credit.

INFLATION

Inflation has not had a material effect on the Company's results of
operations or financial condition during the past three years. However,
inflation higher than experienced during the past three years could have an
adverse effect on the Company's future results.

SEASONALITY

19
<PAGE>

INDUSTRY OVERVIEW

Truckload carriers such as the Company typically transport full trailer
loads directly from origin to destination without the delays and expense of en
route handling and multiple shipper load consolidation that characterize less-
than-truckload ("LTL") carriers. As the service-sensitive, flexible mode of
transportation, leading truckload carriers have consistently gained market
share at the expense of more costly or less flexible modes such as LTL or
rail. The Company estimates the for-hire truckload market segment of the
transportation industry accounted for $60 billion in revenue in 1996 and the
private fleet segment of the truckload industry generated $115 billion in 1996
revenues. The for-hire truckload segment is highly fragmented, with the ten
largest for-hire truckload carriers accounting for less than 13% of total for-
hire truckload revenues in 1996.

Subsequent to deregulation in 1980, the truckload industry has experienced
significant changes that affect both shippers and carriers. Five trends
currently evolving in the truckload industry are:

. Significant growth opportunities for high-service providers. Many
shippers are focusing on improving the logistical efficiency of their
manufacturing and distribution systems. With the adoption of just-in-
time manufacturing and distribution systems, expedited product movement
has become increasingly important and the demand for time-definite
pickup and delivery of freight has increased. In addition, air freight
customers are increasingly using truckload carriers for less costly
expedited transportation services.

. Increasing reliance on core carriers. Shippers are seeking to reduce the
number of authorized carriers they use and establish long-term
relationships with a small group of "core carriers." These
relationships: (i) help to ensure consistent, high quality service for
the shipper, (ii) enhance the likelihood for advanced electronic
interface between shipper and carrier and (iii) provide the carrier the
opportunity for higher equipment utilization and more predictable
revenue streams.

. Growing role of logistics providers. An increasing number of shippers
are focusing their capital resources on their primary business and,
therefore, are outsourcing their freight transportation management and
logistics functions. Logistics providers coordinate the transportation
of shipments on behalf of customers, often tailoring their services to
meet the specific requirements of the shippers.

. Driver shortage. A shortage of qualified drivers continues to constrain
the truckload industry. In response, truckload carriers are constantly
seeking methods such as better equipment, improved communications and
increased compensation, to attract and retain drivers.

. Industry consolidation. Competitive pressures within the truckload
industry and high levels of service demanded by customers require
today's carriers to demonstrate financial stability, critical mass and
technological capabilities. Carriers that do not possess these
characteristics have begun to exit the truckload industry through
liquidation or through continued industry consolidation. Economies of
scale in the industry favor large carriers with modern fleets, excellent
service, superior technology and a strong capital base.

20
<PAGE>

BUSINESS

INTRODUCTION

The Company is one of the ten largest truckload carriers in the United
States. The Company provides transportation and logistics services throughout
the United States and in parts of Canada and Mexico, specializing in time-
definite and expedited longhaul and regional truckload services. The Company
is a leader in the adoption of proven new technologies as a means of reducing
costs and providing better service. The Company has two operating
subsidiaries, U.S. Xpress and CSI/Crown. U.S. Xpress, which accounted for 82%
of the Company's fiscal 1997 revenues, provides time-definite and expedited
longhaul and regional truckload services as well as transportation and
logistics services to the air freight industry. CSI/Crown is a leader in
providing logistics services to manufacturers and retailers in the
floorcovering industry. The Company's top 50 customers include Federal
Express, Carrier, Amana, Hewlett Packard, DuPont, Compaq and Armstrong, each
of which has designated the Company as a core carrier. Generally, core
carriers are suppliers with which shippers have established strategic
alliances for a broad range of transportation services.

The Company has increased its revenues at a compounded annual growth rate of
18.2% over the past five fiscal years to $363 million for fiscal 1997 through
the expansion of business from existing customers, the development of
relationships with new customers and strategic acquisitions. The Company's
strategy for future revenue growth is to continue to establish strategic
alliances with its top customers, target high-service market segments, make
strategic acquisitions and leverage its technology advantage. The Company also
seeks to sustain growth through programs designed to recruit and retain
quality drivers for its expanding fleet.

The Company has initiated a strategy to enhance profitability and sustain
growth by improving efficiency, reducing costs and introducing technology to
improve service. The Company realigned its operations into two subsidiaries to
combine various operating, marketing, maintenance and administrative functions
thereby reducing costs and improving equipment utilization. The Company has
improved the predictability of and further reduced costs by eliminating five
maintenance facilities and outsourcing some maintenance activities, revising
insurance programs, modifying its revenue equipment acquisition strategy and
improving fuel economy. These initiatives increased profitability in fiscal
1997, and management believes that these strategies will have a more
significant effect on results of operations in the future.

The Company is a leader in the innovation and adoption of proven new
technologies as a means of reducing costs and enhancing customer service. For
example, the newly-introduced Xpress Connect Internet connection, a fully
integrated customer-to-truck communications system, enables customers to trace
freight, tender loads and exchange invoice information via the Internet as
well as communicate with the Company via e-mail.

STRATEGY

The Company's operating and growth strategy is focused on taking advantage
of opportunities and evolving trends in the truckload transportation industry.
These strategies include:

. Position the Company as a premier high-service provider. The Company's
services have attracted customers across many industries, particularly
those that operate just-in-time manufacturing and distribution systems.
A large portion of the Company's growth has been attributable to
providing services that are differentiated from other truckload
carriers. The Company was one of the first in the industry to establish
time-definite pickups and deliveries as a standard for service quality.
In addition, the Company is one of the few truckload carriers to provide
expedited service throughout the continental United States and in parts
of Canada and Mexico. This is particularly important to shippers that
operate multiple, geographically-separated facilities. The Company has
consistently utilized proven new technologies that provide value to
customers, such as the newly-introduced Xpress Connect system that
enables U.S. Xpress and CSI/Crown customers to trace freight, tender
loads, exchange invoice information and perform other functions through
the Internet.

21
<PAGE>

. Expand core carrier relationships with shippers. Through its service
capabilities, the Company is positioned to act as a core carrier to
major shippers. The Company provides longhaul and regional truckload
service, expedited and time-definite service, dedicated fleets and
services to third party logistics providers. In seeking customers, the
Company emphasizes its commitment to flexibility, responsiveness,
analytical planning and information systems. The Company's top 50
customers, most of which have designated the Company as a core carrier,
include Federal Express, Carrier, Amana, Hewlett Packard, DuPont, Compaq
and Armstrong, and accounted for approximately 46% of revenues in fiscal
1997.

. Emphasize driver-friendly practices. The Company focuses significant
resources and attention on the successful recruiting, hiring, training
and retention of qualified professional drivers. Hiring and retaining
drivers is an essential element of the Company's continuing growth and
profitability. The Company has implemented a number of ongoing
initiatives to retain and recruit drivers, such as handling driver-
friendly freight, adopting attractive compensation and benefits
packages, providing equipment with desirable driver amenities and
emphasizing a Company-wide culture of support for drivers' needs.

. Continue to emphasize relationships with logistics providers. As
shippers continue to focus on their core competencies and outsource
their transportation needs, shippers' use of logistics providers is
increasing. The Company believes that its service capabilities and high
quality service will result in additional business opportunities with
these logistics providers. The Company has established close working
relationships with a number of leading third party logistics providers,
such as Menlo Logistics, J.B. Hunt Logistics and Ryder Integrated
Logistics. Revenues from logistics providers grew 196% to $33.1 million
in fiscal 1997.

. Continue to pursue attractive acquisition opportunities. The Company
seeks strategic acquisition opportunities within the Company's
established market segments or that complement its existing business.
Management believes that market and financial forces will continue to
create attractive acquisition opportunities. The Company has completed
two acquisitions since the end of fiscal 1997.

SERVICES

The Company provides six principal services: time-definite service,
expedited service, regional service, service to third party logistics
providers, dedicated fleets and floorcovering logistics.

Time-Definite Service. This is the Company's principal service speciality
and involves the pickup and delivery of freight on time-specific schedules
over distances ranging from 200 to 3,000 miles. Time-definite transportation
requires pickups and deliveries to be performed to exact appointment times or
within a specified number of minutes without necessarily involving expedited
transit times. This service is a key point of differentiation for U.S. Xpress
from many other trucking companies that typically provide service only within
windows ranging from several hours to a few days. Time-definite service is
particularly important to the Company's customers that operate just-in-time
manufacturing or distribution systems.

Expedited Service. A substantial portion of the time-definite freight
transported by the Company is handled on an expedited basis. The Company's
expedited service consists of the pickup and delivery of freight on a
prescribed schedule at transit times competitive to deferred air freight
service. The Company is able to meet these transit times through the use of
team drivers or relays at a much lower cost than deferred air freight. In
fiscal 1997, expedited revenue grew 176% to $124.8 million, and accounted for
44% of U.S. Xpress' truckload revenue. Customers in the air freight industry
accounted for approximately one-quarter of expedited services revenue, with
the remainder provided by manufacturers, distributors and retailers.

22
<PAGE>

Examples of this service are as follows:

<TABLE>
<CAPTION>
TRANSIT TIME
ORIGIN DESTINATION MILES (IN HOURS)
------ ----------- ----- ------------
<S> <C> <C> <C>
Charlotte, NC Los Angeles, CA 2,381 53
Atlanta, GA San Francisco, CA 2,482 55
Seattle, WA Miami, FL 3,263 73
Dallas, TX Chicago, IL 923 20
Newark, NJ Columbus, OH 527 12
</TABLE>

Regional Service. The ability to provide regional service is an important
factor in obtaining many core carrier accounts. Recognizing the strategic
importance of offering regional services, the Company acquired Hall Systems, a
Southeast regional truckload carrier, in 1994. In 1995, the Company
established regional truckload carrier service in the West and in July 1996,
significantly expanded its Western regional operations with the acquisition of
the air freight service operations of Michael Lima Transportation. Prior to
fiscal 1998, regional service in the Midwest was offered by U.S. Xpress on a
limited basis as a service to key customers and to reposition equipment. This
service is expected to expand significantly as a result of the acquisition of
JTI, a truckload carrier primarily serving the Midwest.

Services to Third Party Logistics Providers. The Company has established
strategic alliances with several major third party logistics suppliers.
Logistics providers and air freight forwarders typically manage transportation
purchasing, coordination and freight allocation for their customers. As
shippers continue to focus on their core competencies and outsource their
transportation needs, the use of logistics providers by shippers is expected
to increase. Revenues from logistics providers increased 196% to $33.1 million
in fiscal 1997.

Dedicated Fleets. The Company provides equipment and drivers that are
dedicated to specific customers and specific traffic lanes. The Company
benefits from its dedicated operations through increased freight volume from
key customers and improved planning of equipment requirements while drivers
benefit from more predictable schedules and traveling regular routes. As of
June 30, 1997, the Company operated 198 tractors dedicated to specific
customers or lanes, compared with 83 tractors as of June 30, 1996.

Floorcovering Logistics. CSI/Crown picks up floorcovering products from
manufacturers; consolidates shipments into truckloads bound for specific
destinations; contracts with U.S. Xpress and other truckload carriers to
deliver the products to CSI/Crown service centers or to contract agents; and
delivers or arranges for delivery of the products to floorcovering
distributors and retailers throughout the United States and in parts of Canada
and Mexico. In addition, CSI/Crown provides warehouse facilities, cutting
services and installation supplies to floorcovering distributors and
retailers. The Company's revenues from floor covering logistics in fiscal 1997
were $65.8 million, an increase of 38% from fiscal 1996. In April 1997,
CSI/Crown purchased Rosedale's floorcovering distribution system assets,
including dock and material handling equipment and assumed Rosedale's leases
of eight terminal facilities and several customer agreements. As a result,
CSI/Crown now operates 28 distribution centers and contracts with others to
provide distribution services at 31 other locations.

MARKETING AND CUSTOMERS

Marketing personnel target customers for each of the Company's six major
services. The Company's services are marketed on the basis of the Company's
commitment to high levels of service, flexibility, responsiveness, analytical
planning and high technology information management. The Company's marketing
department is primarily responsible for identifying new business prospects and
implementing marketing programs to obtain and retain customer accounts. The
marketing staff also is responsible for offering the Company's logistics
capabilities to existing and new customers and to third party logistics
providers.

23
<PAGE>

Mr. Quinn, the Company's Co-Chairman, and Mr. Lusk, the Executive Vice
President of Marketing, are directly involved in marketing the Company's
services at the national account level and supporting local sales activities.
In addition, the Company employs 17 full-time marketing representatives, who
are geographically dispersed.

The Company's top 50 customers, most of which have designated the Company as
a core carrier include Federal Express, Carrier, Amana, Hewlett Packard,
DuPont, Compaq and Armstrong, and accounted for approximately 46% of revenues
in fiscal 1997. During fiscal 1997, no single customer accounted for more than
6% of the Company's revenue.

TECHNOLOGY

The Company adopts proven new technologies that result in both competitive
service advantages and more profitable service to its customers. Within the
past five years, the Company developed a computerized information system that
has been integrated with the QUALCOMM Omnitracs satellite communication system
(the "QUALCOMM system"). The QUALCOMM system provides direct communication
between the Company and its drivers to enhance customer service and equipment
utilization. The Company's Electronic Data Interchange ("EDI") capabilities
provide customers with an efficient means of tendering loads, tracing freight,
directly paying invoices and performing other administrative functions.
Management believes that this system is a base from which it will be able to
provide enhanced customer service and ultimately provide direct connectivity
between customers and drivers via the Internet.

Xpress Connect. In November 1996, the Company introduced its proprietary
Internet-based Xpress Connect system that enables customers to trace freight,
tender loads and exchange invoice information via the Internet and communicate
with the Company via e-mail. The system, which is a featured part of the
Company's World Wide Web site, is designed to assist shippers in better
managing their transportation shipments by providing up-to-date information on
the location and status of active shipments as well as historical information
on completed shipments. The Company believes that Xpress Connect is the first
World Wide Web application to permit a customer to track shipments without
prior knowledge of shipment or order numbers. Xpress Connect is customer-
specific and password protected to guarantee the security of each customer's
proprietary information.

Eaton Vorad. This collision avoidance system is specified equipment on the
Freightliner's Century Class tractors now being deployed by U.S. Xpress. This
radar-based system is designed to detect traffic ahead and to the side of
trucks, thereby providing drivers with additional response time to avoid side
and front impact collision. The U.S. Xpress fleet had more than 1,100 such
systems in operation at June 30, 1997.

Transit Technologies. The Pre-Pass(TM) and Advantage 75(TM) technologies
enable a tractor to stop at one weigh station and receive clearance for travel
on participating highways. After the truck conducts an initial visit to a
weigh station, information regarding the truck and its contents are downloaded
onto a transponder located on the tractor. Thereafter, a sensor located along
the highway reads the information contained in the transponder and allows the
truck and its contents to be electronically cleared without the delays
associated with multiple weigh station visits. The Company participated in
beta tests for these technologies and equipped a majority of its tractors with
these systems as of June 30, 1997. The Company has begun to implement a
similar technology to expedite movement through toll plazas. These
technologies enhance fuel economy, improve equipment utilization, improve
transit times and reduce accidents.

DRIVERS

At June 30, 1997, U.S. Xpress employed 3,461 drivers. Recruiting, training
and retention of qualified drivers are all essential to support the Company's
continued growth and to maintain high equipment

24
<PAGE>

utilization. The Company has implemented a number of ongoing initiatives to
retain and recruit drivers, such as handling driver-friendly freight, adopting
an attractive compensation and benefits package, providing equipment with
desirable driver amenities and providing a Company-wide culture of support for
drivers' needs.

Recruiting. The Company's recruiting efforts include targeted advertising
and recruitment by Company drivers. New driver candidates are carefully
screened on the basis of prior driving experience and safety records and are
required to pass mandatory drug tests. The Company also maintains a "quick
response" system that investigates prospective drivers' credentials and
driving histories and in many instances qualifies drivers for hiring within
one business day of application.

Training. All new drivers, regardless of experience, are trained under
strict guidelines. The Company provides a two-day orientation program to
inform drivers about the Company, its equipment and its expectations. The
orientation program also stresses safety instruction and proper operation of
the tractors and trailers used by the Company.

Driver Managers. Each Company driver is assigned a driver manager who is
responsible for all aspects of driver satisfaction, including miles, home time
and resolution of work-related issues. Driver managers' performance is
evaluated based on equipment utilization, driver turnover, driver miles, on
time service and driver safety performance. The driver managers communicate
with drivers daily through the satellite communications system and by
telephone when personal communication is warranted.

Driver-Friendly Freight. The Company focuses much of its marketing effort on
customers with freight which is driver-friendly in that it requires minimal or
no loading or unloading by drivers and minimizes waiting time for drivers
while trucks are loaded or unloaded.

Compensation and Benefits. Company drivers are compensated primarily on the
basis of miles driven, with base pay per mile increasing with a driver's
length of employment. Drivers also earn additional mileage pay through safety
and mileage incentive bonuses. Employee benefits include paid holidays and
vacations, health insurance, a 401(k) retirement plan under which the Company
matches 50% of employee contributions up to 6% of compensation and pre-paid
telephone calling cards that contain 30 minutes of free calling time per
month. The Company recently increased its driver pay an average of $.02 per
mile in order to provide a competitive wage.

Driver Amenities. The Company's late-model, conventional tractors are
designed for driver comfort and safety. In fiscal 1997, the Company began
purchasing Freightliner Century Class tractors, which contain additional
driver amenities, such as double sleeper bunks, extra large cabs, air-ride
suspensions and additional storage for personal items. The Company also has
developed specific satellite communications applications that enable drivers
to remain in touch with their families and receive information about pay and
expense advances, directions to customer locations, weather updates and load
assignments. In October 1996, the Company introduced Internet e-mail
capability to its entire fleet.

EQUIPMENT

At June 30, 1997, the Company operated 2,573 conventional tractors and 5,824
dry van trailers. Over 97% of the trailers are 53' x 102" high-cubic capacity
vans, many of which include air ride suspension. During fiscal 1997,
management implemented a program designed to reduce the Company's trailer to
tractor ratio as a part of its cost reduction strategies.

Growth of the Company's tractor and trailer fleets is managed based on
market conditions and the Company's experience and expectations with respect
to equipment utilization levels. The Company determines the specifications of
equipment purchases based on such factors as vehicle and component quality,
warranty service, driver preferences, new vehicle prices and the likely resale
market. Because the fleet is standardized and has warranty maintenance
agreements with original equipment suppliers, the Company has reduced parts
inventories and maintenance costs.

25
<PAGE>

Tractors are typically replaced every 36 months, generally well in advance
of the need for major engine overhauls. This schedule can be accelerated or
delayed based on trade-in values of existing revenue equipment. The Company
has negotiated favorable arrangements from its primary equipment vendors for
its scheduled 1998 purchases of tractors, which reduce the Company's risks
related to equipment resale values. The Company purchases all of its tractors
from Freightliner and has begun purchasing composite plate trailers from
Wabash. The air ride suspension trailers provide a more comfortable ride for
the drivers and allow the Company to haul sensitive freight such as electronic
equipment. The lighter Wabash composite trailers reduce fuel consumption and
increase capacity.

SAFETY AND RISK MANAGEMENT

The Company is committed to ensuring that it has safe drivers. The Company
regularly communicates with drivers to promote safety and to instill safe work
habits through Company media, safety review sessions and ethics and
responsibility training. These programs reinforce the importance of driving
safely, abiding by all laws and regulations such as speed limits and driving
hours, performing regular equipment inspections and acting as good citizens on
the road. The Company's accident review committee meets weekly to review any
new accidents, take appropriate action related to drivers, examine accident
trends and implement changes in procedures or communications to address safety
issues.

Management's emphasis on safety also is demonstrated through its equipment
specifications, such as anti-lock brakes on tractors and trailers, automatic
engine brakes, electronic engines, special mirrors, conspicuity tape and the
implementation of the Eaton Vorad collision avoidance system on all
Freightliner Century Class tractors.

The Company requires prospective drivers to meet higher qualification
standards than those required by the DOT. The DOT requires the Company's
drivers to obtain national commercial driver's licenses pursuant to the
regulations promulgated by the DOT. The DOT also requires that the employer
implement a drug-testing program in accordance with DOT regulations. The
Company's program includes pre-employment, random, reasonable cause, post-
accident and post-injury drug testing.

The primary claims arising in the Company's business consist of cargo loss
and damage, vehicle liability (personal injury and property damage). The
Company currently purchases primary and excess coverage for these types of
claims in levels which management believes are sufficient to adequately
protect the Company from significant claims. The Company also maintains
primary and excess coverage for employee medical expenses and hospitalization,
damage to physical properties and equipment damage resulting from collisions
or other losses.

PERSONNEL

At June 30, 1997, the Company employed 4,916 persons, including 3,461
drivers at U.S. Xpress. In addition, 110 independent contractor/drivers
provided services to U.S. Xpress. The Company considers relations with its
employees, all of whom are non-union, to be satisfactory. On July 23, 1997,
the International Brotherhood of Teamsters, Local 528, filed a petition
pursuant to Section 9 of the Labor Management Relations Act seeking collective
bargaining rights with respect to a group of approximately 140 employees at
the CSI/Crown facility in Tunnel Hill, Georgia. Subsequently, the union filed
two unfair labor practice charges relating to the discharge of employees. Upon
the request of the union, the National Labor Relations Board has suspended
processing of the election petition until the unfair labor charges are
resolved. The Company is unable to predict when the charges will be resolved
or when or if the election will be held. Management does not believe that the
union organizing efforts at the CSI/Crown facility in Tunnel Hill will have a
material adverse affect on the Company's results of operations.

On August 1, 1996, the Company ended its arrangement with a third-party
leasing company under which the Company leased its drivers and most office and
maintenance employees. On that date, all persons employed through the leasing
company became employees of the Company or its subsidiaries. On January 1,
1997, the Company entered into an arrangement with a third party, under which
the Company out-sourced administration of payroll, benefits, unemployment
insurance and workers' compensation. Under this arrangement, the Company pays
the third party for its services a fixed amount per employee. The Company
believes that this arrangement enables it to achieve cost savings on personnel
benefits and insurance premiums.

26
<PAGE>

COMPETITION

REGULATION

The Company, as a motor carrier, is subject to rules and regulations
promulgated by the DOT and by various laws and regulations enforced by state
agencies. These regulatory authorities have broad powers, generally governing
activities such as authority to engage in motor carrier operations, accounting
systems, certain mergers, consolidations, acquisitions and periodic financial
reporting. Subject to federal, state and provincial regulatory authorities,
the Company may transport most types of freight to and from any point in the
continental United States and in parts of Mexico and Canada over any route
selected by the Company. The trucking industry is subject to possible
regulatory and legislative changes (such as increasingly stringent
environmental regulations or limits on vehicle weight and size) that may
affect the economics of the industry by requiring changes in operating
practices or by affecting the cost of providing truckload services.

The Company has underground storage tanks for diesel fuel at its terminals
in Chattanooga, Tennessee; Tunnel Hill, Georgia; Oklahoma City, Oklahoma;
Birmingham, Alabama; and Lincoln, Nebraska. As a result, the Company is
subject to regulations promulgated by the EPA governing the design,
construction and operation of underground fuel storage tanks from installation
to closure. The Company believes all of its tanks are in substantial
compliance with EPA regulations.

PROPERTIES

Most of the Company's offices and terminals are leased. The Company's and
U.S. Xpress' headquarters are located in two leased buildings in Chattanooga,
Tennessee. CSI/Crown is based in Tunnel Hill, Georgia, approximately 25 miles
from the Chattanooga location. In addition to the headquarters locations, U.S.
Xpress operates 18 terminal facilities and CSI/Crown operates 28 distribution
service centers.

Each of the Company's terminals and service centers is headed by a terminal
or service center manager. Seven U.S. Xpress terminals include maintenance
facilities. Several terminals include driver lounges and customer service
functions for local pickups and deliveries. In fiscal 1997, an expansion of
the CSI/Crown dock facility in Tunnel Hill was completed, and expansion of the
U.S. Xpress maintenance facility at Tunnel Hill was begun. The Company
believes that its current facilities are adequate for its present needs
although the Company may consider consolidation of some office operations into
a new headquarters facility in the next several years. The Company also
periodically seeks additional locations and facilities and has not encountered
any significant difficulty in locating additional facilities.

LEGAL PROCEEDINGS

The Company is routinely a party to litigation incidental to its business,
primarily involving claims for worker's compensation or for personal injury
and property damage incurred in the transportation of freight. The Company
maintains insurance which covers liability in excess of retained amounts for
personal injury and property damage claims. Prior to December 31, 1996, the
Company was self-insured for personal injury and property damage in the amount
of $500,000 per occurrence and could become subject to one or more as yet
unasserted claims as a result of accidents which occurred prior to that date,
which, if decided adversely to the Company, could have a materially adverse
affect on the Company's operating results.

27
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
Max L. Fuller........... 44 Co-Chairman of the Board, Vice President and
Secretary, Director
Patrick E. Quinn........ 51 Co-Chairman of the Board, President and
Treasurer, Director
Ray M. Harlin........... 47 Chief Financial Officer, Director
E. William Lusk, Jr. ... 41 Executive Vice President of Marketing, Director
William K. Farris....... 44 Executive Vice President of Operations and
President, U.S. Xpress, Inc., Director
L. D. Miller, III....... 44 Chairman of CSI/Crown, Inc.
Steven J. Cleary........ 39 Chief Executive Officer and General Manager of
CSI/Crown, Inc.
Thor N. Edman, Jr. ..... 53 President of CSI/Crown, Inc.
Ronald E. Pate.......... 55 President of U.S. Xpress Leasing, Inc.
James B. Baker.......... 51 Director
A. Alexander Taylor, 44 Director
II.....................
</TABLE>

All directors are elected for one-year terms by the Company's stockholders
and hold office until their successors are elected and qualified. Executive
officers of the Company are appointed annually by the Board of Directors and
serve at the Board's discretion.

Mr. Fuller has served as Co-Chairman of the Board of the Company since March
1994 and was first elected a director, Vice President and Secretary of the
Company in 1985. Mr. Fuller has been employed in the transportation industry
continuously since 1970 and served as Vice President of Southwest Equipment
Rental, Inc., a transportation company, from 1974 to July 1985, when he left
to form U.S. Xpress with Mr. Quinn. Mr. Fuller currently serves as a director
of the Tennessee and Georgia Trucking Associations, is a past director of the
University of Georgia Trucking Profitability Studies Conference and is active
in the Young Presidents Organization.

Mr. Quinn has served as Co-Chairman of the Board since March 1994 and also
as President and Treasurer of the Company since 1985. Mr. Quinn was first
elected a director of the Company in 1985. In 1977, he joined Southwest
Equipment Rental, Inc., a transportation company, as Vice President and
General Counsel and became Executive Vice President and General Manager in
1984. Mr. Quinn left Southwest Equipment Rental, Inc. in July 1985 to form
U.S. Xpress with Mr. Fuller. Mr. Quinn is Chairman of the American Trucking
Association's Communications and Image Advisory Committee, a Director and the
Treasurer of the American Trucking Association's Litigation Center and a
member of the Board of Directors of the Truckload Carriers Association.

Mr. Harlin has served as Chief Financial Officer of the Company since June
1997 and was elected to the Board of Directors in July 1997 at the annual
meeting of stockholders. Prior to joining the Company, Mr. Harlin was employed
for 25 years with the public accounting firm of Arthur Andersen LLP. He was a
Partner with that firm for the last 14 years serving in the Chattanooga,
Tennessee office. Mr. Harlin is a member of the American Institute of
Certified Public Accountants.

Mr. Lusk has served as an Executive Vice President of the Company since 1996
and was Vice President of Marketing of the Company from 1991 to 1996. He
previously served as Executive Vice

28
<PAGE>

President of U.S. Xpress, an operating subsidiary of the Company, from 1987 to
1990 and has been employed in the transportation industry in various
capacities for the past 19 years.

Mr. Farris was named Executive Vice President of Operations of the Company
and President of U.S. Xpress in 1996. He previously served as Vice President
of Operations of the Company from 1993 to 1996. Mr. Farris was Vice President
of Operations of Southwest from 1991 to 1993 and Vice President of Customer
Service of U.S. Xpress from 1988 to 1991.

Mr. Cleary joined the Company in 1991 as Director of Human Resources and was
named Vice President of Human Resources and Safety in 1994. He was named
Executive Vice President of Human Resources in 1996 and Chief Executive
Officer and General Manager of CSI/Crown in 1997. Prior to joining the
Company, he served in operations and human resources management positions for
Ryder Distribution Services and Rollins Transportation Services.

Mr. Miller served as President of Crown Transport from its inception in 1985
until the merger of Crown Transport and CSI/Reeves in 1996. He now serves as
Chairman of CSI/Crown. He has been employed in the transportation industry
since 1974.

Mr. Edman served as President and Chief Executive Officer of CSI/Reeves,
Inc. from 1990 to 1995, when the Company acquired CSI/Reeves, Inc. Mr. Edman
has served as President of CSI/Crown since the acquisition. He has been
employed in the floor covering industry since 1968.

Mr. Pate joined the Company in 1994 as Assistant Director of Maintenance. He
became Director of Maintenance later that year and Executive Vice President of
U.S. Xpress Leasing, Inc., the Company's equipment leasing and maintenance
subsidiary. He was named President of U.S. Xpress Leasing, Inc. in 1996. Prior
to joining the Company, Mr. Pate was Vice President of Chattanooga operations
for Universal Tire Company and had been employed in the tire business for 25
years.

Mr. Baker has served as a director of the Company since 1994. Mr. Baker has
been a partner in River Associates, LLC, an investment firm, since 1993.
Previously, Mr. Baker was employed by CONSTAR International, Inc., a plastic
container manufacturer, as a Senior Vice President from 1988 to 1991 and as
the President and Chief Operating Officer from 1991 to 1992. Mr. Baker is also
a director of Wellman, Inc., a chemical company.

Mr. Taylor has served as a director of the Company since 1994. Mr. Taylor
has been a partner with the law firm of Miller & Martin since 1983. Mr. Taylor
is also a director of Chattem, Inc., a consumer products company.

29
<PAGE>

COMMITTEES

The Board of Directors has established an Audit Committee and a Compensation
Committee. The functions of the Audit Committee are to meet with the
independent public accountants of the Company, to review the audit plan for
the Company, to review the annual audit of the Company with the accountants,
together with any other reports or recommendations made by the accountants, to
recommend whether the auditors should be continued as auditors of the Company
and, if other auditors are to be selected, to recommend the auditors to be
selected. The Audit Committee also reviews with the auditors for the Company
the adequacy of the Company's internal controls and perform such other duties
as shall be delegated to the Committee by the Board of Directors. Messrs.
Baker, Quinn and Taylor serve as the members of the Audit Committee, with Mr.
Taylor serving as Chairman.

The functions of the Compensation Committee are to recommend to the Board of
Directors policies and plans concerning the salaries, bonuses and other
compensation of the senior executives of the Company, including reviewing the
salaries of the senior executives; recommending bonuses, stock options and
other forms of additional compensation for them; establishing and reviewing
policies regarding management perquisites and performing such other duties as
shall be delegated to the Committee by the Board. Messrs. Baker, Fuller and
Taylor serve as members of the Compensation Committee, with Mr. Baker serving
as Chairman.

DIRECTOR COMPENSATION

Directors who receive no other compensation from the Company receive a
$5,000 annual retainer, $1,000 for each Board meeting attended, and $1,000 for
each committee meeting not held in conjunction with a Board of Directors'
meeting. In accordance with the terms of the 1995 Non-Employee Directors Stock
Award and Option Plan, each of the current non-employee directors has
currently elected to receive shares of the Company's Class A Common Stock in
lieu of cash compensation for their service on the Board. In addition, each
non-employee director is granted an option to purchase 1,200 shares of Class A
Common Stock on the date he is elected or re-elected. Options have an exercise
price equal to the fair market value of the Company's Class A Common Stock as
of the grant date and vest over a three-year period.

30
<PAGE>

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth information concerning compensation paid or
accrued to the Co-Chairman of the Board and the four other most highly
compensated executive officers of the Company for the past three fiscal years:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ----------------
AWARDS PAYOUTS
-------- -------
NAME AND OTHER ANNUAL LTIP ALL OTHER
PRINCIPAL FISCAL SALARY BONUS COMPENSATION OPTIONS/ PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($)(1) SARS ($) ($) ($)(2)
--------- ------ ------- ------ ------------ -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Patrick E. Quinn........ 1997 500,000 -- 1,458 -- -- 3,505
Co-Chairman, 1996 500,000 -- 260 -- -- 3,364
President and Treasurer 1995 534,952 -- 6,065 -- -- 675,176(3)(4)
Max L. Fuller........... 1997 500,000 -- 1,594 -- -- 2,964
Co-Chairman, Vice 1996 500,000 -- 1,463 -- -- 2,848
President and Secretary 1995 534,952 -- 6,366 -- -- 651,192(3)(4)
L. D. Miller, III....... 1997 244,629 40,000 8,400 10,000 -- 43,375
Chairman, CSI/Crown 1996 211,578 25,000 8,400 -- -- 37,500
1995 228,089 -- 8,400 -- -- 42,746
William K. Farris....... 1997 135,962 -- 8,400 10,000 -- --
Executive Vice
President-- 1996 123,077 -- 5,600 -- -- --
Operations and
President, 1995 107,981 -- -- -- -- 30,523(4)
U.S. Xpress
E. William Lusk, Jr..... 1997 135,962 -- 8,400 10,000 41,712 3,090
Executive Vice 1996 123,077 -- 6,114 -- -- 3,090
President--Marketing 1995 107,981 -- 1,454 -- -- 33,612(4)
Thor N. Edman, Jr....... 1997 124,900 -- 8,400 10,000 -- 3,210
President, CSI/Crown 1996 72,116 -- 4,200 -- -- 2,049
1995 -- -- -- -- -- --
</TABLE>
- --------
(1) Amounts represent compensation for auto expenses.
(2) Amounts in 1997 represent the Company's contribution pursuant to the
Company's 401(k) Plan of $2,500, $2,500, $4,750, $3,090 and $3,210, for
each of Messrs. Quinn, Fuller, Miller, Lusk and Edman, respectively, and
life insurance premiums of $1,005, $464 and $38,625 paid by the Company
for Messrs. Quinn, Fuller and Miller, respectively.
(3) Amounts in 1995 include an annual payment of $406,875 for each of Messrs.
Quinn and Fuller pursuant to a compensation arrangement in which the
Company paid Messrs. Quinn and Fuller 0.5% of the total amount of the
Company's indebtedness and certain future operating lease payments that
were secured by their personal guarantees. As a result of the Company's
initial public offering in October 1994, the Company was able to obtain
the release of the personal guarantees of Messrs. Quinn and Fuller on the
Company's indebtedness and future operating lease commitments.
Accordingly, compensation related to such personal guarantees was
eliminated in January 1995.
(4) Amounts in 1995 also include the Company's contribution to a profit-
sharing plan of $205,403, $205,403, $30,523 and $30,705 for each of
Messrs. Quinn, Fuller, Farris and Lusk, respectively.

31
<PAGE>

OPTION EXERCISES AND HOLDINGS

The following table sets forth information with respect to the named
executives concerning the exercise of options during the last fiscal year and
unexercised options held as of March 31, 1997:

AGGREGATED EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
SHARES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED VALUE OPTIONS AT 3/31/97 OPTIONS AT 3/31/97
ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Patrick E. Quinn........ -- -- -- --
Max L. Fuller........... -- -- -- --
L.D. Miller, III........ -- -- 3,333/ 6,667 $ 23,747/$ 47,502
William K. Farris....... -- -- 25,341/39,680 $227,982/$353,863
E. William Lusk, Jr. ... 5,000 $41,712 20,341/39,680 $181,582/$353,863
Thor N. Edman, Jr. ..... -- -- 3,333/ 6,667 $ 23,747/$ 47,502
</TABLE>

The following table shows information concerning the individual grants of
stock options made during fiscal 1997 to each of the named executive officers
of the Company and the potential realizable values of the grants assuming
annually compounded stock price appreciation rates of 5% and 10% per annum
over the option term. The 5% and 10% rates of appreciation are set by the
rules of the Securities and Exchange Commission and are not intended to
forecast possible future appreciation, if any.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL
---------------------------------------------------- RATES OF STOCK
NUMBER OF PERCENT OF TOTAL PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION -----------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
---- ------------ ---------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Patrick E. Quinn........ -- -- -- -- -- --
Max L. Fuller........... -- -- -- -- -- --
L.D. Miller, III........ 10,000 10.31% $6.875 8/27/2006 $111,987 $178,320
William K. Farris....... 10,000 10.31% $6.875 8/27/2006 $111,987 $178,320
E. William Lusk, Jr. ... 10,000 10.31% $6.875 8/27/2006 $111,987 $178,320
Thor N. Edman, Jr. ..... 10,000 10.31% $6.875 8/27/2006 $111,987 $178,320
</TABLE>

SALARY CONTINUATION AGREEMENT

Messrs. Quinn and Fuller have each entered into an agreement with the
Company, pursuant to which the Company is obligated, in the event of either of
their deaths, to continue paying 50% of their current salary for a period of
six months and, in the event of either of their disabilities, to continue
paying their current salary in full for a period of 12 months and 50% of their
current salary for an additional 12 months thereafter. The agreements also
provide that Messrs. Quinn and Fuller will receive payments on account of
personal guarantees of Company indebtedness at the then current rate if either
of them or their estates personally guarantee any Company indebtedness.
Messrs. Quinn and Fuller have not personally guaranteed any Company
indebtedness since 1995, and do not expect to do so in the future.

32
<PAGE>

STOCK INCENTIVE PLAN

In November 1993, the Company adopted the U.S. Xpress Enterprises, Inc.
Incentive Stock Plan (the "Plan"). The Plan provides for the issuance of
shares of restricted common stock of the Company, as well as both incentive
and nonstatutory stock options. There may be issued under the Plan (as
restricted stock, in payment of performance grants, or pursuant to the
exercise of stock options) an aggregate of not more than the greater of (a)
1,038,138 shares of Class A Common Stock, or (b) 8% of the total number of
shares of Common Stock of all classes outstanding at any given time.
Participants in the Plan may include key employees as selected by the
Compensation Committee. Under the terms of the Plan, the Company may sell
restricted shares, grant options, or issue performance grants to participants
in amounts and for such prices as determined by the Compensation Committee.
All options will vest immediately in the event of a change in control of the
Company, or the death, disability, or retirement of the employee.

On November 30, 1993, 289,195 shares of restricted Class A Common Stock were
sold to employees at $4.72 per share, which approximated the fair market value
of the shares at the date of sale. Employees issued recourse notes payable to
the Company in the aggregate amount of $1,365,000 as payment for the
restricted shares. The notes bear interest at 6% and are due in three equal
annual installments beginning November 30, 1999. The restricted stock may not
be sold, assigned, transferred, pledged or otherwise disposed of during the
restriction period.

In fiscal 1995, the Board authorized, upon the completion of the Company's
initial public offering, the removal of the restrictions on 91,800 shares
scheduled to expire on November 30, 1995. In exchange for the removal of
restrictions on these shares, the affected employees repaid an aggregate of
$837,800 of the related recourse notes. During each of the years ended March
31, 1997, 1996 and 1995, 18,390 shares of restricted stock were forfeited, and
related recourse notes receivable of $44,900 were canceled. At March 31, 1997,
91,750 shares of restricted stock were outstanding. The restrictions expire on
November 30, 1997 and 1998. Restrictions also expire in the event of a change
in control of the Company or upon the death, disability or retirement of the
employee.

Effective as of July 3, 1997, the Board authorized the grant of options to
acquire 50,000 shares of Class A Common Stock at an exercise price of $18.75
per share and the issuance of 10,000 shares of restricted Class A Common Stock
to Mr. Harlin. The options vest ratably over five years from the first
anniversary date of grant. The restrictions on the restricted shares expire
ratably over five years from the first anniversary date of the issuance.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

There are no members of the Company's Compensation Committee who serve as a
member of another company's compensation committee. See "Certain Relationship
and Transactions" for a discussion of certain transactions between the Company
and certain members of the Board of Directors.

33
<PAGE>

CERTAIN RELATIONSHIPS AND TRANSACTIONS

The information set forth herein briefly describes certain transactions
between the Company and certain affiliated parties. The Company believes that
the terms of these transactions, are comparable to the terms that could be
obtained from unaffiliated parties. Future transactions, if any, with
affiliated parties will be approved by the Audit Committee and will be on
terms no less favorable to the Company than those that could be obtained from
unaffiliated parties.

Messrs. Quinn and Fuller together own 100% of Paragon Leasing, LLC
("Paragon"). Paragon purchases, sells and leases used tractors and trailers.
In fiscal 1997, the Company paid Paragon approximately $869,000 in rent for
leased trailers.

Messrs. Quinn and Fuller, together with the Quinn Family Partnership and the
Fuller Family Partnership, own approximately 43% of Transcom Technologies,
Inc. ("Transcom"). Transcom operates a debit card system that is marketed to,
among others, truck drivers through which long distance phone calls and
Internet e-mail access can be debited to the customer's account. The Company
purchases $10 per month of telephone time per tractor for its drivers through
Transcom, in lieu of reimbursing drivers for telephone expenses. Total
payments by the Company to Transcom in fiscal 1997 were $142,919.

Six terminals used by the Company during fiscal 1997 are owned by Q&F
Realty, LLC and California Q&F Realty, LLC, of which Messrs. Quinn and Fuller
own 100% of the membership interests, and leased to the Company, in
management's opinion, at fair market rent. In the aggregate, rental payments
to the LLCs from the Company and its subsidiaries in fiscal 1997 were
$1,639,000.

Substantially all of Messrs. Quinn and Fuller's business time is spent on
the Company's business and affairs. In the case of each of the other companies
in which Messrs. Quinn and Fuller own an interest, that company has other
active, full-time management personnel who operate that company's business.

During fiscal 1997, the Company incurred fees for legal services to the law
firm of Miller & Martin, of which A. Alexander Taylor, II, a director of the
Company, is a partner.

34
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the ownership of the
Class A and Class B Common Stock as of August 13, 1997 and as adjusted to
reflect the sale of the shares of Class A and Class B Common Stock offered
hereby with respect to (i) each person known by the Company to own
beneficially more than 5% of the outstanding shares of either class of Common
Stock, (ii) each director and nominee, (iii) the Co-Chairmen of the Board and
the four other most highly compensated executive officers who earned in excess
of $100,000 during the 1997 fiscal year, and (iv) all directors and executive
officers as a group. Unless otherwise indicated, each of the stockholders has
sole voting and investment power with respect to the shares beneficially
owned.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES TO BE BENEFICIALLY
OWNED BEFORE OFFERING OWNED AFTER OFFERING
----------------------------- SHARES -----------------------------
PERCENT OFFERED PERCENT
NAME CLASS A CLASS B (1)(2)(3) NUMBER CLASS A CLASS B (1)(2)(3)
---- --------- --------- --------- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Max L. Fuller(4)(6)..... 2,800,018 1,520,131 35.7 450,000 2,350,018 1,520,131 26.5
Patrick E. Quinn(5)(6).. 2,674,539 1,520,131 34.6 405,084 2,269,455 1,520,131 25.9
Quinn Family
Partnership............ 444,916 -- 3.7 44,916 400,000 -- 2.7
J. & W. Seligman and
Co., Incorporated(7)... 1,449,889 -- 12.0 1,449,889 -- 9.9
William K. Farris(1).... 52,021 -- * 52,021 -- *
E. William Lusk,
Jr.(1)................. 47,021 -- * 47,021 -- *
Ray M. Harlin........... 10,000 -- * 10,000 -- *
James B. Baker(1)(8).... 5,905 -- * 5,905 -- *
A. Alexander
Taylor, II(1).......... 4,405 -- * 4,405 -- *
Thor N. Edman, Jr.(1)... 3,333 -- * 3,333 -- *
L.D. Miller, III(1)(9).. 3,333 -- * 3,333 -- *
All Executive Officers
and Directors as a
Group (11 Persons)..... 5,623,737 3,040,262 71.4 4,768,653 3,040,262 53.4
</TABLE>
- --------
* Less than 1% of the Class A and Class B Common Stock.
(1) Share amounts include shares issuable pursuant to stock options that are
exercisable within 60 days of August 13, 1997 held by the following
individuals: Mr. Farris--15,341 shares, Mr. Lusk--10,341 shares, Mr.
Edman--3,333 shares, Mr. Baker--800 shares and Mr. Taylor--800 shares.
(2) Percentage of total number of outstanding shares of both Class A and Class
B Common Stock.
(3) For the purpose of computing the percentage of outstanding shares owned by
each beneficial owner, the shares issuable pursuant to presently
exercisable stock options held by such beneficial owner are deemed to be
outstanding. Such options are not deemed to be outstanding for the purpose
of computing the percentage owned by any other person.
(4) Does not include 444,916 shares of Class A Common stock held by the Fuller
Family Partnership, as to which shares Mr. Fuller disclaims beneficial
ownership.
(5) Does not include 444,916 shares of Class A Common Stock held by the Quinn
Family Partnership, as to which shares Mr. Quinn disclaims beneficial
ownership.
(6) The principal business address for Messrs. Quinn and Fuller is 2931 South
Market Street, Chattanooga, Tennessee 37410.
(7) The principal business address of J. & W. Seligman and Co., Incorporated
is 100 Park Avenue, New York, New York 10017. The reported information is
based upon the Schedule 13G filed by J. & W. Seligman and Co.,
Incorporated with the Securities and Exchange Commission on February 13,
1997.
(8) Does not include 500 shares of Class A Common Stock held by Mr. Baker's
son, as to which shares Mr. Baker disclaims beneficial ownership.
(9) Does not include a total of 6,000 shares of Class A Common Stock held by
Mr. Miller's wife and two children, as to which shares Mr. Miller
disclaims beneficial ownership.

35
<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company is authorized to issue up to 30,000,000 shares of Class A Common
Stock, par value $0.01 per share, 7,500,000 shares of Class B Common Stock,
par value $0.01 per share and up to 2,000,000 shares of preferred stock, par
value $0.01 per share. As of August 13, 1997, 9,087,007 shares of Class A
Common Stock and 3,040,262 shares of Class B Common Stock were issued and
outstanding. No shares of preferred stock have been issued.

CLASS A AND CLASS B COMMON STOCK

Voting. Holders of Class A Common Stock are entitled to one vote per share.
Holders of Class B Common Stock are entitled to two votes per share. All
actions submitted to a vote of stockholders are voted on by holders of Class A
and Class B Common Stock voting together as a single class, except as
otherwise set forth below or provided by law.

Conversion. Class A Common Stock has no conversion rights. Class B Common
Stock may be converted into Class A Common Stock, in whole or in part, at any
time and from time to time on the basis of one share of Class A Common Stock
for each share of Class B Common Stock. If at any time any shares of Class B
Common Stock are beneficially owned by any person other than Messrs. Fuller
and Quinn (or certain immediate family members), such shares shall
automatically be converted into an equal number of shares of Class A Common
Stock.

Dividends. Holders of Class A Common Stock are entitled to receive cash
dividends on the same basis as Class B Common Stock if and when such dividends
are declared by the Board of Directors of the Company from funds legally
available therefor. In the case of any dividend paid in stock, holders of
Class A Common Stock are entitled to receive the same percentage dividend
(payable in shares of Class A Common Stock) as the holders of Class B Common
Stock receive (payable in shares of Class B Common Stock).

Liquidation. Holders of Class A and Class B Common Stock share with each
other on a ratable basis as a single class in the net assets of the Company
available for distribution in respect of Class A and Class B Common Stock in
the event of liquidation.

Other Terms. Neither the Class A nor the Class B Common Stock may be
subdivided, consolidated, reclassified or otherwise changed unless
contemporaneously therewith the other class of shares is subdivided,
consolidated, reclassified or otherwise changed in the same proportion and in
the same manner.

In any merger, consolidation or business combination, the consideration to
be received per share by holders of either Class A or Class B Common Stock
must be identical to that received by holders of the other class of Common
Stock, except that in any such transaction in which shares of capital stock
are distributed, such shares may differ as to voting rights only to the extent
that voting rights now differ between Class A and Class B Common Stock.

The rights, preferences and privileges of holders of both classes of Common
Stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of Preferred Stock which the Company may
designate and issue in the future.

PREFERRED STOCK

The Board of Directors of the Company is authorized, without further action
of the stockholders of the Company, to issue up to 2,000,000 shares of
preferred stock in classes or series and to fix the voting powers,
designations, preferences or other rights of the shares of each such class or
series and the qualifications, limitations and restrictions thereon. Such
preferred stock may rank prior to the Common Stock as to dividend rights,
liquidation preferences or both, may have full or limited voting rights and
may be convertible into shares of either class of the Company's Common stock.

36
<PAGE>

The purpose of authorizing the Board of Directors to issue preferred stock
is, in part, to eliminate delays associated with a stockholder vote in
specific instances. The issuance of preferred stock, for example in connection
with a stockholder rights plan, could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
acquiring, a majority of the outstanding existing stock of the Company.

The Company has no present plans to issue any shares of the preferred stock.

CERTAIN PROVISIONS OF RESTATED ARTICLES AND BYLAWS

Provisions with Anti-takeover Implications. A number of provisions of the
Company's Restated Articles and Bylaws deal with matters of corporate
governance and the rights of stockholders. The Company's Restated Articles
provide the Board of Directors the ability to issue shares of preferred stock
and to set the voting rights, preferences and other terms thereof. This
ability afforded to the Board of Directors by the Restated Articles may be
deemed to have an anti-takeover effect and may discourage takeover attempts
not first approved by the Board of Directors (including takeovers which
certain stockholders may deem to be in their best interest). To the extent
takeover attempts are discouraged, temporary fluctuations in the market price
of the Company's Class A Common Stock, which may result from actual or rumored
takeover attempts, will be inhibited.

The Company's Bylaws provide that a special meeting of stockholders may be
called only by the Chairman of the Board of the Company, if one is elected, by
the President or by a majority of the directors. The Company's Bylaws provide
that only those matters set forth in the notice of the special meeting may be
considered or acted upon at that special meeting. The Company's Bylaws also
set forth certain advance notice or information requirements and time
limitations on any director nomination or any new business which a stockholder
wishes to propose for consideration at an annual or special meeting of
stockholders. Any such nomination or new business must be stated in writing
and filed with the Secretary of the Company (a) at least 30 days before the
anniversary date of the notice of the immediately preceding annual meeting of
stockholders; or (b) in the event of a special meeting, at least 10 days after
notice of such special meeting. The notice must contain certain information
relating to the nominee for director or new business proposal. The Board of
Directors of the Company may reject any nomination or new business proposal
not timely made or supported by insufficient information.

The foregoing provisions, together with the provisions of the Nevada General
Corporation Law discussed below (see Statutory Business Combination
Provision), also could discourage or make more difficult a merger, tender
offer or proxy contest, even if they could be favorable to the interests of
stockholders, and could potentially depress the market price of the Class A
Common Stock. The Board of Directors of the Company adopted these provisions
upon the recommendation of management that these provisions are appropriate to
protect the interests of the Company and all of its stockholders.

Indemnification. The Company's Bylaws provide that directors and officers of
the Company will be indemnified by the Company to the fullest extent
authorized by Nevada law, as it now exists or may in the future be amended,
against all expenses and liabilities reasonably incurred in connection with
service for or on behalf of the Company. The Bylaws of the Company also
provide that the right of directors and officers to indemnification is not
exclusive of any other right now possessed or hereafter acquired under any
statute, agreement or otherwise.

Limitation of Liability. The Restated Articles provide that to the fullest
extent permitted by Nevada law directors and officers of the Company are not
personally liable for monetary damages to the Company for certain breaches of
their fiduciary duty as directors or officers. This provision would have no
effect on the availability of equitable remedies or non-monetary relief, such
as an injunction or rescission for breach of the duty of care. In addition,
the provision applies only to claims against a director or officer arising out
of his role as a director or officer and not in any other capacity. Further,
liability of a director or officer for violations of the federal securities
laws are not limited by this provision. Directors and officers, however, will
no longer be liable for monetary damages arising from decisions involving
violations of the duty of care which could be deemed grossly negligent.

37
<PAGE>

STATUTORY BUSINESS COMBINATION PROVISION

The Company is subject to the provisions of Section 78.411 et seq. of the
Nevada General Corporation Law ("Business Combination Act"). The Business
Combination Act provides, with certain exceptions, that a Nevada corporation
may not engage in any of a broad range of business combinations with a person
or affiliate, or associate of such person, who is an "interested stockholder"
for a period of three years from the date that such person became an
interested stockholder, unless the transaction resulting in a person becoming
an interested stockholder, or the business combination, is approved by the
board of directors of the corporation before the person becomes an interested
stockholder.

The Business Corporation Act further provides that a Nevada corporation may
not engage in such a business combination after the expiration of three years
from the date that such person became an interested stockholder, unless the
business combination is approved by the board of directors of the corporation
before the person became an interested stockholder or by the affirmative vote
of a majority of outstanding votes not beneficially owned by the interested
stockholder at a meeting called not earlier than three years after the
interested stockholder's date of acquiring shares.

Under the Business Combination Act, an "interested stockholder" is defined
as any person that is (i) the owner of 10% or more of the outstanding voting
stock of the corporation or (ii) an affiliate or associate of the corporation
and was the owner of 10% or more of the outstanding voting stock of the
corporation at any time within the three year period immediately prior to the
date on which it is sought to be determined whether such person is an
interested stockholder.

At its option, a corporation may exclude itself from the coverage of the
Business Combination Act by amending its Restated Articles by action of its
stockholders, other than interested stockholders and their affiliates and
associates, to exempt itself from coverage, provided that such charter
amendment may not become effective until 18 months after the date it is
adopted and does not apply to any combination of the corporation with an
interested stockholder whose date of acquiring shares is on or before the
effective date of the amendment. The Company has not adopted such an amendment
to its Restated Articles.

TRANSFER AGENT AND REGISTRAR

Boston EquiServe, L.P. is the Transfer Agent and Registrar for the Class A
Common Stock.

38
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have outstanding
11,587,007 shares of Class A Common Stock and 3,040,262 shares of Class B
Common Stock that may be converted into Class A Common Stock. Of these shares,
all of the 3,400,000 shares (3,910,000 shares if the Underwriters' over-
allotment option is exercised in full) sold in this offering will be and the
3,335,000 shares sold in the Company's initial public offering are freely
transferable by persons other than "affiliates" of the Company, without
restriction or further restriction under the Securities Act.

The remaining 4,852,007 shares of Class A Common Stock and all of the shares
of Class B Common Stock that may be converted into Class A Common Stock
outstanding are "restricted securities" within the meaning of Rule 144 ("Rule
144") under the Securities Act and may not be sold in the absence of
registration under the Securities Act unless an exemption from registration is
available, including the exemption contained in Rule 144. Certain principal
stockholders and the officers and directors of the Company, beneficially
holding an aggregate of 8,653,831 shares, and the Company have agreed, subject
to certain exceptions, not to sell or otherwise dispose of such shares, for 90
days after the date of this offering without the prior written consent of
Alex. Brown & Sons Incorporated.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned his or her shares for
at least one year, including an "affiliate" of the Company (as that term is
defined under the Securities Act), is entitled to sell, within any three-month
period, that number of shares that does not exceed the greater of (i) 1% of
the then outstanding shares of Class A Common Stock of the Company or (ii) the
average weekly trading volume of the then outstanding shares during the four
calendar weeks preceding each such sale. A person (or persons whose shares are
aggregated) who is not deemed an "affiliate" of the Company and who has
beneficially owned shares for at least two years is entitled to sell such
shares under Rule 144 without regard to the volume limitations described
above. Affiliates, including members of the Board of Directors and senior
management, continue their respective to be subject to such limitations.

No predictions can be made of the effect, if any, that market sales of
restricted securities or the availability of restricted securities for sale
will have on the market price prevailing from time to time. Nevertheless,
sales of substantial amounts of the Class A Common Stock in the public market,
or the perception that such sales could occur, could have an adverse impact on
the market price.

39
<PAGE>

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below (the "Underwriters"), through their Representatives,
Alex. Brown & Sons Incorporated, Morgan Stanley & Co. Incorporated, Schroder &
Co. Inc. and Morgan Keegan & Company, Inc. (the "Representatives"), have
severally agreed to purchase from the Company the following respective number
of shares of Common Stock at the initial public offering price less the
underwriting discounts and commission set forth on the cover page of this
Prospectus.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Alex. Brown & Sons Incorporated....................................
Morgan Stanley & Co. Incorporated..................................
Schroder & Co. Inc. ...............................................
Morgan Keegan & Company, Inc. .....................................
---------
Total............................................................ 3,400,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will
purchase the total number of shares of Class A Common Stock offered hereby if
any of such shares are purchased.

The Company and certain of the Selling Stockholders have been advised by the
Representatives of the Underwriters that the Underwriters propose to offer the
shares of Class A Common Stock to the public at the public offering price set
forth on the cover page of this Prospectus and to certain dealers at such
price less a concession not in excess of $ per share. The Underwriters may
allow, and such dealers may reallow, a concession not to exceed $ per share
to certain other dealers. After commencement of the public offering, the
offering price and other selling terms may be changed by Representatives of
the Underwriters.

The Company and the Selling Stockholders have granted to the Underwriters an
option, exercisable not later than 30 days after the date of this Prospectus,
to purchase up to 442,500 and 67,500 shares of the Class A Common Stock,
respectively, at the public offering price set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will have a firm commitment to purchase approximately the
same percentage thereof that the number of shares of Class A Common Stock
purchased by each of them as shown in the above table, bears to 3,400,000, and
the Selling Stockholders will be obligated, pursuant to the option, to sell
such shares to the Underwriters. The Underwriters may exercise such option
only to cover over-allotments made in connection with the sale of the Class A
Common Stock offered hereby. If purchased, the Underwriters will offer such
additional shares on the same terms as those on which the 3,400,000 shares are
being offered.

In connection with this offering, certain Underwriters may engage in passive
market making transactions in the Class A Common Stock on The Nasdaq National
Market immediately prior to the commencement of sales in this offering in
accordance with Rule 103 of Regulation M. Passive market making consists of
displaying bids on The Nasdaq National Market limited by the bid prices of
independent market makers and making purchases limited by such prices and
effected in response to order flow. Net purchases by a passive market maker on
each day are limited to a specified percentage of the passive market maker's
average daily trading volume in the Class A Common Stock during a specified
period and must be discontinued when such limit is reached. Passive market
making may stabilize the market price of the Class A Common Stock at a level
above that which might otherwise prevail and, if commenced, may be
discontinued at any time.

40
<PAGE>

Subject to applicable limitations, the Underwriters, in connection with this
offering, may place bids for or make purchases of the Class A Common Stock in
the open market or otherwise, for long or short account, or cover short
positions incurred, to stabilize, maintain or otherwise affect the price of
the Class A Common Stock, which may be higher than the price that might
otherwise prevail in the open market. There can be no assurance that the price
of the Class A Common Stock will be stabilized, or that stabilizing, if
commenced, will not be discontinued at any time. Subject to applicable
limitations, the Underwriters may also place bids or make purchases on behalf
of the underwriting syndicate to reduce a short position created in connection
with this offering. The Underwriters are not required to engage in these
activities and may end these activities at any time.

The Underwriting Agreement contains covenants of indemnity and contribution
between the Underwriters and the Company and the Selling Stockholders with
respect to certain civil liabilities, including liabilities under the
Securities Act.

Certain of the Company's principal stockholders and the directors and
officers, who following the offering will beneficially own an aggregate of
5,613,569 shares of Class A Common Stock and 3,040,262 shares of Class B
Common Stock, and the Company have agreed not to offer, sell or otherwise
dispose of any of such Common Stock or any shares of Common Stock issuable
upon exercise of any options for Common Stock for a period of 90 days after
the date of this Prospectus without the prior written consent of Alex. Brown &
Sons Incorporated.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Miller & Martin, Chattanooga, Tennessee. A. Alexander
Taylor, II, a Director of the Company, is a partner in the law firm of Miller
& Martin. Certain legal matters in connection with this offering are being
passed upon for the Underwriters by Piper & Marbury L.L.P., Baltimore,
Maryland.

EXPERTS

The consolidated financial statements and schedules included in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.

41
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants.................................. F-2
Consolidated Statements of Operations for the Years Ended March 31, 1995,
1996 and 1997 and the Three Months Ended June 30, 1996 and 1997
(Unaudited).............................................................. F-3
Consolidated Balance Sheets as of March 31, 1996 and 1997 and June 30,
1997 (Unaudited)......................................................... F-4
Consolidated Statements of Cash Flows for the Years Ended March 31, 1995,
1996 and 1997 and the Three Months Ended June 30, 1996 and 1997
(Unaudited).............................................................. F-5
Consolidated Statements of Stockholders' Equity for the Years Ended March
31, 1995, 1996
and 1997 and the Three Months Ended June 30, 1996 and 1997 (Unaudited)... F-6
Notes to Consolidated Financial Statements................................ F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of U.S. Xpress Enterprises, Inc.:

We have audited the accompanying consolidated balance sheets of U.S. Xpress
Enterprises, Inc. (a Nevada corporation) and subsidiaries as of March 31, 1996
and 1997 and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the three years in the period ended March
31, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of U.S. Xpress Enterprises,
Inc. and subsidiaries as of March 31, 1996 and 1997 and the results of their
operations and their cash flows for each of the three years in the period
ended March 31, 1997 in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Chattanooga, Tennessee
May 7, 1997

F-2
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
FOR THE THREE MONTHS
YEARS ENDED MARCH 31, ENDED JUNE 30,
---------------------------- -----------------
1995 1996 1997 1996 1997
-------- -------- -------- ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Operating Revenue............ $254,331 $299,697 $362,819 $87,817 $107,933
-------- -------- -------- ------- --------
Operating Expenses:
Salaries, wages and employee
benefits, including
contract wages............. 108,074 129,311 148,850 36,208 43,758
Fuel and fuel taxes......... 42,586 48,782 61,268 14,351 16,450
Vehicle rents............... 16,767 17,263 21,603 4,706 7,224
Depreciation and
amortization............... 15,070 16,765 14,492 4,316 3,172
Purchased transportation.... 10,493 19,929 22,682 6,394 8,843
Operating expenses and
supplies................... 17,398 21,321 22,503 6,119 6,926
Insurance premiums and
claims..................... 10,457 12,874 15,265 4,289 3,550
Operating taxes and
licenses................... 4,608 5,227 5,984 1,453 1,700
Communications and
utilities.................. 4,332 5,343 6,301 1,547 1,874
Cost of installation
supplies sold.............. -- 5,214 8,180 2,191 1,839
Building rental............. 2,063 3,495 4,878 1,192 1,446
Bad debt expense............ 543 784 880 208 304
General and other operating
expenses................... 6,949 9,582 11,506 2,655 3,461
Gain on sales of equipment.. (2,979) (1,320) (1,289) (53) (649)
Equity in earnings of
unconsolidated affiliate... (189) (124) -- -- --
-------- -------- -------- ------- --------
Total operating expenses... 236,172 294,446 343,103 85,576 99,898
-------- -------- -------- ------- --------
Income from Operations....... 18,159 5,251 19,716 2,241 8,035
-------- -------- -------- ------- --------
Other Income (Expense):
Interest expense, net....... (4,796) (5,251) (5,542) (1,352) (1,582)
Other income, net........... 194 75 62 7 11
-------- -------- -------- ------- --------
Total other expense........ (4,602) (5,176) (5,480) (1,345) (1,571)
-------- -------- -------- ------- --------
Income Before Income Tax
Provision................... 13,557 75 14,236 896 6,464
Income Tax (Provision)
Benefit..................... (5,294) 19 (6,358) (344) (2,585)
-------- -------- -------- ------- --------
Net Income................... $ 8,263 $ 94 $ 7,878 $ 552 $ 3,879
======== ======== ======== ======= ========
Earnings Per Share........... $ .76 $ .01 $ .65 $ .05 $ .32
======== ======== ======== ======= ========
Weighted Average Common
Shares and Common Share
Equivalents Outstanding..... 10,806 12,003 12,168 12,135 12,221
======== ======== ======== ======= ========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-3
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
MARCH 31,
------------------ JUNE 30,
1996 1997 1997
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents..................... $ 4,378 $ 5,092 $ 5,270
Customer receivables, net of allowance of
$3,033 at March 31, 1996, $2,733 at March 31,
1997 and $3,024 at June 30, 1997............. 41,910 50,056 60,307
Other receivables............................. 4,318 3,969 2,284
Prepaid insurance and licenses................ 4,837 3,853 2,936
Operating and installation supplies........... 4,033 4,904 4,308
Deferred income taxes......................... 3,888 4,443 4,443
Other current assets.......................... 482 719 664
-------- -------- --------
Total current assets....................... 63,846 73,036 80,212
-------- -------- --------
Property and Equipment, at cost
Land and buildings............................ 2,232 2,717 5,955
Revenue and service equipment................. 126,501 112,076 114,322
Furniture and equipment....................... 10,325 11,265 12,394
Leasehold improvements........................ 5,086 7,619 10,140
-------- -------- --------
144,144 133,677 142,811
Less accumulated depreciation and
amortization................................. (39,702) (39,803) (41,937)
-------- -------- --------
Net property and equipment................. 104,442 93,874 100,874
-------- -------- --------
Other Assets
Goodwill, net................................. 6,579 7,700 12,813
Other......................................... 2,954 3,474 4,688
-------- -------- --------
Total other assets......................... 9,533 11,174 17,501
-------- -------- --------
Total Assets............................... $177,821 $178,084 $198,587
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable.............................. $ 10,025 $ 8,708 $ 9,912
Accrued wages and benefits.................... 5,543 5,086 5,723
Claims and insurance accruals................. 11,465 9,601 7,714
Other accrued liabilities..................... 3,378 2,804 5,472
Current maturities of long-term debt.......... 13,829 13,008 12,666
-------- -------- --------
Total current liabilities.................. 44,240 39,207 41,487
-------- -------- --------
Long-Term Debt, net of current maturities...... 61,789 59,318 73,067
-------- -------- --------
Deferred Income Taxes.......................... 10,885 14,543 14,543
-------- -------- --------
Other Long-Term Liabilities.................... 5,821 1,854 2,279
-------- -------- --------
Commitments and Contingencies (Notes 6 and 8)
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, 9,034,884 and
9,046,044 shares issued and outstanding at
March 31, 1996 and 1997, respectively, and
9,077,007 shares issued and outstanding at
June 30, 1997................................ 89 90 90
Common Stock Class B, $.01 par value,
7,500,000 shares authorized, 3,040,262 shares
issued and outstanding at March 31, 1996 and
1997 and at June 30, 1997.................... 30 30 30
Additional paid-in capital.................... 33,774 33,832 34,002
Retained earnings............................. 21,565 29,443 33,322
Notes receivable from stockholders............ (372) (233) (233)
-------- -------- --------
Total stockholders' equity................. 55,086 63,162 67,211
-------- -------- --------
Total Liabilities and Stockholders'
Equity.................................... $177,821 $178,084 $198,587
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-4
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
FOR THE YEARS ENDED MARCH 31, ENDED JUNE 30,
------------------------------- -----------------
1995 1996 1997 1996 1997
--------- --------- --------- ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash Flows from Operating
Activities:
Net income................ $ 8,263 $ 94 $ 7,878 $ 552 $ 3,879
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities:
Deferred income tax
provision.............. 1,953 2,737 3,103 -- --
Depreciation and
amortization........... 15,070 16,765 14,492 4,316 3,172
Gain on sales of
equipment.............. (2,979) (1,320) (1,289) (53) (649)
Equity in earnings of
unconsolidated
affiliate.............. (189) (124) -- -- --
Increase in
receivables............ (3,279) (9,674) (7,309) (7,394) (5,361)
(Increase) decrease in
prepaid insurance and
licenses............... (1,484) (497) 984 2,415 1,379
(Increase) decrease in
operating supplies..... 10 (688) (575) 82 634
(Increase) decrease in
other assets........... 190 (559) (1,141) (140) (243)
Increase (decrease) in
accounts payable and
other accrued
liabilities............ 2,669 3,606 (7,722) 1,194 (285)
Increase (decrease) in
accrued wages and
benefits............... 2,190 (1,317) (457) (1,424) 593
Other................... -- 16 18 4 2
--------- --------- --------- ------- --------
Net cash provided by
(used in) operating
activities.............. 22,414 9,039 7,982 (448) 3,121
--------- --------- --------- ------- --------
Cash Flows from Investing
Activities:
Payments for purchases of
property and equipment... (61,072) (28,247) (24,868) (5,291) (3,912)
Proceeds from sales of
property and equipment... 17,582 17,383 24,618 1,086 7,414
Repayment of notes
receivable from
stockholders............. 838 -- 94 -- --
Acquisition of business,
net of cash acquired..... (308) (6,227) (3,048) -- (4,990)
Acquisition of remaining
50% of unconsolidated
affiliate, net of cash
acquired................. -- (239) -- -- --
--------- --------- --------- ------- --------
Net cash used in
investing activities.... (42,960) (17,330) (3,204) (4,205) (1,488)
--------- --------- --------- ------- --------
Cash Flows from Financing
Activities:
Net borrowings (payments)
under lines of credit.... (7,158) 30,325 1,000 3,000 2,000
Payment of long-term
debt..................... (31,305) (36,355) (26,450) (3,420) (21,212)
Borrowings under long-term
debt..................... 32,215 11,468 21,300 2,225 17,590
Proceeds from exercise of
stock options............ -- -- 128 -- 168
Proceeds from issuance of
common stock............. 31,588 -- -- -- --
Repurchase of restricted
common stock............. (42) (42) (42) -- --
Increase (decrease) in
other liabilities........ 481 906 -- (736) --
--------- --------- --------- ------- --------
Net cash provided by
(used in) financing
activities.............. 25,779 6,302 (4,064) 1,069 (1,454)
--------- --------- --------- ------- --------
Net Increase (Decrease) in
Cash and Cash
Equivalents............... 5,233 (1,989) 714 (3,584) 179
Cash and Cash Equivalents,
beginning of period....... 1,134 6,367 4,378 4,378 5,091
--------- --------- --------- ------- --------
Cash and Cash Equivalents,
end of period............. $ 6,367 $ 4,378 $ 5,092 $ 794 $ 5,270
========= ========= ========= ======= ========
Supplemental Disclosure of
Cash Flow Information:
Cash paid during the
period for interest...... $ 5,227 $ 5,198 $ 5,643 $ 1,514 $ 1,509
========= ========= ========= ======= ========
Cash paid (refunded)
during the period for
income taxes, net........ $ 2,621 $ (470) $ 2,766 $ 142 $ 1,161
========= ========= ========= ======= ========
Supplemental Disclosure of
Significant Noncash
Investing and Financing
Activities:
Issuance of long-term debt
in connection with
purchase of business...... $ 600 $ -- $ 792 $ -- $ --
========= ========= ========= ======= ========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-5
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
NOTES
COMMON STOCK ADDITIONAL RECEIVABLE
--------------- PAID-IN RETAINED FROM
CLASS A CLASS B CAPITAL EARNINGS STOCKHOLDERS TOTAL
------- ------- ---------- -------- ------------ -------
<S> <C> <C> <C> <C> <C> <C>
Balance, March 31,
1994................... $73 $22 $ 1,433 $13,208 $(1,300) $13,436
Net income............. -- -- -- 8,263 -- 8,263
Conversion of 815,680
shares of Class A
Common Stock to Class
B Common Stock........ (8) 8 -- -- -- --
Issuance of 2,500,000
shares of Class A
Common Stock in
initial public
offering.............. 25 -- 31,563 -- -- 31,588
Repayment of notes
receivable from
stockholders.......... -- -- -- -- 838 838
Repurchase of 18,390
shares of restricted
stock................. (1) -- (87) -- 45 (43)
--- --- ------- ------- ------- -------
Balance, March 31,
1995................... 89 30 32,909 21,471 (417) 54,082
Net income............. -- -- -- 94 -- 94
Repurchase of 18,390
shares of restricted
stock................. (1) -- (87) -- 45 (43)
Issuance of 1,744
shares of Class A
Common Stock for non-
employee director
compensation.......... -- -- 16 -- -- 16
Issuance of 110,182
shares of Class A
Common Stock for
purchase of Hall
Systems............... 1 -- 936 -- -- 937
--- --- ------- ------- ------- -------
Balance, March 31,
1996................... 89 30 33,774 21,565 (372) 55,086
Net income............. -- -- -- 7,878 -- 7,878
Repurchase of 18,390
shares of restricted
stock................. -- -- (87) -- 45 (42)
Repayment of notes
receivable from
stockholders.......... -- -- -- -- 94 94
Issuance of 2,542
shares of Class A
Common Stock for non-
employee director
compensation.......... -- -- 18 -- -- 18
Proceeds from exercise
of 27,008 stock
options............... 1 -- 127 -- -- 128
--- --- ------- ------- ------- -------
Balance, March 31,
1997................... $90 $30 $33,832 $29,443 $ (233) $63,162
Net income (unaudited).. -- -- -- 3,879 -- 3,879
Issuance of 180 shares
of Class A Common Stock
for non-employee
director compensation
(unaudited)............ -- -- 2 -- -- 2
Proceeds from exercise
of 30,833 stock options
(unaudited)............ -- -- 168 -- -- 168
--- --- ------- ------- ------- -------
Balance, June 30, 1997
(unaudited)............ $90 $30 $34,002 $33,322 $ (233) $67,211
=== === ======= ======= ======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-6
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND OPERATIONS

U. S. Xpress Enterprises, Inc. (the "Company") provides transportation
services through two subsidiaries. U.S. Xpress, Inc. ("U.S. Xpress") is a
truckload carrier serving the Continental United States, Canada and Mexico.
CSI/Crown, Inc. ("CSI/Crown") provides transportation and logistics services
to the floorcovering industry.

2. ACQUISITIONS

Effective March 31, 1994, the Company acquired 50% of the outstanding stock
of Hall Systems, Inc. ("Hall Systems") for $625,000 cash and a $625,000 note
payable. Effective October 31, 1995, the Company acquired the remaining 50% of
the outstanding stock of Hall Systems for $1,000,000 cash and 110,182 shares
of the Company's Class A Common Stock in a transaction accounted for by the
purchase method of accounting.

Effective August 31, 1995, the Company acquired 100% of the outstanding
stock of CSI/Reeves, Inc. ("CSI/Reeves") for cash of $6,240,000 in a
transaction accounted for by the purchase method of accounting. Effective
January 1, 1996, CSI/Reeves was merged into the Company's existing freight
consolidator (Crown Transport Systems, Inc.) to form CSI/Crown, Inc.

The results of operations of CSI/Reeves and Hall Systems are included in the
accompanying consolidated financial statements from the dates of their
respective acquisition. On a pro forma (unaudited) basis, operating revenue
for the Company would have been approximately $310 million and $332 million,
respectively, for fiscal 1995 and 1996, had the acquisitions taken place at
the beginning of the respective periods. The impact on net income and earnings
per share is insignificant. This information is for comparative purposes only
and does not purport to be indicative of the results of operations had the
transactions been completed at the beginning of the respective periods or
indicative of the results which may occur in the future.

In June 1996, the Company acquired certain equipment and the right to
fulfill a contract to provide expedited truckload services in the Western
United States to a major air freight company from Michael Lima Transportation
for $3,048,000 cash and a $792,000 note payable. In addition, $1,000,000 will
be paid to the seller if the Company is able to extend the contract. The pro
forma effect of this transaction on prior period financial statements is
immaterial. Subsequent to March 31, 1997, the Company acquired eight
distribution centers and certain equipment from Rosedale Transport, Inc. and
acquired JTI, Inc. The pro forma effect of these transactions on the results
of operations for the three months ended June 30, 1996 and 1997 is immaterial.

3. 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.

Use of Estimates in the Preparation of Financial Statements. The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Cash and Cash Equivalents. Cash and cash equivalents include all highly
liquid investment instruments with an original maturity of three months or
less.

F-7
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Recognition of Revenue. For financial reporting purposes, the Company
recognizes revenue and direct cost when shipments are completed.

Concentration of Credit Risk. Concentrations of credit risk with respect to
customer receivables are limited due to the large number of entities
comprising the Company's customer base and their dispersion across many
different industries. The Company performs ongoing credit evaluations and
generally does not require collateral.

Operating and Installation Supplies. Operating supplies consist primarily of
tires, parts, materials and supplies for servicing the Company's revenue and
service equipment. Installation supplies consist of various accessories used
in the installation of floorcoverings and are held for sale at various
CSI/Crown distribution centers. Operating and installation supplies are
recorded at the lower of cost (on a first-in, first-out basis) or market.
Tires and tubes purchased as part of revenue and service equipment are
capitalized as part of the cost of the equipment. Replacement tires and tubes
are charged to expense when placed in service.

Property and Equipment. Property and equipment is carried at cost.
Depreciation and amortization of property and equipment are 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:

<TABLE>
<S> <C>
Buildings..................................................... 10-30 years
Revenue and service equipment................................. 3-7 years
Furniture and equipment....................................... 3-7 years
Leasehold improvements........................................ 5-6 years
</TABLE>

The Company recognized $14,813,000, $16,066,000 and $13,837,000 in
depreciation expense during the years ended March 31, 1995, 1996 and 1997,
respectively. 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.

Expenditures for normal maintenance and repairs are expensed. Renewals or
betterments that affect the nature of an asset or increase its useful life are
capitalized.

Goodwill. The excess of the consideration paid by the Company over the
estimated fair value of net assets acquired has been recorded as goodwill and
is being amortized on the straight-line basis over periods ranging from 20 to
40 years. The Company continually evaluates whether subsequent events and
circumstances have occurred that indicate that the remaining estimated useful
life of goodwill may warrant revision or that the remaining balance may not be
recoverable. When factors indicate that goodwill should be evaluated for
possible impairment, the Company uses an estimate of the future undiscounted
net cash flows of the related businesses over the remaining life of the
goodwill in measuring whether goodwill is recoverable. The Company recognized
$204,000, $220,000 and $272,000 of goodwill amortization expense during the
years ended March 31, 1995, 1996 and 1997, respectively. Accumulated
amortization was $756,000 and $1,028,000 at March 31, 1996 and 1997,
respectively.

Claims and Insurance Accruals. The primary claims in the Company's business
are cargo loss and damage, physical damage and automobile liability. Prior to
January 1, 1997, most of the Company's insurance provided for large self-
insurance levels with excess coverage sufficient to protect the Company from
catastrophic claims. Beginning January 1997, the Company began purchasing
policies with low deductibles which essentially fully insure cargo and auto
liability, while physical damage has an annual aggregate deductible. For
claims with self-insurance levels, estimated costs are accrued based upon

F-8
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

information provided by insurance adjustors for reported claims and are
adjusted for expected loss development and the estimated liability for
incurred but not reported claims.

Other Long-Term Liabilities. Periodically, the Company receives volume
rebates from vendors related to certain operating leases for new revenue and
service equipment. Additionally, certain equipment leases include spare tires,
which increase tire inventories. The Company defers recognition of these
rebates and amortizes such amounts as a reduction of vehicle rent expense over
the respective lease terms. At March 31, 1996 and 1997, other long-term
liabilities include deferred rents of $1,802,000 and $1,295,000, respectively.

Income Taxes. Deferred tax assets and liabilities are computed based on the
difference between the financial statement and income tax bases 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.

Contract Wages. Prior to August 1996, the Company leased a substantial
portion of its personnel, including drivers, from an independent personnel
leasing company. Under the lease agreements, the Company paid a contracted
amount per person and the personnel leasing company had the responsibility for
payroll, unemployment insurance and workers' compensation claims. In August
1996, the lease agreements with the independent personnel leasing company were
terminated and the personnel previously leased under these agreements became
employees of the Company. Effective January 1, 1997, the Company entered into
an agreement with a Professional Employer Organization (PEO) in which the PEO
is a co-employer with the Company for all of the Company's personnel. The PEO
is responsible for processing and administration of the Company's payroll,
including tax reporting, and provides group health benefits and worker's
compensation coverage.

Hedging Instruments. The Company has only limited involvement with
derivative financial instruments and does not use them for trading purposes.
They are periodically used to hedge the effects of fluctuations in the price
of fuel. The resulting gains or losses are accounted for as a decrease or
increase in fuel expense in the period the fuel is purchased. At March 31,
1997, there were no fuel hedges. At June 30, 1997, the Company had commitments
to purchase approximately 500,000 gallons of fuel per month through March
1998. The fair value of the fuel contracts is not significant. The Company is
exposed to fuel hedging transaction losses in the event of nonperformance by
counterparties, but management does not expect any counterparty to fail to
meet its obligations.

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. The weighted average number of shares and
equivalents used in the computation were 10,806,336, 12,002,754 and 12,167,890
for fiscal 1995, 1996 and 1997, respectively.

Reclassifications. Certain reclassifications have been made in the fiscal
1995 and 1996 financial statements to conform with the 1997 presentation.

Stock-Based Compensation. The Company accounts for its stock-based
compensation plans under Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB No. 25"). Effective fiscal
1997, the Company adopted the disclosure option of SFAS No. 123, "Accounting
for Stock-Based Compensation."

Recent Accounting Pronouncements. In 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standard No. 128
"Earnings Per Share" ("SFAS 128"). SFAS 128 changes the criteria for reporting
earnings per share ("EPS") by replacing primary EPS with basic EPS and fully
diluted EPS with diluted EPS. The Company is required to adopt SFAS 128 for
periods ending after December 15, 1997, and all prior period EPS data must be
restated. The impact of adopting SFAS 128 will not have a material impact on
EPS for any period presented.

F-9
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Unaudited Interim Financial Statements. The accompanying consolidated
balance sheet as of June 30, 1997, and the related consolidated statements of
operations, stockholders' equity and cash flows for the three-month periods
ended June 30, 1996 and 1997, are unaudited. 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. The results for the three-month period ended June 30,
1997, are not necessarily indicative of results which may be expected for the
entire year.

4. INCOME TAXES

The income tax provision (benefit) in fiscal 1995, 1996 and 1997 consisted
of the following:

<TABLE>
<CAPTION>
1995 1996 1997
------ ------- ------
(IN THOUSANDS)
<S> <C> <C> <C>
Current
Federal............................................. $2,989 $(2,876) $2,726
State............................................... 352 120 529
------ ------- ------
3,341 (2,756) 3,255
Deferred.............................................. 1,953 2,737 3,103
------ ------- ------
$5,294 $ (19) $6,358
====== ======= ======
</TABLE>

The income tax provision (benefit) as reported in the consolidated
statements of operations differs from the amounts computed by applying federal
statutory rates due to the following:

<TABLE>
<CAPTION>
1995 1996 1997
------ ----- ------
(IN THOUSANDS)
<S> <C> <C> <C>
Federal income tax at statutory rate.................. $4,609 $ 25 $4,840
State income taxes, net of federal income tax bene-
fit.................................................. 419 73 349
Goodwill amortization................................. 78 75 75
Nondeductible driver per diems........................ -- -- 650
Other................................................. 188 (192) 444
------ ----- ------
Income tax provision (benefit)........................ $5,294 $ (19) $6,358
====== ===== ======
</TABLE>

The tax effect of temporary differences that give rise to significant
portions of deferred tax assets and liabilities at March 31, 1996 and 1997
consisted of the following:

<TABLE>
<CAPTION>
1996 1997
------- -------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets
Allowance for doubtful accounts............................ $ 1,133 $ 952
Insurance reserves......................................... 3,743 3,721
Net operating loss carryforwards........................... 6,117 --
Alternative minimum tax credit carryforwards............... 2,883 2,362
Claims and other reserves.................................. 694 826
Other...................................................... 84 284
------- -------
Total deferred tax assets................................. $14,654 $ 8,145
======= =======
Deferred tax liabilities
Book over tax basis of property and equipment.............. $20,376 $16,880
Prepaid license fees....................................... 1,248 1,279
Other...................................................... 27 86
------- -------
Total deferred tax liabilities............................ $21,651 $18,245
======= =======
</TABLE>

F-10
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. LONG-TERM DEBT

Long-term debt at March 31, 1996 and 1997 consisted of the following:

<TABLE>
<CAPTION>
1996 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Obligation under line of credit with a group of banks,
weighted average interest rate of 6.77% at March 31,
1997, maturing August 1998............................... $ 31,500 $ 32,500
Installment notes with banks, weighted average interest
rate of 7.19% at March 31, 1997, maturing at various
dates ranging from November 1997 to December 2002........ 23,160 14,673
Installment notes with finance companies, weighted average
interest rate of 7.73% at March 31, 1997, maturing at
various dates ranging from May 1997 to December 1998..... 20,055 23,598
Note payable to former stockholder of National Freight
Systems, interest payable at 7% at March 31, 1997, due in
annual installments through October 1997................. 400 200
Note payable to stockholder of Lima Transportation, Inc.,
interest payable at 9%, due July 1998.................... -- 792
Other..................................................... 503 563
-------- --------
$ 75,618 $ 72,326
Less: current maturities of long-term debt................ (13,829) (13,008)
-------- --------
$ 61,789 $ 59,318
======== ========
</TABLE>

The aggregate annual maturities of long-term debt for each of the next five
years ending March 31 are:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C> <C>
1998...................................................... $ 13,008
1999...................................................... 50,079
2000...................................................... 5,465
2001...................................................... 768
2002...................................................... 1,592
</TABLE>

The installment notes with banks and finance companies are collateralized by
certain property and equipment of the Company.

In November 1995, the Company entered into an unsecured credit agreement
(the "Credit Agreement") with a group of banks. The Credit Agreement operates
as a revolving credit facility until August 1998, 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.

Borrowings under the Credit Agreement bear interest rates, at the option of
the Company, equal to either: (i) the greater of the bank prime rate or the
federal funds rate plus 1/2%, (ii) the rate offered in the Eurodollar market
for amounts and periods comparable to the relevant loan plus a margin that is
determined by several financial covenants, or (iii) the rate offered to the
Company for a loan of a specific amount and maturity by any of the
participating banks under a competitive bid process. At March 31, 1997, the
margin applicable to the Eurodollar interest rate was equal to 1.25%.

F-11
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Credit Agreement contains covenants that limit, among other things, the
payment of dividends, the incurrence of additional debt, and the pledging 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.

6. LEASES

The Company leases certain revenue and service equipment and office and
terminal facilities under long-term non-cancelable operating lease agreements
expiring at various dates through December 2002. For the years ended March 31,
1995, 1996 and 1997, rental expense under these agreements was approximately
$17,092,000, $19,437,000 and, $26,388,000 respectively.

Approximate aggregate minimum future rentals payable under these operating
leases for each of the next five years are:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
1998....................................................... $30,481
1999....................................................... 27,774
2000....................................................... 15,010
2001....................................................... 4,751
2002....................................................... 686
</TABLE>

7. RELATED PARTY TRANSACTIONS

The Company leases certain office and terminal facilities from entities
owned by the two principal stockholders of the Company. The lease agreements
are for five-year terms and provide the Company with the option to renew the
lease agreements for four three-year terms. Rent expense of approximately
$1,210,000, $1,256,000 and $1,639,000 was recognized in connection with these
leases during the years ended March 31, 1995, 1996 and 1997, respectively.

The two principal stockholders of the Company own 100% of the outstanding
common stock of Paragon Leasing LLC ("Paragon"). Paragon leases certain
revenue and service equipment to the Company on a temporary basis. Rent
expense of approximately $1,181,000, $1,028,000, and $869,000 was recognized
in connection with these leases during the years ended March 31, 1995, 1996
and 1997, respectively.

Prior to December 31, 1995, a principal stockholder of the Company directly
controlled 50% of the outstanding stock of LTL Express Systems. During the
years ended March 31, 1995 and 1996, the Company recognized operating revenue
from LTL Express Systems of approximately $897,000 and $427,000, respectively.
The principal stockholder disposed of his interest in LTL Express Systems
effective December 31, 1995.

The two principal stockholders of the Company and certain partnerships
controlled by their families own 43% of the outstanding common stock of
Transcom Technologies, Inc. ("Transcom"). Transcom makes a debit card system
available to the Company's drivers through which phone calls and Internet
e-mail can be credited while the driver is on the road. Total payments by the
Company to Transcom were approximately $87,000, $148,000 and $143,000 in the
years ended March 31, 1995, 1996 and 1997, respectively.

F-12
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

8. 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.

Letters of credit of $3,055,000 were outstanding at March 31, 1997. The
letters of credit are maintained primarily to support the Company's insurance
program (see Note 3). Commitment fees of 1% on the outstanding portion of the
letters of credit are paid by the Company.

9. EMPLOYEE BENEFIT PLANS

The Company has in place an employee profit-sharing plan covering
substantially all non-driver employees. The plan provides for additional
compensation to employees, the amount of which is based on results of
operations exceeding certain goals.

The Company has a 401(k) retirement plan covering substantially all
employees of the Company, whereby participants may contribute a percentage of
their compensation, as allowed under applicable laws. The plan provides for a
matching contribution by the Company. Participants are 100% vested in
participant contributions and become vested in employer matching contributions
over a period of four years.

During 1995, 1996 and 1997, the Company recognized $2,827,000, $290,000 and
$400,000, respectively, of expense under these employee benefit plans.

10. STOCKHOLDERS' EQUITY

Initial Public Offering. In October 1994, the Company completed its initial
public offering through the issuance of 2,500,000 shares of Class A Common
Stock. As a result of this offering, the Company received proceeds, net of
underwriting discounts and commissions and issuance costs, of $31,588,000. The
Company utilized the net proceeds to reduce outstanding debt and acquire
certain equipment previously leased under operating leases.

Common Stock Holders of Class A. Common Stock are entitled to one vote per
share. Holders of Class B Common Stock are entitled to two votes per share.
Once the Class B Common Stock is no longer held by the two principal
stockholders of the Company, or their families, as defined, the stock is
automatically converted into Class A Common Stock on a share per share basis.

Preferred Stock. Effective December 31, 1993, the Board of Directors
approved the designation of 2,000,000 shares of preferred stock with par value
of $.01 per share. The Board of Directors has the authority to issue these
shares and to determine the rights, terms and conditions of the preferred
stock as needed.

Incentive Stock Plan. In November 1993, the Company adopted the U.S. Xpress
Enterprises, Inc. Incentive Stock Plan (the "Plan"). The Plan provides for the
issuance of shares of restricted common stock of the Company, as well as both
incentive and nonstatutory stock options. There may be issued under the Plan
(as restricted stock, in payment of performance grants, or pursuant to the
exercise of stock options) an aggregate of not more than the greater of (a)
1,038,138 shares of Class A Common Stock, or (b) 8% of the total number of
common shares of the Company outstanding at any given time. Participants of
the Plan may include key employees as selected by the compensation committee
of the Board of Directors. Under the terms of the Plan, the Company may sell
restricted shares of common stock, grant options, or

F-13
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

issue performance grants to participants in amounts and for such prices as
determined by the compensation committee. All options will vest immediately in
the event of a change in control of the Company, or the death, disability, or
retirement of the employee.

On November 30, 1993, 289,195 shares of restricted stock were sold to
employees at $4.72 per share, which approximated the fair market value of the
shares at the date of sale. Employees issued recourse notes payable to the
Company in the aggregate amount of $1,365,000 as proceeds for the issuance of
the restricted shares. The notes bear interest at 6% and are due in three
equal annual installments beginning November 30, 1999. The restricted stock
may not be sold, assigned, transferred, pledged or otherwise disposed of
during the restriction period.

In fiscal 1995, the board authorized, upon the completion of the initial
public offering, the removal of the restrictions on 91,800 shares scheduled to
expire on November 30, 1996. In exchange for the removal of restrictions on
these shares, the affected employees repaid an aggregate of $837,800 of the
related notes receivable. During each of the years ended March 31, 1997, 1996
and 1995, 18,390 shares of restricted stock were forfeited, and related notes
receivable of $44,900 were canceled in each year. At March 31, 1997, 91,750
shares of restricted stock were outstanding. The restrictions expire on
November 30, 1997 and 1998. Restrictions also expire in the event of a change
in control of the Company or upon the death, disability or retirement of the
employee.

Non-Employee Directors Stock Plan. In August 1995, the Company adopted the
1995 Non-Employee Directors Stock Award and Option Plan (the "Directors Stock
Plan") providing for the issuance of stock options to non- employee directors
upon their election to the Company's Board of Directors. The Directors Stock
Plan also provides non-employee directors the option to receive certain board-
related compensation in the form of stock. The number of shares of Class A
Common Stock available for option or issue under the Directors Stock Plan may
not exceed 50,000 shares.

The Directors Stock Plan provides for grant of 1,200 options to purchase the
Company's Class A Common Stock to each non-employee director upon the election
of each such director to the Board. The exercise price of options issued under
the plan is set at the fair market value of the Company's stock on the date
granted. Options vest at the rate of 400 options on each of the first, second
and third anniversaries of the date of grant. In August 1996 and 1995, 2,400
options were granted to non-employee directors with an exercise price of
$6.625 and $9.50, respectively.

The Directors Stock Plan also provides non-employee directors the option to
receive compensation earned for board-related activities in the form of the
Company's Class A Common Stock in lieu of cash. If a board member elects to
receive board-related compensation in the form of stock, the number of shares
issued to each director in lieu of cash is determined based on the amount of
earned compensation divided by the fair market value of the Company's stock on
the date compensation is earned. During the years ended March 31, 1997 and
1996, 2,542 and 1,744 shares, respectively, of the Company's Class A Common
Stock were issued to non-employee directors in lieu of cash compensation of
$18,000 and $16,000, respectively, for each of those years.

Accounting for Stock-Based Compensation. The Company accounts for its stock-
based compensation under APB No. 25, under which no compensation expense has
been recognized for stock options granted with exercise prices equal to the
fair value of the Company's common stock on the date of grant. The Company
adopted SFAS No. 123 for disclosure purposes only in fiscal 1997. For SFAS No.
123 purposes, the fair value of each option grant has been estimated as of the
date of grant using the Black-Scholes option pricing model with the following
weighted average assumptions for 1996 and 1997,

F-14
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

respectively: risk-free interest rate of 6.24% and 6.56%, expected life of
five years, expected dividend yield of 0% and expected volatility of 58% for
1996 and 1997. Using these assumptions, the fair value of the stock options
granted in 1996 and 1997 is $9,000 and $294,000, respectively, which would be
amortized as compensation expense over the vesting period of the options. Had
compensation cost for the plan been determined in accordance with SFAS No.
123, utilizing the assumptions detailed above, the Company's pro forma net
income would have been $93,000 and $7,816,000 for the years ended March 31,
1996 and 1997, respectively. Pro forma net income per share would have been
$.01 and $.64 for the years ended March 31, 1996 and 1997, respectively.

The pro forma effect on net income in this pro forma disclosure may not be
representative of the pro forma effect on net income in future years, because
it does not take into consideration pro forma compensation expense related to
grants made prior to fiscal 1996.

A summary of the Company's stock option activity for 1995, 1996 and 1997
follows:

<TABLE>
<CAPTION>
WEIGHTED-AVERAGE
SHARES OPTION PRICE EXERCISE PRICE
------- ------------ ----------------
<S> <C> <C> <C>
Outstanding at March 31, 1995......... 165,064 $ 4.72 $4.72
Granted at market price.............. 2,400 $ 9.50 $9.50
-------
Outstanding at March 31, 1996......... 167,464 $4.72-$9.50 $4.79
Granted at market price.............. 99,400 $6.63-$6.80 $6.87
Exercised............................ (27,008) $ 4.72 $4.72
Canceled or expired.................. (40,514) $4.72-$9.50 $5.12
-------
Outstanding at March 31, 1997......... 199,342 $4.72-$9.50 $5.77
=======
</TABLE>

There was no option activity in fiscal 1995. The weighted-average fair value
of options granted during 1996 and 1997 was $5.35 and $3.89, respectively.
Shares subject to options outstanding at March 31, 1997 have a weighted-
average remaining contractual life of 8.38 years. Of the options outstanding
at March 31, 1997, 73,050 are currently exercisable with a weighted-average
exercise price of $5.66 per share. As of March 31, 1996, 33,412 of the options
outstanding were exercisable with a weighted average exercise price of $4.78
per share. No options were exercisable at March 31, 1995.

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, customer and other
receivables, accounts payable and accrued liabilities are reasonable estimates
of their fair values because of the short maturity of these financial
instruments. Based on the borrowing rates available to the Company for long-
term debt with similar terms and average maturities, the carrying amounts
approximate the fair value of such financial instruments.

F-15
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

12. QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH FULL
QUARTER QUARTER QUARTER QUARTER YEAR
------- ------- ------- ------- --------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Fiscal 1996
Operating revenue................. $65,031 $71,744 $81,807 $81,115 $299,697
Income from operations............ 1,055 1,780 2,168 248 5,251
Income (loss) before income tax
provision........................ (203) 571 906 (1,199) 75
Net income (loss)................. (88) 351 551 (720) 94
Earnings (loss) per share......... $ (0.01) $ 0.03 $ 0.05 $ (0.06) $ 0.01
Fiscal 1997
Operating revenue................. $87,817 $92,259 $91,179 $91,564 $362,819
Income from operations............ 2,241 6,026 6,473 4,976 19,716
Income before income tax
provision........................ 896 4,611 5,120 3,609 14,236
Net income........................ 552 2,745 2,411 2,170 7,878
Earnings per share(1)............. $ 0.05 $ 0.23 $ 0.20 $ 0.18 $ 0.65
</TABLE>
- --------
(1) The sum of quarterly earnings per share amounts differs from annual
earnings per share because of differences in the weighted average number
of common shares used in the quarterly and annual computations.

F-16
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CON-
NECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
SINCE THE DATES AS OF WHICH INFORMATION IS SET FORTH HEREIN. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.

-----------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 6
Use of Proceeds.......................................................... 10
Price Range of Common Stock.............................................. 10
Capitalization........................................................... 11
Dividend Policy.......................................................... 11
Selected Consolidated Financial Data..................................... 12
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 13
Industry Overview........................................................ 18
Business................................................................. 19
Management............................................................... 26
Certain Relationships and Transactions................................... 32
Principal and Selling Stockholders....................................... 33
Description of Capital Stock............................................. 34
Shares Eligible for Future Sale.......................................... 37
Underwriting............................................................. 38
Legal Matters............................................................ 39
Experts.................................................................. 39
Index to Consolidated Financial Statements............................... F-1
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

3,400,000 Shares

LOGO
U.S. XPRESS ENTERPRISES, INC.

Class A Common Stock

-----------

PROSPECTUS
-----------

Alex. Brown & Sons
INCORPORATED

Morgan Stanley Dean Witter

Schroder & Co. Inc.

Morgan Keegan & Company, Inc.

, 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an itemized statement of all expenses to be incurred by
the Company in connection with the sale and distribution of the securities
being registered by this Registration Statement, other than the underwriting
discount. All amounts are estimated except the SEC registration fee, the NASD
filing fee and the NASDAQ listing fee.

<TABLE>
<S> <C>
SEC registration fee............................................... $ 21,991
NASD filing fee.................................................... 7,757
NASDAQ listing fee................................................. 17,500
Accounting fees and expenses....................................... 45,000
Legal fees and expenses............................................ 75,000
Printing........................................................... 80,000
Registrar and transfer agent fees.................................. 2,500
Miscellaneous...................................................... 252
--------
Total............................................................ $250,000
========
</TABLE>

The Company will bear the expenses shown above.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article 12 of the Company's Restated Articles of Incorporation ("Restated
Articles") provides as follows:

To the fullest extent permitted by the Nevada General Corporation Law, as
the same exists or may hereafter be amended, a director or officer of this
corporation shall not be personally liable to the corporation or its
shareholders for monetary damages for breach of his or her fiduciary duty
as a director or officer.

To the fullest extent permitted by the Nevada General Corporation Law, as
the same exists or may hereafter be amended, the corporation shall
indemnify any person who is made or threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative and whether formal or informal,
by reason of the fact that such person is or was a director or officer of
the corporation or of any of its subsidiaries, or is or was serving at the
direction of the corporation in any such capacity with any other entity
whatsoever.

The requirement that the corporation shall provide indemnification
pursuant to this Article 12 shall not preclude any other or additional
provision of indemnification, whether provided by law, by insurance, by
agreement between this corporation and the parties to be indemnified or
otherwise.

In addition to the rights of indemnification granted herein, this
corporation shall, to the fullest extent now or hereafter permitted by the
Nevada General Corporation Law, provide for the advancement of expenses as
they are incurred by any director or officer of the corporation in the
defense of any proceeding of the type described above, in advance of the
final disposition of such proceeding.

Article 11 of the Company's Bylaws provides as follows: "[a]ny director or
officer, or the executor or administrator of any director or officer, is
entitled to indemnification to the fullest extent permissible under the laws
of this state."

The Underwriting Agreement between the Registrant, the Selling Stockholders
and the Underwriters named therein contains provisions pursuant to which the
Underwriters, under certain specified circumstances, have agreed to indemnify
the officers and directors of the Company.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

None.

II-1
<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

a. Exhibits

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------------------------------------------------------------------
<C> <S>
*1 Form of Underwriting Agreement.
3.1 Restated Articles of Incorporation of the Company.(1)
3.2 By-Laws of the Company.(1)
4.1 Stock Purchase Agreement dated June 10, 1993 by and among Max L.
Fuller, Patrick E. Quinn, and the Company.(1)
4.2 Agreement of Right of First Refusal with regard to Class B Shares of
the Company dated May 11, 1994 by and between Max L. Fuller and Patrick
E. Quinn.(1)
*5 Opinion, including consent of Miller & Martin, counsel to the Company,
as to the legality of the securities being registered.
10.1 Accounts Financing Agreement (Security Agreement) dated February 2,
1988, as amended, between Congressional Financial Corp. (Southern) and
Southwest Motor Freight, Inc.(1)
10.2 Security Agreement dated December 18, 1985, as amended, by and between
Exchange National Bank of Chicago and U.S. Xpress, Inc.(1)
10.3 Security Agreement dated September 17, 1987, as amended, by and between
Exchange National Bank of Chicago and Crown Transport Systems, Inc.(1)
10.4 1993 Incentive Stock Plan of the Company.(1)
10.5 Stock Option Agreement Under 1993 Incentive Stock Plan.(1)
10.6 Stock Rights and Restrictions Agreement for Restricted Stock Award
Under 1993 Incentive Stock Plan.(1)
10.7 Self-Funded Employee Benefits Plan Document of the Company.(1)
10.8 Service Agreement dated May 2, 1994 by and between TTC, Illinois, Inc.
and the Company for the provision of leased personnel to the
Company.(1)
10.9 Salary Continuation Agreement dated June 10, 1993 by and between the
Company and Max L. Fuller.(1)
10.10 Salary Continuation Agreement dated June 10, 1993 by and between the
Company and Patrick E. Quinn.(1)
10.11 Stock Purchase Agreement dated November 28, 1990 by and between the
Company and Clyde Fuller for the acquisition by the Company of the
capital stock of Southwest Motor Freight, Inc. held by Mr. Fuller, such
stock constituting all of the issued and outstanding capital stock of
Southwest Motor Freight, Inc.(1)
10.12 Stock Purchase Agreement dated September 30, 1992 by and between the
Company and Clyde Fuller for the acquisition by the Company of the
capital stock of Chattanooga Leasing, Inc. held by Mr. Fuller, such
stock constituting all of the issued and outstanding capital stock of
Chattanooga Leasing, Inc.(1)
10.13 Articles of Merger and Plan of Merger filed February 24, 1993, pursuant
to which Chattanooga Leasing, Inc. was merged with and into Southwest
Motor Freight, Inc.(1)
10.14 Stock Purchase Agreement dated January 1, 1993 by and among Max L.
Fuller, Patrick E. Quinn and the Company for the acquisition by the
Company of the capital stock of U.S. Xpress, Inc. held by Messrs.
Fuller and Quinn, such stock constituting all of the issued and
outstanding capital stock of U.S. Xpress, Inc.(1)
10.15 Stock Purchase Agreement dated January 1, 1993 by and among Max L.
Fuller, Patrick E. Quinn and the Company for the acquisition by the
Company of the capital stock of U.S. Xpress Leasing, Inc. held by
Messrs. Fuller and Quinn, such stock constituting all of the issued and
outstanding capital stock of U.S. Xpress Leasing, Inc.(1)
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------------------------------------------------------------------
<C> <S>
10.16 Stock Purchase Agreement dated March 10, 1994 by and between the
Company and L. D. Miller, III for the acquisition by the Company of the
capital stock of Crown Transport Systems, Inc. held by Mr. Miller, such
stock constituting 40% of the issued and outstanding capital stock of
Crown Transport Systems, Inc.(1)
10.17 Stock Purchase Agreement dated March 17, 1994 by and between the
Company, Patrick E. Quinn and Max L. Fuller for the acquisition by the
Company of the capital stock of Crown Transport Systems, Inc. held by
Messrs. Quinn and Fuller, such stock constituting 60% of the issued and
outstanding capital stock of Crown Transport Systems, Inc.(1)
10.18 Stock Purchase Agreement dated March 18, 1994 by and between the
Company and Ken Adams for the acquisition by the Company of 50% of the
capital stock of Hall Systems, Inc. held by Mr. Adams and the grant of
an option to the Company to purchase the remaining 50% of the capital
stock of Hall Systems, Inc. from Mr. Adams exercisable beginning April
1, 1997.(1)
10.19 Software Acquisition Agreement dated September 15, 1994 by and among
QUALCOMM Incorporated, XPRESS Data Services, Inc., U.S. Xpress
Enterprises, Inc., Patrick E. Quinn, Max L. Fuller, Information
Management Solutions, Inc. and James Coppinger.(2)
10.20 Stock Purchase Agreement dated October 31, 1994 by and between the
Company and Ken Frohlich for the acquisition by the Company of the
capital stock of National Freight Systems, Inc. held by Mr. Frohlich,
such stock constituting all of the issued and outstanding capital stock
of National Freight Systems, Inc.(3)
10.21 Asset Purchase Agreement with respect to acquisition of CSI/Reeves,
Inc.(4)
10.22 Stock Purchase Agreement with respect to Hall Systems, Inc.(5)
10.23 Credit Agreement with NationsBank.(5)
10.24 Amendment No. 1 to Credit Agreement with NationsBank.(6)
10.25 Asset Purchase Agreement dated June 18, 1996 with respect to
acquisition of Michael Lima Transportation, Inc.(7)
10.26 Asset Purchase Agreement dated April 1, 1997 with respect to
acquisition of assets from Rosedale Transport, Inc. and Rosedale
Transport, Ltd.(7)
10.27 Asset Purchase Agreement dated April 25, 1997 with respect to
acquisition of JTI, Inc.(7)
*10.28 Loan and Security Agreement dated June 24, 1997 by and between Wachovia
Bank, N.A. and U.S. Xpress Leasing, Inc.
22 List of the current subsidiaries of the Company.(7)
*23.1 Consent of Miller & Martin (included in their opinion filed as Exhibit
5 to this Registration Statement).
*23.2 Consent of Arthur Andersen LLP, independent certified public
accountants.
*24 Power of Attorney
</TABLE>
- --------
* Filed in Registration Statement on Form S-1 dated July 10, 1997
(1) Filed as an exhibit to Registration Statement on Form S-1 dated May 20,
1994 (SEC File No. 33-79208) and incorporated herein by reference.
(2) Filed as an exhibit to Pre-Effective Amendment No. 2 to Registration
Statement on Form S-1 dated October 4, 1994 (SEC File No. 33-79208) and
incorporated herein by reference.
(3) Filed as an exhibit to Quarterly Report on Form 10-Q for quarter ended
September 30, 1994 and incorporated herein by reference.
(4) Filed as an exhibit to Quarterly Report on Form 10-Q for quarter ended
September 30, 1995 and incorporated herein by reference.
(5) Filed as an exhibit to Quarterly Report on Form 10-Q for quarter ended
December 31, 1995 and incorporated herein by reference.

II-3
<PAGE>

(6) Filed as an exhibit to Quarterly Report on Form 10-Q for quarter ended
September 30, 1996 and incorporated herein by reference.
(7) Filed as an exhibit to the Annual Report on Form 10-K for the fiscal year
ended March 31, 1997 and incorporated herein by reference.

b. Financial Statement Schedules

<TABLE>
<S> <C>
Report of Independent Public Accountants on Financial Statement
Schedules........................................................... S-1
Schedule II -- Valuation and Qualifying Accounts..................... S-2
</TABLE>

All other schedules are omitted as the required information is inapplicable
or the information is presented in the financial statements or related notes.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions set forth in Item 14, or otherwise, the
Company has been advised in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and the Company will be governed by the final
adjudication of such issue.

The Company hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Company pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act of 1933 shall be deemed to be part of
this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 2 TO THE REGISTRATION STATEMENT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
CHATTANOOGA, STATE OF TENNESSEE ON AUGUST 13, 1997.

U.S. XPRESS ENTERPRISES, INC.

By: */s/ Patrick E. Quinn
__________________________________
Patrick E. Quinn, President and
Co-Chairman of the Board

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.

SIGNATURES TITLE DATE

*/s/ Max L. Fuller Co-Chairman of the
- ------------------------------- Board; Director August 18, 1997
MAX L. FULLER (principal executive
officer)

*/s/ Patrick E. Quinn Co-Chairman of the
- ------------------------------- Board; President and August 18, 1997
PATRICK E. QUINN Treasurer; Director
(principal executive
officer)

/s/ Ray M. Harlin Chief Financial Officer;
- ------------------------------- (principal financial and August 18, 1997
RAY M. HARLIN accounting officer)

*/s/ E. William Lusk, Jr. Executive Vice President
- ------------------------------- of Marketing; Director August 18, 1997
E. WILLIAM LUSK, JR.

*/s/ William K. Farris Executive Vice President
- ------------------------------- of Operations; Director August 18, 1997
WILLIAM K. FARRIS

*/s/ James B. Baker Director
- ------------------------------- August 18, 1997
JAMES B. BAKER

*/s/ A. Alexander Taylor, II Director
- ------------------------------- August 18, 1997
A. ALEXANDER TAYLOR, II

/s/ Ray M. Harlin
* By: _________________________ August 18, 1997
RAY M. HARLIN
ATTORNEY-IN-FACT

II-5
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
of U.S. Xpress Enterprises, Inc.

We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of U.S. XPRESS ENTERPRISES, INC. (a
Nevada corporation) AND SUBSIDIARIES in this Form 10-K and have issued our
report thereon dated May 7, 1997. Our audit was made for the purpose of
forming an opinion on the financial statements taken as a whole. Schedule II
is the responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and
is not part of the basic consolidated financial statements. This schedule has
been subjected to the auditing procedures applied in the audit of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.

Arthur Andersen LLP

Chattanooga, Tennessee
May 7, 1997

S-1
<PAGE>

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED MARCH 31, 1995, 1996 AND 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT
BEGINNING CHARGED TO CHARGED TO BALANCE AT
DESCRIPTION OF PERIOD COST/EXPENSES OTHER (1) DEDUCTIONS (2) END OF PERIOD
----------- ---------- ------------- ---------- -------------- -------------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED
3/31/95
Reserve for doubtful
accounts.............. $1,212 $ 543 $ 181 $ 306 $1,630
FOR THE YEAR ENDED
3/31/96
Reserve for doubtful
accounts.............. $1,630 $ 784 $1,036 $ 417 $3,033
FOR THE YEAR ENDED
3/31/97
Reserve for doubtful
accounts.............. $3,033 $1,259 $ 113 $1,672 $2,733
</TABLE>

<TABLE>
<S> <C>
(1)For the year ended 3/31/95
Recoveries on accounts written off............................... $ 181
------
For the year ended 3/31/96
Recoveries on accounts written off............................... $ 25
Balance acquired through purchase of CSI/Reeves.................. 886
Balance acquired through purchase of Hall Systems................ 125
------
1,036
For the year ended 3/31/97
Recoveries on accounts written off............................... $ 113
------
(2)Accounts written off
</TABLE>

S-2

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports and to all references to our Firm included in or made a part of this
Registration Statement.

ARTHUR ANDERSEN LLP

Chattanooga, Tennessee

August 18, 1997