<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended Commission file number
March 31, 2000 0-24806
U.S. XPRESS ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
NEVADA 62-1378182
(State or other jurisdiction of (I.R.S. employer identification no.)
Incorporation or organization)
4080 Jenkins Road (423) 510-3000
CHATTANOOGA, TENNESSEE 37421 (Registrant's
telephone no.)
(Address of principal executive offices) (Zip Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- -------
As of March 31, 2000, 11,407,647 shares of the registrant's Class A
common stock, par value $.01 per share, and 3,040,262 shares of Class B common
stock, par value $.01 per share, were outstanding.
Page 1 of 17
<PAGE>
U.S. XPRESS ENTERPRISES, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.................. 3
- ------
Consolidated Statements of Operations for the Three
Months Ended March 31, 2000 and 1999............... 4
Consolidated Balance Sheets as of March 31,
2000 and December 31, 1999......................... 5
Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 2000 and 1999......... 7
Notes to Consolidated Financial Statements......... 8
Item 2. Management's Discussion and Analysis of
- ------
Financial Condition and Results of Operations...... 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.................... 16
- ------
SIGNATURES.......................................... 17
</TABLE>
2
<PAGE>
U.S. XPRESS ENTERPRISES, INC.
PART I
FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
The interim consolidated financial statements contained herein reflect
all adjustments that, in the opinion of management, are necessary for a fair
statement of the financial condition and results of operations for the periods
presented. They have been prepared by the Company, without audit, in accordance
with the instructions to Form 10-Q and the rules and regulations of the
Securities and Exchange Commission and do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
Operating results for the three months ended March 31, 2000 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000. In the opinion of management, all adjustments necessary for
a fair presentation of such financial statements have been included. Such
adjustments consisted only of items that are of a normal recurring nature.
These interim consolidated financial statements should be read in
conjunction with the Company's latest annual consolidated financial statements
(which are included in the 1999 Annual Report to Stockholders in the Company's
Form 10-K filed with the Securities and Exchange Commission on March 30, 2000).
3
<PAGE>
<TABLE>
<CAPTION>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
-----------------------------
2000 1999
-------- --------
<S> <C> <C>
Operating Revenue $191,841 $161,266
-------- --------
Operating Expenses:
Salaries, wages and benefits 71,575 63,388
Fuel and fuel taxes 33,867 21,379
Vehicle rents 14,860 11,900
Depreciation and amortization, net of gain on sale 7,868 6,902
Purchased transportation 25,257 19,294
Operating expense and supplies 11,546 9,891
Insurance premiums and claims 7,633 5,382
Operating taxes and licenses 3,386 3,048
Communications and utilities 3,032 2,970
General and other operating 7,975 7,753
------- ---------
Total operating expenses 186,999 151,907
------- ---------
Income from Operations 4,842 9,359
Interest Expense, net 3,395 3,165
------- ---------
Income Before Income Taxes 1,447 6,194
Income Taxes 579 2,477
------- ---------
Net Income $ 868 $ 3,717
======= =========
Earnings Per Share - basic $ 0.06 $ 0.25
======= =========
Weighted average shares - basic 14,523 14,963
======= =========
Earnings Per Share - diluted $ 0.06 $ 0.25
======= =========
Weighted average shares - diluted 14,582 15,068
======= =========
</TABLE>
(See accompanying Notes to Consolidated Financial Statements)
4
<PAGE>
<TABLE>
<CAPTION>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
March 31, 2000 December 31, 1999
-------------- -----------------
(Unaudited)
<S> <C> <C>
Assets
- -----------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 107 $ 259
Customer receivables, net of allowance 97,878 101,870
Other receivables 7,211 9,807
Prepaid insurance and licenses 9,872 2,078
Operating and installation supplies 5,984 6,078
Deferred income taxes 2,148 2,148
Other current assets 5,125 2,092
-------- --------
Total current assets 128,325 124,332
-------- --------
Property and Equipment, at cost:
Land and buildings 10,429 10,377
Revenue and service equipment 237,740 223,991
Furniture and equipment 19,526 19,169
Leasehold improvements 24,301 22,343
-------- --------
291,996 275,880
Less accumulated depreciation and amortization (75,777) (69,547)
-------- --------
Net property and equipment 216,219 206,333
-------- --------
Other Assets:
Goodwill, net 69,658 70,161
Other 11,402 8,211
-------- --------
Total other assets 81,060 78,372
-------- --------
Total Assets $425,604 $409,037
======== ========
</TABLE>
(See accompanying Notes to Consolidated Financial Statements)
5
<PAGE>
<TABLE>
<CAPTION>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share Data)
March 31, 2000 December 31, 1999
-------------- -----------------
(Unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity
- -----------------------------------------------------------------
Current Liabilities:
Accounts payable $ 20,822 $ 17,442
Accrued wages and benefits 9,618 7,268
Claims and insurance accruals 2,329 5,530
Other accrued liabilities 4,582 5,074
Current maturities of long-term debt 5,128 1,182
-------- --------
Total current liabilities 42,479 36,496
-------- --------
Long-Term Debt, net of current maturities 191,409 181,256
-------- --------
Deferred Income Taxes 26,816 26,526
-------- --------
Other Long-Term Liabilities 3,018 3,232
-------- --------
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, 13,120,136 and 13,087,545
shares issued and outstanding at March 31,
2000 and December 31, 1999, respectively 131 131
Common stock Class B, $.01 par value, 7,500,000
shares authorized, 3,040,262 shares issued and
outstanding at March 31, 2000 and December 31, 1999 30 30
Additional paid-in capital 104,465 104,259
Retained earnings 75,600 74,732
Treasury Stock Class A, at cost (1,712,489 and 1,619,289 shares at
March 31, 2000 and December 31, 1999) (18,111) (17,392)
Notes receivable from stockholders (233) (233)
-------- --------
Total stockholders' equity 161,882 161,527
-------- --------
Total Liabilities and Stockholders' Equity $425,604 $409,037
======== ========
</TABLE>
(See accompanying Notes to Consolidated Financial Statements)
6
<PAGE>
<TABLE>
<CAPTION>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
---------------------------------------
2000 1999
-------------- --------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 868 $ 3,717
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Deferred income tax provision 290 1,239
Depreciation and amortization 8,064 7,387
Gain on sale of equipment (197) (485)
Change in operating assets and liabilities, net of acquisitions:
Receivables 5,044 3,388
Prepaid insurance and licenses (7,795) (6,947)
Operating and installation supplies 96 336
Other assets (5,086) (3,613)
Accounts payable and other accrued liabilities (209) (10,629)
Accrued wages and benefits 2,350 2,348
Other 12 4
-------- --------
Net cash provided by (used in) operating activities 3,437 (3,255)
-------- --------
Cash Flows from Investing Activities:
Payments for purchase of property and equipment (21,208) (13,342)
Proceeds from sales of property and equipment 3,867 18,196
-------- --------
Net cash provided by (used in) investing activities (17,341) 4,854
-------- --------
Cash Flows from Financing Activities:
Net borrowing (payments) under lines of credit 14,972 (4,000)
Payment of long-term debt (873) (214)
Proceeds from issuance of common stock, net 194 124
Purchase of Class A Common Stock (541) -
-------- --------
Net cash provided by (used in) financing activities 13,752 (4,090)
-------- --------
Net Decrease in Cash and Cash Equivalents (152) (2,491)
Cash and Cash Equivalents, beginning of period 259 6,613
-------- --------
Cash and Cash Equivalents, end of period $ 107 $ 4,122
-------- --------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest $ 3,588 $ 2,826
Cash paid during the period for income taxes $ 104 $ 3,613
</TABLE>
(See accompanying Notes to Consolidated Financial Statements)
7
<PAGE>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization and Operations
U.S. Xpress Enterprises, Inc. (the "Company") provides transportation and
logistics services through two business segments. U.S. Xpress, Inc. ("U.S.
Xpress") is a truckload carrier serving the continental United States and parts
of Canada and Mexico. CSI/Crown, Inc. ("CSI/Crown") provides transportation
services to the floorcovering industry.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany transactions and accounts
have been eliminated.
Property and Equipment
Property and equipment is carried at cost. Depreciation and amortization
of property and equipment is computed using the straight-line method for
financial reporting purposes and accelerated methods for tax purposes over the
estimated useful lives of the related assets (net of salvage value) as follows:
Buildings 10-30 years
Revenue and service equipment 3-7 years
Furniture and equipment 3-7 years
Leasehold improvements 5-6 years
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.
Earnings Per Share
The difference in basic and diluted EPS is due to the assumed conversion of
outstanding options resulting in approximately 59,000 and 105,000 equivalent
shares in the three month period ended March 31, 2000 and 1999, respectively.
Reclassifications
Certain reclassifications have been made in the 1999 financial statements
to conform to the 2000 presentation.
8
<PAGE>
3. Commitments and Contingencies
The Company is party to certain legal proceedings incidental to its
business. The ultimate disposition of these matters, in the opinion of
management, based in part on the advice of legal counsel, will not have a
material adverse effect on the Company's financial position or results of
operations.
The Company has letters of credit of $7,966,000 outstanding at March 31,
2000. The letters of credit are maintained primarily to support the Company's
insurance program.
4. Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in the derivative's fair value be recognized currently in
earnings, unless specific hedge accounting criteria are met. Special accounting
for qualifying hedges allows a derivative's gains and losses to offset related
results on the hedged item in the income statement, and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting.
As amended by SFAS No. 137, Statement 133 is effective for fiscal years
beginning after June 15, 2000. A company may also implement the Statement as of
the beginning of any fiscal quarter after issuance. Statement 133 cannot be
applied retroactively. Statement 133 must be applied to (a) derivative
instruments and (b) certain derivative instruments embedded in hybrid contracts
that were issued, acquired or substantively modified after December 31, 1997
(and, at the Company's election, before January 1, 1998).
The Statement could increase the volatility in earnings and other
comprehensive income, however, based on the Company's current and anticipated
level of derivative instruments and hedging activities, the Company does not
believe the impact would be material.
5. Recent Events
The Company entered into an agreement with five other large nationwide
transportation companies - Covenant Transport, Inc.; J.B. Hunt Transport
Services, Inc.; M.S. Carriers, Inc.; Swift Transportation Co., Inc.; and Werner
Enterprises, Inc. - pursuant to which the parties agreed to merge their
logistics business units into a commonly-owned, Internet based transportation
logistics company, to be named Transplace.com. As planned, the Company would
--------------
hold a 13% interest in the newly-formed logistics company. The other owners
would have the following equity interests Covenant, 13%; J.B. Hunt, 28%; M.S.
Carriers, 14%; Swift, 16%; and Werner, 16%.
9
<PAGE>
6. Operating Segments
The Company has two reportable segments based on the types of services it
provides to its customers: U.S. Xpress, which provides truckload operations and
related logistics services throughout the continental United States and parts of
Canada and Mexico, and CSI/Crown, which provides transportation services to the
floorcovering industry. All intersegment sales prices are market based. The
Company evaluates performance based on operating income of the respective
business units.
<TABLE>
<CAPTION>
U.S. Xpress CSI/Crown Consolidated
----------- --------- ------------
<S> <C> <C> <C>
Three Months Ended March 31, 2000
- -----------------------------------
Revenues - external customers $178,485 $13,356 $191,841
Intersegment revenues 1,288 - 1,288
Operating income 4,422 420 4,842
Total assets 406,495 19,109 425,604
Three Months Ended March 31, 1999
- -----------------------------------
Revenues - external customers $147,132 $14,134 $161,266
Intersegment revenues 1,240 - 1,240
Operating income 9,091 268 9,359
Total assets 402,439 19,242 421,681
</TABLE>
The difference in consolidated operating income as shown above and consolidated
income before income tax provision on the consolidated statements of operations
is net interest expense of $3,395 and $3,165 for the three months ended March
31, 2000 and 1999, respectively.
10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
U.S. Xpress Enterprises, Inc. (the "Company") provides transportation and
logistics services through two business segments. U.S. Xpress, Inc. ("U.S.
Xpress") is a truckload carrier serving the continental United States and parts
of Canada and Mexico. CSI/Crown, Inc. ("CSI/Crown") provides transportation and
logistics services to the floorcovering industry.
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
operating revenue:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------
2000 1999
-------- ---------
<S> <C> <C>
Operating Revenue 100.0% 100.0%
------ ------
Operating Expenses:
Salaries, wages and benefits 37.3 39.3
Fuel and fuel taxes 17.7 13.3
Vehicle rents 7.7 7.4
Depreciation & amortization, net of gain on sale 4.1 4.3
Purchased transportation 13.2 12.0
Operating expense & supplies 6.0 6.1
Insurance premiums & claims 4.0 3.3
Operating taxes & licenses 1.8 1.9
Communications & utilities 1.6 1.8
General & other operating 4.1 4.8
------ ------
Total operating expenses 97.5 94.2
------ ------
Income from Operations 2.5 5.8
Interest Expense, net 1.7 2.0
------ ------
Income before income taxes 0.8 3.8
Income Taxes 0.3 1.5
------ ------
Net Income 0.5% 2.3%
====== ======
</TABLE>
11
<PAGE>
Comparison of the Three Months Ended March 31, 2000 to the Three Months
Ended March 31, 1999
Operating revenue during the three-month period ended March 31, 2000
increased $30.6 million, or 18.9%, to $191.8 million, compared to $161.3 million
during the same period in 1999. U.S. Xpress revenue increased $31.4 million or
21.3%, due primarily to a 20.7% increase in revenue miles and a $5.2 million
increase in fuel surcharge revenue. Revenue miles increased due to an increase
in the average number of tractors by 339, or 7.4%, to 4,906 from 4,567 and a
10.7% increase in utilization as measured in miles per tractor per week.
CSI/Crown revenues decreased $.8 resulting in part from the closure of certain
non-performing facilities.
Operating expenses represented 97.5% of operating revenue for the three
months ended March 31, 2000, compared to 94.2% during the same period in 1999.
Salaries, wages and benefits as a percentage of revenue were 37.3% during
the three months ended March 31, 2000, compared to 39.3% during the same period
in 1999. The decrease was primarily attributable to an increase in the number
of owner-operators to 675 at March 31, 2000, compared to 488 at March 31, 1999.
All owner-operator expenses are reflected as purchased transportation.
CSI/Crown salaries, wages and benefits decreased 6.5% during the three months
ended March 31, 2000, compared to the same period in 1999 due to the facility
closures described above and efficiencies gained through a new bar-coding
process.
Fuel and fuel taxes as a percentage of operating revenue were 17.7% during
the three months ended March 31, 2000, compared to 13.3% during the same period
in 1999. This increase was due to the significant increase in fuel prices in the
three months ended March 31, 2000, compared to the same period in 1999, which
increased the Company's fuel expense by $9.0 million. The price of fuel
increased approximately 37.0%. The Company's exposure to increases in fuel
prices is managed by fuel surcharges to its customers and, on a limited basis,
by hedges against fluctuations in fuel prices.
Vehicle rents as a percentage of operating revenue were 7.7% during the
three months ended March 31, 2000, compared to 7.4% during the same period of
1999. Depreciation and amortization as a percentage of operating revenue was
4.1% for the three months ended March 31, 2000, compared to 4.3% during the same
period of 1999. The Company includes gains and losses from the sale of revenue
equipment in depreciation expense. Net gains from the sale of revenue equipment
for the three months ended March 31, 2000 were $.2 million compared to a gain of
$.5 million for the same period in 1999. Overall, as a percentage of operating
revenue, vehicle rents and depreciation were 11.8% during the three months ended
March 31, 2000, compared to 11.7% during the same period in 1999.
Purchased transportation as a percentage of operating revenue was 13.2%
during the three months ended March 31, 2000, compared to 12.0% during the same
period in 1999. The increase was primarily due to an increase of the Company's
owner-operator fleet to 675 as of March 31, 2000 from 488 as of March 31, 1999.
Owner-operators provide a tractor and driver
12
<PAGE>
incurring substantially all of their operating expenses in exchange for a fixed
payment per mile, which is included in purchased transportation. Owner-operator
miles increased to 22.7 million miles in the three months ended March 31, 2000
compared to 14.5 million miles during the same period in 1999.
Insurance premiums & claims as percentage of operating revenue was 4.0%
during the three months ended March 31, 2000, compared to 3.3% during the same
period in 1999. The increase is due primarily to increases in claims and losses
related to cargo and physical damage.
General and other operating expenses as a percentage of operating revenue
were 4.1% during the three months ended March 31, 2000, compared to 4.8% during
the same period in 1999. This decrease was primarily due to the 18.9% increase
in revenue, while many expenses included in general and other operating expenses
are relatively fixed.
Income from operations for the three months ended March 31, 2000 decreased
$4.5 million, or 48.0%, to $4.8 million from $9.4 million during the same period
in 1999. As a percentage of operating revenue, income from operations was 2.5%
for the three months ended March 31, 2000 and 5.8% for the same period in 1999.
13
<PAGE>
Liquidity and Capital Resources
The Company's primary sources of liquidity and capital resources during the
three month period ended March 31, 2000 were funds provided by operations,
borrowings under lines of credit, proceeds from sales of used revenue equipment,
and the use of long-term operating leases for revenue equipment acquisitions.
At March 31, 2000, the Company had in place a $225.0 million credit facility
with a group of banks with a weighted-average interest rate of 7.9%, of which
$28.1 million was available for borrowing. The loan matures January 15, 2002.
Interest on outstanding borrowings is based on the London Interbank Offered rate
plus applicable margins as defined in the credit agreement. The Company also
had a $10.0 million credit facility at March 31, 2000, of which $6.0 million was
available for borrowing. In 2000, the Company's primary sources of liquidity
are expected to be funds provided by operations, borrowings under lines of
credit, proceeds from sale of used revenue equipment and long-term operating
lease financing for the acquisition of revenue equipment.
Cash provided by operations was $3.4 million during the three months ended
March 31, 2000, compared to cash used in operations of $3.3 million during the
same period last year. Net cash used in investment activities was $17.3 million
in the three months ended March 31, 2000, compared to cash provided by investing
activities of $4.9 million during the same period in 1999. Of the cash used in
investment activities, $21.2 million was used to acquire additional property and
equipment for the three months ended March 31, 2000, compared to $13.3 million
during the same period of 1999. Net cash provided by financing activities was
$13.8 million during the three months ended March 31, 2000, compared to cash
used in financing activities of $4.1 million during the same period of 1999.
During the quarter, the Board of Directors authorized the repurchase of up
to $10 million of the Company's outstanding common stock. As of March 31, 2000,
the Company has acquired 93,200 common shares under the program at an average
price of $7.67 per share.
Management believes that funds provided by operations, available borrowings
under the Company's existing line of credit and long-term operating lease
financing will be sufficient to fund its cash needs and anticipated capital
expenditures through at least the next twelve months.
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
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. The Company's operating expenses also have
historically been higher in the winter weather.
14
<PAGE>
Year 2000 Compliance
The Company has completed all Year 2000 modifications to its software and
operating systems. The Company has not experienced any interruption of service
from suppliers or to customers resulting from Year 2000 system issues. In the
event that any of the Company's significant suppliers or customers have not
successfully achieved Year 2000 compliance, the Company's business or operations
could be adversely affected. The costs to the Company in achieving Year 2000
compliance were not material.
This report may contain 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.
15
<PAGE>
U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit
10.35 First Amendment to Credit Agreement dated as of January 15, 1998
among U.S. Xpress Enterprises, Inc., Wachovia Bank, N.A.,
NationsBank, N.A., BankBoston, N.A., SunTrust Bank, Chattanooga,
N.A. and the banks listed therein
10.36 Second Amendment to Credit Agreement dated as of January 15,
1998 among U.S. Xpress Enterprises, Inc., Wachovia Bank, N.A.,
NationsBank, N.A., BankBoston, N.A., SunTrust Bank, Chattanooga,
N.A. and the banks listed therein
10.37 Third Amendment to Credit Agreement dated as of January 15,
1998 among U.S. Xpress Enterprises, Inc., Wachovia Bank, N.A.,
NationsBank, N.A., BankBoston, N.A., SunTrust Bank, Chattanooga,
N.A. and the banks listed therein
10.38 Fourth Amendment to Credit Agreement dated as of January 15,
1998 among U.S. Xpress Enterprises, Inc., Wachovia Bank, N.A.,
NationsBank, N.A., BankBoston, N.A., SunTrust Bank, Chattanooga,
N.A. and the banks listed therein
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
No reports were filed on Form 8-K during the three months
ended March 31, 2000.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
U.S. XPRESS ENTERPRISES, INC.
-----------------------------
(Registrant)
Date: May 15, 2000 By: /s/ Patrick E. Quinn
------------------------------
Patrick E. Quinn
President
Date: May 15, 2000 By: /s/ Ray M. Harlin
-----------------------------
Ray M. Harlin
Principal Financial Officer
17
<PAGE>
FIRST AMENDMENT TO
CREDIT AGREEMENT
----------------
This First Amendment to Credit Agreement (this "Amendment") is dated as of
August 11, 1998 and entered into by and among U.S. XPRESS ENTERPRISES, INC.(the
"Borrower"), the BANKS listed on the signature pages hereof (the "Lenders"),
WACHOVIA BANK, N.A., as Administrative Agent, NATIONSBANK, N.A., as Syndication
Agent, BANKBOSTON, N.A.,as Documentation Agent, and SUNTRUST BANK, CHATTANOOGA,
N.A., as Co-Agent.
W I T N E S S E T H:
-------------------
WHEREAS, the parties hereto are parties to that certain Credit Agreement,
dated as of January 15, 1998 (the "Credit Agreement"); and
WHEREAS, the Borrower has requested that the Lenders increase the
Commitments under the Credit Agreement, modify the provisions of the Credit
Agreement concerning acquisitions, and make certain other changes in the Credit
Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. Amendments. The terms of the Credit Agreement are hereby
--------- -----------
amended as follows:
(a) Definitions. Section 1.1 of the Credit Agreement is amended by
-----------
deleting therefrom the definitions of "Commitment" and "Commitment Share" and
adding thereto the following defined terms:
"Commitment" means, with respect to each Bank, (i) the amount set
forth opposite the name of such Bank on the schedule below, and (ii) as to any
Bank which enters into any Assignment and Acceptance (whether as transferor
Bank or as Assignee thereunder), the amount of such Bank's Commitment after
giving effect to such Assignment and Acceptance, in each case as such amount may
be reduced from time to time pursuant to Sections 2.07 and 2.08, and "Commitment
Share" means the percentage of the total Commitment set forth opposite the name
of such Bank on the schedule below, as such percentage may be adjusted from time
to time pursuant to Section 10.08(c):
<PAGE>
<TABLE>
<CAPTION>
Bank Commitment Commitment Share
- ---- ------------ -----------------
<S> <C> <C>
Wachovia Bank, N.A. $ 33,750,000 15%
SunTrust Bank,
Chattanooga, N.A. $ 30,937,500 13.75%
NationsBank, N.A. $ 30,937,500 13.75%
BankBoston, N.A. $ 30,937,500 13.75%
AmSouth Bank $ 26,000,000 11.56%
Bank of America National
Trust & Savings Association $ 17,437,500 7.75%
Chase Bank of Texas, National
Association,
f/k/a Texas Commerce Bank
National Association $ 17,437,500 7.75%
ABN-Amro Bank, N.A. $ 17,437,500 7.75%
First American National Bank $ 11,687,500 5.19%
First Tennessee Bank, N.A. $ 8,437,500 3.75%
TOTAL COMMITMENT $225,000,000 100%
</TABLE>
(b) Representation and Warranty as to Year 2000 Compliance. A new Section
-------------------------------------------------------
5.19 is added to the Credit Agreement as follows:
"Section 5.19. Year 2000 Compliance. The Borrower has (i) initiated
---------------------
a review and assessment of all areas within its and each of its Subsidiaries'
business and operations (including those affected by suppliers and vendors) that
could be adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications used by the Borrower or any of its Subsidiaries (or its
suppliers and vendors) may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any date after December
31, 1999), (ii) developed a plan and timeline for addressing the Year 2000
Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. The Borrower reasonably believes that all
computer applications (including those of its suppliers and vendors) that are
material to its or any of its Subsidiaries' business and operations will on a
timely basis be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000 (that is,
2
<PAGE>
be "Year 2000 compliant"), except to the extent that a failure to do so could
not reasonably be expected to have Material Adverse Effect."
(c) Limitation on Acquisitions. Section 6.25(a) of the Credit Agreement
---------------------------
is deleted in its entirety and the following is substituted therefore:
"(a) during calendar year 1998, the Borrower may acquire all of the
outstanding capital stock of Victory Express, Inc. and of PST Vans, Inc.,
provided that the acquisition of the capital stock of PST Vans, Inc. is on the
terms and conditions set forth in that certain Agreement and Plan of Merger
dated as July 7, 1998, by and among PST Vans, Inc., U.S. Xpress Enterprises,
Inc., and PST Acquisition Corp., and further provided that for any Fiscal Year
thereafter the aggregate total consideration for all such acquisitions shall not
exceed $75,000,000."
(d) Covenant as to Year 2000 Compliance. A new Section 6.27 is added to
------------------------------------
the Credit Agreement as follows:
"Section 6.27. Year 2000 Compliance. The Borrower will promptly
--------------------
notify the Agent in the event the Borrower discovers or determines that any
computer application (including those of its suppliers and vendors) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 compliant on a timely basis, except to the extent that such failure
could not reasonably be expected to have a Material Adverse Effect."
Section 2. Replacement of Revolving Loan Notes. The Revolving Loan Note
--------- ------------------------------------
previously delivered by the Borrower to each Lender shall be replaced by the
execution and delivery of an Amended Revolving Loan Note, in form and substance
as set forth on Exhibit A-1 hereto, which Amended Note shall reflect the
increased Commitment from each Lender to the Borrower.
Section 3. Conditions Precedent. This First Amendment and the obligations
--------- ---------------------
of the Lenders evidenced hereunder shall not be effective until the
Administrative Agent shall have received each of the following documents, each
of which shall be satisfactory in form and substance to the Administrative
Agent:
(a) The Amended Revolving Loan Notes complying with the terms of this
Amendment, duly executed and delivered by the Borrower;
(b) Certified copies of all necessary action taken by the Borrower to
authorize the execution, delivery and performance of this Amendment and the
Revolving Loan Notes;
(c) Certificates of Incumbency and specimen signatures signed by the
appropriate authenticating person with respect to each of the officers or
other persons of the Borrower who are authorized to execute and deliver
this Amendment and the Amended Revolving Loan Notes;
3
<PAGE>
(d) A Reaffirmation of Guaranty from each Subsidiary in substantially
the form of Exhibit B-1 hereto;
(e) A Certificate executed by the Chief Executive Officer or Chief
Financial Officer of the Borrower stating that, to the best of his
knowledge and based upon an examination sufficient to enable him to make an
informed statement, (i) all of the representations and warranties made or
deemed to be made under the Credit Agreement are materially true and
correct as of the date of this First Amendment to Credit Agreement, and
(ii) no Default or Event of Default exists;
(f) A fully executed copy of the Agreement and Plan of Merger dated as
July 7, 1998, by and among PST Vans, Inc., U.S. Xpress Enterprises, Inc.,
and PST Acquisition Corp., certified by the Chief Executive Officer of the
Borrower as being in full force and effect; and
(g) The opinion of Miller & Martin, counsel to the Borrower, addressed
to the Lenders and the Agents and in form and substance satisfactory to the
Administrative Agent.
Section 4. Reference to and Effect on the Credit Agreement and
--------- ---------------------------------------------------
the Other Loan Documents.
- -------------------------
(a) On and after the date hereof, each reference in the Credit
Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to the "Credit Agreement," "thereunder," "thereof" or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended hereby.
(b) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.
(c) The execution, delivery and performance of this Amendment shall
not, except as expressly provided herein, constitute a waiver of any provision
of, or operate as a waiver of any right, power or remedy of the Administrative
Agent or any Lender under the Credit Agreement or any of the other Loan
Documents.
Section 5. Miscellaneous.
---------- --------------
(a) Section and Subsection Headings. Section and Subsection
--------------------------------
headings in this Amendment are included herein for convenience of reference only
and shall not constitute a part of this Amendment for any other purpose or be
given any substantive effect.
(b) Governing Law. This Amendment and the rights and obligations of
--------------
the parties hereunder shall be governed by, and shall be construed and enforced
in accordance with, the laws of the State of Georgia.
4
<PAGE>
(c) Counterparts; Effectiveness. This Amendment may be executed in
----------------------------
any number of counterparts and by different parties hereto and separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts taken together shall constitute but one and
the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective upon the execution of a counterpart hereof by the Borrower and the
Required Lenders and receipt by the Borrower and the Administrative Agent of
written or telephonic notification of such execution and authorization or
delivery thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
U.S. XPRESS ENTERPRISES, INC.
By:
--------------------------------------
Title:
WACHOVIA BANK, N.A.,
as Lender and Administrative Agent
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
NATIONSBANK, N.A.,
as Lender and Syndication Agent
By:
--------------------------------------
Title:
5
<PAGE>
BANKBOSTON, N.A.,
as Lender and Documentation Agent
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
SUNTRUST BANK, CHATTANOOGA, N.A.
as Lender and Co-Agent
By:
--------------------------------------
Title:
AMSOUTH BANK
By:
--------------------------------------
Title:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
f/k/a Texas Commerce Bank National
Association
By:
--------------------------------------
Title:
BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION
By:
--------------------------------------
Title:
6
<PAGE>
ABN-AMRO BANK, N.A.
By:
--------------------------------------
Title:
FIRST AMERICAN NATIONAL BANK
By:
--------------------------------------
Title:
FIRST TENNESSEE BANK, N.A.
By:
--------------------------------------
Title:
[Final signature page to First Amendment]
7
<PAGE>
SECOND AMENDMENT TO
CREDIT AGREEMENT
----------------
This Second Amendment to Credit Agreement (this "Amendment") is dated as of
August 28, 1998 and entered into by and among U.S. XPRESS ENTERPRISES, INC.(the
"Borrower"), the BANKS listed on the signature pages hereof (the "Lenders"),
WACHOVIA BANK, N.A., as Administrative Agent, NATIONSBANK, N.A., as Syndication
Agent, BANKBOSTON, N.A.,as Documentation Agent, and SUNTRUST BANK, CHATTANOOGA,
N.A., as Co-Agent.
W I T N E S S E T H:
-------------------
WHEREAS, the parties hereto are parties to that certain Credit Agreement,
dated as of January 15, 1998, as amended by that certain First Amendment to
Credit Agreement dated as of August 11, 1998 ( as such Credit Agreement may be
amended from time to time, the "Credit Agreement"); and
WHEREAS, the Borrower has requested that the Lenders amend the Credit
Agreement to permit certain Restricted Payments to be made;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. Amendment. The terms of the Credit Agreement are hereby
--------- ----------
amended by deleting Section 6.15 of the Credit Agreement in its entirety and
substituting the following therefore:
"SECTION 6.15. Restricted Payments. The Borrower will not declare or
-------------------
make any Restricted Payment unless, after giving effect thereto, (a) the
aggregate of all Restricted Payments declared or made since the Closing Date
does not exceed an amount equal to the sum of (i)$1,000,000 plus (ii) 25% of
cumulative Consolidated Net Income since the Closing Date, and (b) no Default
shall be in existence or be created thereby; provided that the Borrower may,
prior to December 31, 1998 and so long as no Default shall be in existence or be
created thereby, repurchase up to 750,000 shares of its Class A common stock at
a price per share not to exceed $16.00, and any such repurchase shall be
excluded from the computations of this Section 6.15."
Section 2. Conditions Precedent. This Second Amendment and the
--------- ---------------------
obligations of the Lenders evidenced hereunder shall not be effective until the
Administrative Agent shall have received each of the following documents, each
of which shall be satisfactory in form and substance to the Administrative
Agent:
<PAGE>
(a) A Reaffirmation of Guaranty from each Subsidiary in substantially
the form of Exhibit A-1 hereto; and
(b) A Certificate executed by the Chief Executive Officer or Chief
Financial Officer of the Borrower stating that, to the best of his
knowledge and based upon an examination sufficient to enable him to make an
informed statement, (i) all of the representations and warranties made or
deemed to be made under the Credit Agreement are materially true and
correct as of the date of this Second Amendment to Credit Agreement, and
(ii) no Default or Event of Default exists.
Section 3. Reference to and Effect on the Credit Agreement and the Other
--------- -------------------------------------------------------------
Loan Documents.
- ---------------
(a) On and after the date hereof, each reference in the Credit Agreement
to "this Agreement," "hereunder," "hereof," "herein" or words of like import
referring to the Credit Agreement, and each reference in the other Loan
Documents to the "Credit Agreement," "thereunder," "thereof" or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended hereby.
(b) Except as specifically amended by this Amendment, the Credit Agreement
and the other Loan Documents shall remain in full force and effect and are
hereby ratified and confirmed.
(c) The execution, delivery and performance of this Amendment shall
not, except as expressly provided herein, constitute a waiver of any provision
of, or operate as a waiver of any right, power or remedy of the Administrative
Agent or any Lender under the Credit Agreement or any of the other Loan
Documents.
Section 4. Miscellaneous.
--------- --------------
(a) Section and Subsection Headings. Section and Subsection headings
--------------------------------
in this Amendment are included herein for convenience of reference only
and shall not constitute a part of this Amendment for any other purpose or be
given any substantive effect.
(b) Governing Law. This Amendment and the rights and obligations of the
--------------
parties hereunder shall be governed by, and shall be construed and enforced in
accordance with, the laws of the State of Georgia.
(c) Counterparts; Effectiveness. This Amendment may be executed in
----------------------------
any number of counterparts and by different parties hereto and separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts taken together shall constitute but one and
the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective upon the execution of a counterpart hereof by the Borrower and the
Required Lenders and receipt by the Borrower and the Administrative Agent of
written or telephonic notification of such execution and authorization or
delivery thereof.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
U.S. XPRESS ENTERPRISES, INC.
By: ________________________________
Title:
WACHOVIA BANK, N.A.,
as Lender and Administrative Agent
By: ________________________________
Title:
By: ________________________________
Title:
NATIONSBANK, N.A.,
as Lender and Syndication Agent
By: ________________________________
Title:
BANKBOSTON, N.A.,
as Lender and Documentation Agent
By: ________________________________
Title:
By: ________________________________
Title:
3
<PAGE>
SUNTRUST BANK, CHATTANOOGA, N.A.
as Lender and Co-Agent
By: ________________________________
Title:
AMSOUTH BANK
By: ________________________________
Title:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
f/k/a Texas Commerce Bank National Association
By: ________________________________
Title:
BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION
By: ________________________________
Title:
ABN-AMRO BANK, N.A.
By: ________________________________
Title:
FIRST AMERICAN NATIONAL BANK
By: ________________________________
Title:
FIRST TENNESSEE BANK, N.A.
By: ________________________________
Title:
4
<PAGE>
EXHIBIT A-1
REAFFIRMATION OF GUARANTY
THIS REAFFIRMATION OF GUARANTY dated as of August 28, 1998 executed and
delivered by U.S. Xpress, Inc., a Nevada corporation, CSI/Crown, Inc., a
Georgia corporation, JTI, Inc., a Tennessee corporation, Xpress Air, Inc., a
Tennessee corporation, U.S. Xpress Leasing, Inc., a Tennessee corporation, PST
Acquisition Corp., a Nevada corporation, and Victory Express, Inc., a Ohio
corporation, (each a "Guarantor", and collectively, the "Guarantors"), in favor
of the Administrative Agent, for the ratable benefit of the Banks, under the
Credit Agreement referred to below;
WHEREAS, pursuant to that certain Credit Agreement dated as of January 15,
1998 (as the same may be amended, modified, supplemented or extended from time
to time, the "Credit Agreement") by and among U.S. XPRESS ENTERPRISES, INC., a
Nevada corporation (the "Borrower") and WACHOVIA BANK, N.A., as Administrative
Agent (the "Administrative Agent"), NATIONSBANK, N.A., as Syndication Agent,
BANKBOSTON, N.A., as Documentation Agent, and SUNTRUST BANK, CHATTANOOGA, N.A.,
as Co-Agent and certain other Banks from time to time party thereto, the Banks
have made available to the Borrower certain financial accommodations on the
terms and conditions set forth in the Credit Agreement;
WHEREAS, in connection with the Credit Agreement, each Guarantor executed
and delivered a Guaranty dated as of January 15, 1998 (the "Guaranty") in favor
of the Administrative Agent, providing for each such Guarantor's joint and
several guaranty of repayment of an amount of the indebtedness and obligations
of the Borrowers owing to the Administrative Agent and the Banks equal to the
"Guaranteed Obligations" as that term is defined in the Guaranty;
WHEREAS, the Borrower, the Banks, and the Administrative Agent have entered
into that certain Second Amendment to Credit Agreement dated as of the date
hereof (the "Amendment"), to permit certain Restricted Payments by the
Borrower;
WHEREAS, each Guarantor has reviewed the Amendment;
WHEREAS, it is a condition precedent to the effectiveness of the Amendment
that each Guarantor execute and deliver this Reaffirmation of Guaranty;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which each Guarantor hereby acknowledges, each Guarantor hereby
agrees as follows:
Section 1. Reaffirmation. Each Guarantor hereby reaffirms its continuing
obligations to the Administrative Agent and the Banks under the Guaranty and
agrees that neither the transactions contemplated by the Amendment, nor any
future agreements or arrangements whatsoever by the Administrative Agent and the
Banks with the Borrower relating to the Credit
5
<PAGE>
Agreement, any of the other Loan Documents, or any collateral thereunder, shall
in any way affect the validity and enforceability of the Guaranty or reduce,
impair or discharge the obligations of the Guarantor thereunder.
Section 2. References. Each Guarantor agrees that each reference to the
Credit Agreement or any of the other Loan Documents shall be deemed to be a
reference to the Credit Agreement or such other Loan Document as amended by the
Amendment, and as each may from time to time be further amended, supplemented,
restated or otherwise modified in the future by one or more other written
amendments or supplemental or modification agreements entered into pursuant to
the applicable provisions of the respective Loan Document.
Section 3. Defined Terms. Terms not otherwise defined herein are used
herein as defined in the Credit Agreement.
IN WITNESS WHEREOF, this Reaffirmation of Guaranty is signed, sealed and
delivered as of the date first written above.
U.S. XPRESS, INC.
By: ________________________________
Title:
CSI/CROWN, INC.
By: ________________________________
Title:
JTI, INC.
By: ________________________________
Title:
6
<PAGE>
XPRESS AIR, INC.
By: ________________________________
Title:
U. S. XPRESS LEASING, INC.
By: ________________________________
Title:
PST ACQUISITION CORP.
By: ________________________________
Title:
VICTORY EXPRESS, INC.
By: ________________________________
Title:
7
<PAGE>
THIRD AMENDMENT TO
CREDIT AGREEMENT
----------------
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Third Amendment") is
dated as of the 22nd day of February, 2000 and entered into by and among U.S.
XPRESS ENTERPRISES, INC., a Nevada corporation (the "Borrower"), the BANKS
listed on the signature pages hereof (the "Lenders"), WACHOVIA BANK, N.A., as
Administrative Agent, BANK OF AMERICA, N.A., f/k/a NationsBank, N.A. as
Syndication Agent, BANKBOSTON, N.A., as documentation Agent, and SUNTRUST BANK,
successor in interest to SunTrust Bank, Chattanooga, as Co-Agent (collectively,
the "Agents").
W I T N E S S E T H:
-------------------
WHEREAS, the parties hereto are parties to that certain Credit
Agreement, dated as of January 15, 1998, as amended by that certain First
Amendment to Credit Agreement dated as of August 11, 1998, and as further
amended by that certain Second Amendment to Credit Agreement dated as of August
28, 1998 (as such Credit Agreement may be amended from time to time, the "Credit
Agreement"); and
WHEREAS, the Borrower has requested that the Lenders amend the Credit
Agreement to permit certain Restricted Payments by the Borrower and to modify
certain other covenants contained in the Credit Agreement;
NOW, THEREFORE, for and in consideration of the above premises and other
good and valuable consideration, the receipt and sufficiency of which hereby is
acknowledged by the parties hereto, the Borrower, the Agents and the Lenders
hereby agree as follows:
1. Amendments.
-----------
(a) Section 2.05(a) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
SECTION 2.05. Interest Rates. (a) "Applicable Margin" means:
--------------
(i) for the period commencing on February 22, 2000, to and
including the next Performance Pricing Determination Date, (x) for any
Base Rate Loan, 0.00%, and (y) for any Euro-Dollar Loan, 1.75%; and
(ii) from and after such next Performance Pricing Determination
Date, (x) for any Base Rate Loan, 0.00%, (y) for each Euro-Dollar Loan,
the percentage determined on each Performance Pricing Determination Date
by reference to the table set forth below as to the ratio of
Consolidated Total Adjusted Debt to Consolidated EBILTDA for the
quarterly or annual period ending immediately prior to such Performance
Pricing Determination Date.
Ratio Applicable Margin
---------------------------------- -----------------
Less than or equal to 1.50 to 1.00 0.75%
Greater than 1.50 to 1.00 but
<PAGE>
Ratio Applicable Margin
---------------------------------- -----------------
Less than or equal to 2.00 to 1.00 1.00%
Greater than 2.00 to 1.00 but
Less than or equal to 2.50 to 1.00 1.375%
Greater than 2.50 to 1.00 but
Less than or equal to 3.00 to 1.00 1.75%
Greater than 3.00 2.25%
In determining interest for purposes of this Section 2.05 and fees
for purposes of Section 2.06, the Borrower and the Banks shall refer to
the Borrower's most recent consolidated quarterly and annual (as the
case may be) financial statements delivered pursuant to Section 6.01(a)
or (b), as the case may be. If such financial statements require a
change in interest pursuant to this Section 2.05 or fees pursuant to
Section 2.06, the Borrower shall deliver to the Administrative Agent,
along with such financial statements, a notice to that effect, which
notice shall set forth in reasonable detail the calculations supporting
the required change. The "Performance Pricing Determination Date" is the
date which is the last date on which such financial statements are
permitted to be delivered pursuant to Section 6.01(a) or (b), as
applicable. Any such required change in interest and fees shall become
effective on such Performance Pricing Determination Date, and shall be
in effect until the next performance Pricing Determination Date,
provided that: (i) changes in interest shall only be effective for
--------
Interest Periods commencing on or after the Performance Pricing
Determination Date; and (ii) no fees or interest shall be decreased
pursuant to this Section 2.05 or Section 2.06 if a Default is in
existence on the Performance Pricing Determination Date.
(b) Section 2.06(a) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
SECTION 2.06. Fees. (a) The Borrower shall pay to the Administrative
----
Agent, for the ratable account of each Bank, a commitment fee,
calculated in the manner provided in the last paragraph of Section
2.05(a)(ii), on the average daily amount of such Bank's Unused
Commitment, at a rate per annum equal to: (i) for the period commencing
on February 22, 2000, to and including the next Performance Pricing
Determination Date, 0.375%; and (ii) from and after such next
Performance Pricing Determination Date, the percentage determined on
each Performance Pricing Determination Date by reference to the table
set forth below as to the ratio of Consolidated Total Adjusted Debt to
Consolidated EBILTDA for the quarterly or annual period ending
immediately prior to such Performance Pricing Determination Date:
Ratio Commitment Fee
---------------------------------- --------------
Less than or equal to 1.50 to 1.00 0.20%
Greater than 1.50 to 1.00 but
Less than or equal to 2.00 to 1.00 0.25%
Greater than 2.00 to 1.00 but
Less than or equal to 2.50 to 1.00 0.30%
<PAGE>
Greater than 2.50 to 1.00 but
Less than or equal to 3.00 to 1.00 0.375%
Less than 3.00 0.50%
Such commitment fees shall accrue from and including the Closing Date to
but excluding the Termination Date and shall be payable on each March 31,
June 30, September 30 and December 31 and on the Termination Date.
(c) Section 6.15 of the Credit Agreement is hereby amended and restated
in its entirety as follows:
SECTION 6.15. Restricted Payments. Beginning on January 1, 2000
-------------------
and thereafter, the Borrower shall not declare or make any Restricted
Payments, provided that, so long as after giving effect thereto no Default
shall be in existence or be created thereby, the Borrower may:
(a) during the period beginning on January 1, 2000 and ending
on December 31, 2000, inclusive ("Fiscal Year 2000"), purchase, redeem or
retire up to Ten Million and No/100 Dollars ($10,000,000) of the
Borrower's Class A Capital Stock at a weighted average price per share not
to exceed Thirteen and No/100 Dollars ($13.00) (the "Repurchase");
(b) during Fiscal Year 2000, make Restricted Payments in
addition to any made pursuant to the Repurchase so long as the aggregate
of all such Restricted Payments made during Fiscal Year 2000 do not exceed
the greater of (i) five percent (5%) of cumulative Consolidated Net Income
earned during Fiscal Year 2000, or (ii) twenty-five percent (25%) of
cumulative Consolidated Net Income earned during Fiscal Year 2000 less the
amount of aggregate Restricted Payments made during Fiscal Year 2000
(including those made pursuant to the Repurchase); and
(c) during the period beginning on January 1, 2001 and ending
on the Termination Date, make Restricted Payments so long as the
Restricted Payments made during any Fiscal Year do not exceed the sum of
(x) twenty-five percent (25%) of cumulative Consolidated Net Income for
that Fiscal Year, plus (y) solely with respect to Fiscal Year 2001,
Restricted Payments permitted but not paid during Fiscal Year 2000 under
Section 6.15(b).
(d) Section 6.21 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
SECTION 6.21. Ratio of Consolidated Total Adjusted Debt to
--------------------------------------------
Consolidated EBILTDA. The ratio of consolidated Total Adjusted Debt to
- --------------------
Consolidated EBILTDA will not at any time exceed (i) 3.25 to 1.00 during the
Fiscal Quarters ending on March 31, 2000 and June 30, 2000, and (ii) thereafter,
3.00 to 1.00.
(e) Section 6.22 of the Credit Agreement is hereby amended and restated
in its entirety as follows:
<PAGE>
SECTION 6.22. Ratio of Consolidated EBILT to Consolidated Fixed
-------------------------------------------------
Charges. The ratio of (a) Consolidated EBILT to (b) Consolidated Fixed
-------
Charges will at all times exceed the following amounts during the corresponding
periods set forth below:
Period Amount
------ ------
Fiscal Quarters ending 3/31/00 through 6/30/00 1.10 to 1.00
Fiscal Quarter ending 9/30/00 1.15 to 1.00
Fiscal Quarter ending 12/31/00 1.20 to 1.00
Each Fiscal Quarter ending thereafter 1.25 to 1.00
2. Conditions Precedent. This Third Amendment and the obligations of
--------------------
the Lenders evidenced hereunder shall not be effective until (i) the execution
and delivery of this Third Amendment by each of the parties hereto and until the
Administrative Agent shall have received a Reaffirmation of Guaranty from each
Subsidiary in substantially the form of Exhibit A-1 hereto, and (ii) payment in
immediately available funds by the Borrower to the Administrative Agent, for the
benefit of each Bank, a fully-earned and non-refundable amendment fee to each
Bank equal to 0.15% times the amount of such Bank's Commitment.
3. Reference to and Effect on the Credit Agreement and the Other Loan
------------------------------------------------------------------
Documents.
---------
(a) On and after the date hereof, each reference in the Credit
Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to the "Credit Agreement," "thereunder," "thereof" or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended hereby.
(b) Except as specifically amended by this Third Amendment, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(c) The execution, delivery and performance of this Third Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of the
Administrative Agent or any Lender under the Credit Agreement or any of the
other Loan Documents.
4. Counterparts. This Third Amendment may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.
5. Section References. Section titles and references used in this Third
------------------
Amendment shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto evidenced hereby.
6. No Default; Reaffirmation of Representations and Warranties. To
-----------------------------------------------------------
induce the Agents and the Lenders to enter into this Third Amendment and to
continue to make advances pursuant to the Credit Agreement, the Borrower hereby
acknowledges and agrees that, as of the
<PAGE>
date hereof, and after giving effect to the terms hereof, there exists (i) no
Default or Event of Default thereunder, (ii) no right of offset, defense,
counterclaim, claim or objection in favor of the Borrower arising out of or with
respect to any of the loans or other obligations of the Borrower owed to the
Agents and the Lenders under the Credit Agreement and other Loan Documents, and
(iii) all of the representations and warranties made or deemed to be made under
the Credit Agreement are materially true and correct as of the date of this
Third Amendment.
7. Governing Law. This Third Amendment shall be governed by and
-------------
construed and interpreted in accordance with, the laws of the State of Georgia
without giving effect to any conflict or choice of laws principles.
8. Defined Terms. Terms not otherwise defined herein are used herein as
-------------
defined in the Credit Agreement.
[Signatures begin on following page]
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be duly executed, under seal, by their respective duly authorized officer as
of the day and year first above written.
U.S. XPRESS ENTERPRISES, INC.
By:
Title:
WACHOVIA BANK, N.A.,
as Lender and Administrative Agent
By:
Title:
BANK OF AMERICA, N.A.,
f/k/a NationsBank, N.A.,
as Lender and Syndication Agent
By:
Title:
BANKBOSTON, N.A.,
as Lender and Documentation Agent
By:
Title:
SUNTRUST BANK, successor in interest to
SunTrust Bank, Chattanooga, as Lender
and Co-Agent
By:
Title:
<PAGE>
AMSOUTH BANK
By:
------------------------------------------
Title:
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
f/k/a Texas Commerce Bank National Association
By:
------------------------------------------
Title:
BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION
By:
------------------------------------------
Title:
ABN-AMRO BANK, N.A.
By:
------------------------------------------
Title:
FIRST TENNESSEE BANK, N.A.
By:
------------------------------------------
Title:
<PAGE>
EXHIBIT A-1
REAFFIRMATION OF GUARANTY
THIS REAFFIRMATION OF GUARANTY dated as of February 22, 2000 executed
and delivered by U.S. Xpress, Inc., a Nevada corporation, CSI/Crown, Inc., a
Georgia corporation, JTI, Inc., a Tennessee corporation, Xpress Air, Inc., a
Tennessee corporation, U.S. Xpress Leasing, Inc., a Tennessee corporation, PST
Acquisition Corp., a Nevada corporation, and Victory Express, Inc., a Ohio
corporation, (each a "Guarantor", and collectively, the "Guarantors"), in favor
of the Administrative Agent, for the ratable benefit of the Banks, under the
Credit Agreement referred to below;
WHEREAS, pursuant to that certain Credit Agreement dated as of January
15, 1998 (as the same may be amended, modified, supplemented or extended from
time to time, the "Credit Agreement") by and among U.S. XPRESS ENTERPRISES,
INC., a Nevada corporation (the "Borrower") and WACHOVIA BANK, N.A., as
Administrative Agent (the "Administrative Agent"), BANK OF AMERICA, N.A. f/k/a/
NATIONSBANK, N.A., as Syndication Agent, BANKBOSTON, N.A., as Documentation
Agent, and SUNTRUST BANK, successor in interest to SunTrust Bank, Chattanooga,
as Co-Agent and certain other Banks from time to time party thereto, the Banks
have made available to the Borrower certain financial accommodations on the
terms and conditions set forth in the Credit Agreement;
WHEREAS, in connection with the Credit Agreement, each Guarantor
executed and delivered a Guaranty dated as of January 15, 1998 (the "Guaranty")
in favor of the Administrative Agent, providing for each such Guarantor's joint
and several guaranty of repayment of an amount of the indebtedness and
obligations of the Borrowers owing to the Administrative Agent and the Banks
equal to the "Guaranteed Obligations" as that term is defined in the Guaranty;
WHEREAS, the Borrower, the Banks, and the Administrative Agent have
entered into that certain Third Amendment to Credit Agreement dated as of the
date hereof (the "Amendment"), to permit certain Restricted Payments by the
Borrower and to modify certain other covenants contained in the Credit
Agreement;
WHEREAS, each Guarantor has reviewed the Amendment;
WHEREAS, it is a condition precedent to the effectiveness of the
Amendment that each Guarantor execute and deliver this Reaffirmation of
Guaranty;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which each Guarantor hereby acknowledges, each Guarantor hereby
agrees as follows:
Section 1. Reaffirmation. Each Guarantor hereby reaffirms its continuing
obligations to the Administrative Agent and the Banks under the Guaranty and
agrees that neither the transactions contemplated by the Amendment, nor any
future agreements of arrangements whatsoever by the Administrative Agent and the
Banks with the Borrower relating to the Credit Agreement, any of the other Loan
Documents, or any collateral thereunder, shall in any way affect the validity
and enforceability of the Guaranty or reduce, impair or discharge the
obligations of the Guarantor thereunder.
<PAGE>
Section 2. References. Each Guarantor agrees that each reference to the
Credit Agreement or any of the other Loan Documents shall be deemed to be a
reference to the Credit Agreement or such other Loan Document as amended by the
Amendment, and as each may from time to time be further amended, supplemented,
restated or otherwise modified in the future by one or more other written
amendments or supplemental or modification agreements entered into pursuant to
the applicable provisions of the respective Loan Document.
Section 3. Defined Terms. Terms not otherwise defined herein are used
herein as defined in the Credit Agreement.
IN WITNESS WHEREOF, this Reaffirmation of Guaranty is signed, sealed and
delivered as of the date first written above.
U.S. XPRESS, INC.
By:
-------------------------------
Title:
CSI/CROWN, INC.
By:
-------------------------------
Title:
JTI, INC.
By:
-------------------------------
Title:
XPRESS AIR, INC.
By:
-------------------------------
Title:
U.S. XPRESS LEASING, INC.
By:
-------------------------------
Title:
PST ACQUISITION CORP.
By:
-------------------------------
Title:
VICTORY EXPRESS, INC.
By:
-------------------------------
Title:
<PAGE>
FOURTH AMENDMENT TO
CREDIT AGREEMENT
----------------
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Fourth Amendment") is
dated as of the 29th day of March, 2000 and entered into by and among U.S.
XPRESS ENTERPRISES, INC., a Nevada corporation (the "Borrower"), the BANKS
listed on the signature pages hereof (the "Lenders"), WACHOVIA BANK, N.A., as
Administrative Agent, BANK OF AMERICA, N.A., f/k/a NationsBank, N.A. as
Syndication Agent, FLEET NATIONAL BANK, f/k/a BANKBOSTON, N.A. as Documentation
Agent, and SUNTRUST BANK, successor in interest to SunTrust Bank, Chattanooga,
as Co-Agent (collectively, the "Agents").
W I T N E S S E T H:
-------------------
WHEREAS, the parties hereto are parties to that certain Credit
Agreement, dated as of January 15, 1998, as amended by that certain First
Amendment to Credit Agreement dated as of August 11, 1998, as further amended by
that certain Second Amendment to Credit Agreement dated as of August 28, 1998,
and as further amended by that certain Third Amendment to Credit Agreement dated
as of February 22, 2000 (as such Credit Agreement may be amended from time to
time, the "Credit Agreement"); and
WHEREAS, the Borrower has requested that the Lenders amend the Credit
Agreement to permit certain Investments by the Borrower;
NOW, THEREFORE, for and in consideration of the above premises and other
good and valuable consideration, the receipt and sufficiency of which hereby is
acknowledged by the parties hereto, the Borrower, the Agents and the Lenders
hereby agree as follows:
1. Amendments. Section 6.17 of the Credit Agreement is hereby amended
----------
and restated in its entirety as follows:
Section 6.17. Investments. Neither the Borrower nor any of its
-----------
Subsidiaries shall make Investments in any Person except as permitted by
Section 6.16 and except Investments in (i) direct obligations of the
United States Government maturing within one year, (ii) certificates of
deposit issued by a commercial bank whose credit is satisfactory to the
Administrative Agent, (iii) commercial paper rated A1 or the equivalent
thereof by S&P or PI or the equivalent thereof by Moody's and in either
case maturing within 6 months after the date of acquisition, (iv) tender
bonds the payment of the principal of and interest on which is fully
supported by a letter of credit issued by a United States bank whose
long-term certificates of deposit are rated at least AA or the
equivalent thereof by S&P and Aa or the equivalent thereof by Moody's,
(v) acquisitions of the stock of a Person permitted by Section 6.25, or
(vi) Transplace.com, consisting of cash and certain intangible assets
(collectively, the "Transplace Investment"), so long as (a) the cash
portion of the Transplace Investment does not exceed Five Million
Dollars ($5,000,000), in the aggregate, and (b) the ownership interest
of Borrower in Transplace.com and the other terms of the Transplace
Investment are substantially as described by the Borrower to the
Administrative Agent and to the Banks in written correspondence provided
by the Borrower, and in conferences held with the Borrower, prior to
March 29, 2000; provided, however, immediately after giving effect to
-------- -------
the
<PAGE>
making of any Investment, no Default shall have occurred and be
continuing.
2. Conditions Precedent. This Fourth Amendment and the obligations of
--------------------
the Lenders evidenced hereunder shall not be effective until the execution and
delivery of this Fourth Amendment by each of the parties hereto and until the
Administrative Agent shall have received a Reaffirmation of Guaranty from each
Subsidiary in substantially the form of Exhibit A-1 hereto.
3. Reference to and Effect on the Credit Agreement and the Other Loan
------------------------------------------------------------------
Documents.
---------
(a) On and after the date hereof, each reference in the Credit
Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to the "Credit Agreement," "thereunder," "thereof" or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended hereby.
(b) Except as specifically amended by this Fourth Amendment, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(c) The execution, delivery and performance of this Fourth Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of the
Administrative Agent or any Lender under the Credit Agreement or any of the
other Loan Documents.
4. Counterparts. This Fourth Amendment may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.
5. Section References. Section titles and references used in this
------------------
Fourth Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
6. No Default; Reaffirmation of Representations and Warranties. To
-----------------------------------------------------------
induce the Agents and the Lenders to enter into this Fourth Amendment and to
continue to make advances pursuant to the Credit Agreement, the Borrower hereby
acknowledges and agrees that, as of the date hereof, and after giving effect to
the terms hereof, there exists (i) no Default or Event of Default thereunder,
(ii) no right of offset, defense, counterclaim, claim or objection in favor of
the Borrower arising out of or with respect to any of the loans or other
obligations of the Borrower owed to the Agents and the Lenders under the Credit
Agreement and other Loan Documents, and (iii) all of the representations and
warranties made or deemed to be made under the Credit Agreement are materially
true and correct as of the date of this Fourth Amendment.
7. Governing Law. This Fourth Amendment shall be governed by and
-------------
construed and interpreted in accordance with, the laws of the State of Georgia
without giving effect to any conflict or choice of laws principles.
8. Defined Terms. Terms not otherwise defined herein are used herein as
-------------
defined in the Credit Agreement.
<PAGE>
By:
Title:
FIRST TENNESSEE BANK, N.A.
By:
Title:
<PAGE>
EXHIBIT A-1
REAFFIRMATION OF GUARANTY
THIS REAFFIRMATION OF GUARANTY dated as of March 29, 2000 executed and
delivered by U.S. Xpress, Inc., a Nevada corporation, CSI/Crown, Inc., a Georgia
corporation, JTI, Inc. a Tennessee corporation, Xpress Air, Inc., a Tennessee
corporation, U.S. Xpress Leasing, Inc., a Tennessee corporation, PST Acquisition
Corp., a Nevada corporation, and Victory Express, Inc., a Ohio corporation,
(each a "Guarantor", and collectively, the "Guarantors"), in favor of the
Administrative Agent, for the ratable benefit of the Banks, under the Credit
Agreement referred to below;
WHEREAS, pursuant to that certain Credit Agreement dated as of January
15, 1998 (as the same may be amended, modified, supplemented or extended from
time to time, the "Credit Agreement") by and among U.S. XPRESS ENTERPRISES,
INC., a Nevada corporation (the "Borrower") and WACHOVIA BANK, N.A., as
Administrative Agent (the "Administrative Agent"), BANK OF AMERICA, N.A. f/k/a
NATIONSBANK, N.A., a Syndication Agent, FLEET NATIONAL BANK f/k/a BANKBOSTON,
N.A., as Documentation Agent, and SUNTRUST BANK, successor in interest to
SunTrust Bank, Chattanooga, as Co-Agent and certain other Banks from time to
time party thereto, the Banks have made available to the Borrower certain
financial accommodations on the terms and conditions set forth in the Credit
Agreement;
WHEREAS, in connection with the Credit Agreement, each Guarantor
executed and delivered a Guaranty dated as of January 15, 1998 (the "Guaranty")
in favor of the Administrative Agent, providing for each such Guarantor's joint
and several guaranty of repayment of an amount of the indebtedness and
obligations of the Borrowers owing to the Administrative Agent and the Banks
equal to the "Guaranteed Obligations" as that term is defined in the Guaranty;
WHEREAS, the Borrower, the Banks, and the Administrative Agent have
entered into that certain Fourth Amendment to Credit Agreement dated as of the
date hereof (the "Amendment"), to permit certain Investments by the Borrower;
WHEREAS, each Guarantor has reviewed the Amendment;
WHEREAS, it is a condition precedent to the effectiveness of the
Amendment that each Guarantor execute and deliver this Reaffirmation of
Guaranty;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which each Guarantor hereby acknowledges, each Guarantor hereby
agrees as follows:
Section 1. Reaffirmation. Each Guarantor hereby reaffirms its continuing
obligations to the Administrative Agent and the Banks under the Guaranty and
agrees that neither the transactions contemplated by the Amendment, nor any
future agreements or arrangements whatsoever by the Administrative Agent and the
Banks with the Borrower relating to the Credit Agreement, any of the other Loan
Documents, or any collateral thereunder, shall in any way affect the validity
and enforceability of the Guaranty or reduce, impair or discharge the
obligations of the Guarantor thereunder.
<PAGE>
Section 2. References. Each Guarantor agrees that each reference to the
Credit Agreement or any of the other Loan Documents shall be deemed to be a
reference to the Credit Agreement or such other Loan Document as amended by the
Amendment, and as each may from time to time be further amended, supplemented,
restated or otherwise modified in the future by one or more other written
amendments or supplemental or modification agreements entered into pursuant to
the applicable provisions of the respective Loan Document.
Section 3. Defined Terms. Terms not otherwise defined herein are used
herein as defined in the Credit Agreement.
IN WITNESS WHEREOF, this Reaffirmation of Guaranty is signed, sealed and
delivered as of the date first written above.
U.S. XPRESS, INC. U.S. XPRESS LEASING, INC.
By: By:
Title: Title:
CSI/CROWN, INC. PST ACQUISITION CORP.
By: By:
Title: Title:
JTI, INC. VICTORY EXPRESS, INC.
By: By:
Title: Title:
XPRESS AIR, INC.
By:
Title:
<TABLE> <S> <C>
<PAGE>
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<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
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0
0
<COMMON> 161
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<TOTAL-LIABILITY-AND-EQUITY> 425,604
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