EARNINGS CALL SUPPLEMENT
First Quarter 2021
DISCLAIMER AND FORWARD-LOOKING STATEMENTS
Forward-Looking Statements‐
This presentation (the "Presentation") contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward looking statements are made pursuant to the provisions
of the Private Securities Litigation Reform Act of 1995, as amended. These forward looking | statements, which involve risks and uncertainties, are | |
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generally identified by the use of forward looking terminology, including the terms | "anticipate," "believe," "continue," "could," "design," "estimate," | |
‐ | ||
"expect," "focus," "forecast," "foresee," | "goal," "hope," "intend," "likely," "may," "might," "optimistic," "plan," "potential," "predict," "project," "seek," | |
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"should," "strategy," "target," "will," "would" and, in each case, their negative or other various or comparable terminology. All statements other than
statements of historical facts contained in this Presentation, including statements regarding the Company's strategy, future operations,‐ future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause the Company's actual results,
performance‐ or achievements to be materially different from any future results, performance or achievements expressed or implied by the
forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled "Item 1A. Risk Factors," set forth in our Annual Report on Form 10-K for the year ended December 31, 2020, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.". Readers should review and consider such risk factors along with‐ various disclosures in our press releases, stockholder reports, and other filings with the Securities and Exchange Commission. These forward looking statements reflect the Company's views with respect to future events as of the date of this Presentation‐ and are based on assumptions and‐ subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward looking statements. These forward looking statements represent the Company's estimates and assumptions‐only as of the date of this Presentation and, except as required by law, the Company undertakes no obligation to update or review publicly any forward looking statements, whether as a result of new information, future events or otherwise after the date of this Presentation. You should read this Presentation with‐ the understanding that the Company's actual future results may be materially different from what we expect. The Company qualifies all of its forward looking statements by these cautionary statements.
Non-GAAP Financial Measures
In addition to our net income determined‐in accordance with U.S. generally accepted accounting principles (''GAAP''), we evaluate operating performance using certain non GAAP measures, including Adjusted Operating Ratio, Adjusted Operating Income (Loss), Adjusted Net Income (Loss)
Attributable‐ to Controlling Interest, and Adjusted EPS (on a consolidated and, as applicable, segment basis). Management believes the use of
non GAAP measures assists investors and securities analysts in understanding‐the ongoing operating performance of our business by allowing more effective comparison between periods. Further, management uses non GAAP Adjusted Operating Ratio, Adjusted Operating Income (Loss), Adjusted
Net Income (Loss) Attributable to Controlling‐ ‐ Interest, and‐ Adjusted EPS measures on a supplemental basis to remove items that may not be an indicator of performance from period to period. The‐ non GAAP information provided is used by our management and may not be comparable to similar measures disclosed by other companies. The non GAAP measures used herein have limitations as analytical tools and should not be considered measures‐ of income generated by our business or discretionary cash available to us to invest in the growth of our business. You should not consider the non GAAP measures used herein in isolation or as substitutes for‐ analysis of our results as reported under GAAP. Management compensates for these limitations by relying primarily on GAAP results and using non GAAP financial measures on a supplemental basis. Refer to the Appendix section of this Presentation for definitions of Adjusted Operating Ratio, Adjusted Operating Income (Loss), Adjusted Net Income (Loss) Attributable to Controlling Interest, and Adjusted EPS and reconciliations of those measures to the most directly comparable GAAP measures.
EARNINGS SUPPLEMENT | 2 |
THEMES FOR THE QUARTER
Patience and Discipline Paying Off
- Positive Quarter with Strong Runway
- Variant grew sequentially by more than 36% during the quarter to 951 tractors and achieved revenues of $39.5 million
- Variant fleet is expected to grow to 1,500 over the balance of 2021 at this scale Variant would generate a revenue run rate of ~ $300 million
- Qualified driver acquisition costs accelerated through the quarter and a tight driver market is expected through 2021
- Brokerage revenues grew 62.1% y/o/y to $81.8 million as digital initiatives continue to gain traction
- Year over year results
- ~150 BPS y/o/y improvement in Truckload operating ratio (~170 BPS improvement in adjusted operating ratio)
- OTR improved due to higher rate per mile combined with lower claims expense and continued execution of digital initiatives
- Dedicated continued to generate more than $4,000 per truck per week for the eighth consecutive quarter
- 1,020 BPS y/o/y improvement in Brokerage operating ratio. Operating ratio improved 50 basis points sequentially from 4Q 2020
- Operating leverage expected from:
- USX Specific: Expansion of Variant, per mile fixed/variable cost reduction
- Market Based: Rate cycle/Industry capacity reduction
EARNINGS SUPPLEMENT | 3 |
UPDATE ON TECHNOLOGY INITIATIVES
Technology Initiatives:
Applying Technology to Streamline the Value Chain from Booking Through Collection
Frictionless Order: | Variant: | ||
• | Elimination of | • | App-based driver |
manual touchpoints | experience | ||
• | Simplifying legacy | • | Leverage's system |
operating system - | improvements from | ||
improves velocity | Frictionless Order | ||
• | Improve driver | • | Revolutionary technology |
experience | changes for trucking | ||
• | Reduce driver | industry | |
turnover | • | Optimization and | |
automation of many | |||
legacy manual processes |
Brokerage:
- New leadership in place
- Acquisition of digital platform as base for technology development
- Foundation in place that we believe will allow for significant scalability
Developing Scalable Business Models
EARNINGS SUPPLEMENT | 4 |
XPRESS TECHNOLOGIES OVERVIEW
What is Xpress
Technologies?
- A reimagined asset-light marketplace that underpins the digital transformation of U.S. Xpress
- Purpose-built,cloud native software tools to increase productivity and enhance success for shippers, carriers and our employees
- Increased market liquidity by delivering a differentiated experience for carriers using advanced machine learning techniques
How will it roll out?
- Two-phasedapproach to enhance experience, service and engagement across the XT marketplace
- Acquisition of a transportation data services company was finalized in May 2020
- Significant enhancement of operational resilience to galvanize business for technological transformation & greater scale
- Second phase focused on driving deeper innovation across the transportation value chain
- Initial release of primary products has enabled the incremental digitization of our marketplace, starting with automation of load booking & tracking
Initial Results
- Consecutive profitable quarters (Q4 20-Q1 21) for first time since 1H19
- 65-70%of loads allocated in a digitally-enabled manner (4.5x increase since Q120)
- 54% of Q121 volume was tracked digitally (3.25x increase since Q120)
- 4% improvement in Buy to Market* performance metric, indicating improved carrier costs relative to external benchmark
- Improved service levels
EARNINGS SUPPLEMENT | *Buy to Market (BtM) - internal cost per mile (excl. FSC) / DAT RateView average cost per mile | 5 |
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U.S. Xpress Enterprises Inc. published this content on 22 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 April 2021 20:27:03 UTC.