Contact:
Ray Harlin
Chief Financial Officer
423-510-3323

U.S. XPRESS ENTERPRISES, INC. REPORTS SECOND QUARTER RESULTS
39% Revenue Growth and Significant Earnings Improvement

CHATTANOOGA, Tenn. (July 20, 2006) - U.S. Xpress Enterprises, Inc. (NASDAQ/NM: XPRSA) announced operating revenue and earnings for the second quarter and six months ended June 30, 2006.

Financial Highlights
Revenue for the second quarter of 2006 increased 39.2% to $389.5 million compared with $279.9 million in the second quarter of 2005. Net income for the second quarter increased to $5.7 million, or $0.37 per diluted share, compared with net income of $482,000, or $0.03 per diluted share in the prior year period. The 2005 second quarter results include a one-time pre-tax charge of $2.8 million related to the sale and exit of its airport-to-airport business. Before the one-time charge, the Company reported net income of $1.9 million, or $0.12 per diluted share, in the prior-year period.

For the six months ended June 30, 2006, revenue increased 25.5% to $689.2 million from $549.0 million in the prior-year period. For the first six months of 2006, the Company reported net income of $6.5 million, or $0.42 per diluted share, compared with a net loss (after the one-time charge) of $1.6 million, or $0.10 per diluted share, for the prior-year period. Before the charge, the Company reported a net loss of $196,000, or $0.01 per diluted share, for the first six months of 2005.

On February 28, 2006, the Company acquired additional equity in both Arnold Transportation and Total Transportation, increasing its ownership interest in each to 80% from 49%. Accordingly, the financial results from February 28, 2006 of Arnold and Total are included in the Company’s consolidated financial statements. Consolidated revenue, excluding fuel surcharge, and operating income for the second quarter of 2006 includes $78.3 million of revenue and $4.8 million in operating income of Arnold and Total. The six months ended June 30, 2006, includes $107.4 million of revenue and $6.6 million in operating income of Arnold and Total.

Truckload Operations
During the second quarter, truckload revenue, excluding the effect of fuel surcharges, increased 38.4% to $307.9 million from $222.4 million a year ago. The increase in truckload revenue was driven by contributions from Arnold and Total and a 3.2% increase in the revenue of the U.S. Xpress truckload operations to $229.6 million. Truckload operating income for the quarter increased by 93.3% to $13.8 million from $7.1 million in the prior-year quarter due to the consolidation of Arnold and Total, which contributed $4.8 million in operating income, and a 25.6% increase in operating income to $9.0 million for the U.S. Xpress truckload operations. The improvement in operating income of the U.S. Xpress truckload operations reflects improved yields driven by a 3.7% increase in revenue per revenue mile and a lower percentage of empty miles.

Co-Chairman, Patrick Quinn, stated, "We are pleased with the improvements realized in our U.S. Xpress truckload operations during the second quarter. The results demonstrate the progress we are making in improving the performance of our over-the-road and regional solo fleets as well as the benefits of a continued focus on growing our dedicated, expedited truck and rail services. The results of Arnold and Total, which were in line with our expectations, also contributed to the strong earnings growth in the quarter."

Xpress Global Systems
Revenue of Xpress Global Systems declined to $25.6 million in the quarter compared with $37.8 million in the comparable 2005 quarter due primarily to the sale and exit from the airport-to-airport business in the second quarter of 2005. Xpress Global Systems’ operating income for the second quarter was $1.7 million compared with a $5.6 million operating loss in the prior-year quarter, which includes a $2.8 million one-time charge for the loss on the sale of the airport-to-airport business.

(More)


XPRSA Reports Second Quarter Results
Page 2
July 20, 2006


Mr. Quinn added, "The management team at Xpress Global Systems did an excellent job of executing its business plan during what is seasonally a strong quarter for its floor covering business. The improvements in customer on time service and the yield management programs we implemented over the last year continue to pay off for us, and we have exhibited much better cost control.

"Looking forward, for the remainder of the year we are expecting a solid freight demand environment, along with constrained capacity growth in the truckload market due to a very tight driver market. Assuming these factors and given the turnaround of Xpress Global, the success of Arnold and Total, and the improving trends in our U.S. Xpress truckload operations, we continue to be optimistic about the remainder of the year."

U.S. Xpress Enterprises will host a conference call to discuss second quarter results on July 21, 2006, at 11:00 a.m. EDT. The number to call for this interactive teleconference is (913) 981-5571. A replay of the conference call will be available through July 28, 2006, by dialing (719) 457-0820 and entering the confirmation number, 4324249.

The live broadcast of U.S. Xpress Enterprises' quarterly conference call will be available online at the Company's website, www.usxpress.com, as well as http://www.videonewswire.com/event.asp?id=34455 on July 21, 2006, beginning at 11:00 a.m. EDT. The online replay will follow shortly after the call and continue through August 21, 2006.

         U.S. Xpress Enterprises, Inc. is the fifth largest publicly owned truckload carrier in the United States, measured by revenue.  The Company provides dedicated, regional, and expedited team truckload services throughout North America, with regional capabilities in the West, Midwest, and Southeastern United States.  The Company is one of the largest providers of expedited and time-definite services in the truckload industry and is a leader in providing expedited intermodal rail services. Xpress Global Systems, Inc., a wholly owned subsidiary, is a provider of transportation, warehousing, and distribution services to the floor covering industry.  The Company participates in logistics services through its joint ownership of Transplace, an Internet-based global transportation logistics company.  Additionally, U.S. Xpress has an 80% ownership interest in Arnold Transportation Services, Inc., which provides regional, dedicated, and medium length-of-haul services with a fleet of approximately 1,500 trucks, and Total Transportation of Mississippi and affiliated companies, a truckload carrier that provides medium length of haul and dedicated dry-van service with a fleet of approximately 500 trucks primarily in the Eastern United States. Please visit the Company's website at www.usxpress.com.
 
This press release contains certain statements that may be considered "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements generally may be identified by their use of terms or phrases such as "expects," "estimates," "anticipates," "projects," "believes," "plans," "intends," "may," "will," "should," "could," "potential," "continue," "future," and terms or phrases of similar substance. In this press release, these statements include, without limitation, statements relating to anticipated freight demand, competition for drivers, tractor capacity, and the performance of truckload operations, Arnold and Total, and Xpress Global Systems. The following factors, among others, could cause actual results to differ materially from those expressed in forward-looking statements: the risk that we will be unable to obtain the level of rate increases and improvement in freight mix that we expect regardless of increased freight volumes; the risk that our perception of industry fundamentals is incorrect and an improvement in freight volumes and pricing does not occur; the risk that the actions we have taken to increase margins and reduce costs in our Xpress Global segment will not be effective; further increases in the compensation of or difficulty in attracting and retaining qualified drivers and independent contractors; further fluctuations in the price or availability of diesel fuel or in surcharge collection; recessionary economic cycles and downturns in customers' business cycles; excess tractor or trailer capacity in the trucking industry; decreased demand for our services or loss of one or more of our major customers; surplus inventories; strikes, work slow downs, or work stoppages at our facilities or at customers, ports, or other shipping related facilities; increases in interest rates, fuel taxes, tolls, and license and registration fees; increases in the prices paid for new revenue equipment and changes in the resale value of our used equipment; elevated experience in the frequency and severity of claims relating to accident, cargo, workers' compensation, health, and other claims; increased insurance premiums; fluctuations in claims expenses that result from high self-insured retention amounts and differences between estimates used in establishing and adjusting claims reserves and actual results over time; adverse changes in claims experience and loss development factors; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, and intermodal competitors; regulatory requirements that increase costs or decrease efficiency, including revised hours-of-service requirements for drivers and new emissions control regulations; our ability to execute our business strategy; our ability to grow our revenue at historical rates; the loss of one of our senior officers; our ability to finance revenue equipment purchases and other capital requirements, and to do so on acceptable terms; the risk that our substantial indebtedness and operating lease obligations could adversely impact our ability to respond to changes in our industry or business, or that we could be unable to comply with the restrictive and financial covenants contained therein; the risk that railroad service instability could increase our costs and reduce our ability to offer expedited intermodal rail service; the risk of adverse results at Arnold Transportation or Total Transportation of Mississippi that are included in our results; our ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations; the number of shares repurchased, if any; and the effects of repurchasing the shares on debt, equity, and liquidity; Readers should review and consider these factors along with our various disclosures in filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.
 
(More)


 
 
 

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(In Thousands, Except Per Share Data)
 
(Unaudited)
 
                   
 
 
Three Months Ended
 
Six Months Ended 
 
   
June 30,
 
June 30,
 
   
2006
 
2005
 
2006
 
2005
 
                   
Operating Revenue:
                 
  Revenue, before fuel surcharge
 
$
331,976
 
$
252,476
 
$
594,441
 
$
500,983
 
  Fuel surcharge
   
57,486
   
27,408
   
94,730
   
48,045
 
     Total operating revenue
 
$
389,462
 
$
279,884
 
$
689,171
 
$
549,028
 
                           
Operating Expenses:
                         
  Salaries, wages and benefits
   
127,141
   
99,865
   
229,995
   
195,172
 
  Fuel and fuel taxes
   
89,196
   
53,741
   
155,533
   
101,110
 
  Vehicle rents
   
19,333
   
17,012
   
37,731
   
34,468
 
  Depreciation and amortization, net of gain on sale
   
15,794
   
11,193
   
27,668
   
22,529
 
  Purchased transportation
   
61,671
   
46,417
   
108,269
   
98,089
 
  Operating expense and supplies
   
24,866
   
18,991
   
44,101
   
38,524
 
  Insurance premiums and claims
   
16,285
   
10,991
   
29,553
   
21,573
 
  Operating taxes and licenses
   
4,328
   
3,470
   
7,991
   
6,734
 
  Communications and utilities
   
3,606
   
2,606
   
6,478
   
5,603
 
  General and other operating
   
11,712
   
11,285
   
21,564
   
22,868
 
  Loss on sale and exit of business
   
-
   
2,787
   
-
   
2,787
 
     Total operating expenses
   
373,932
   
278,358
   
668,883
   
549,457
 
                           
Income (Loss) from Operations
   
15,530
   
1,526
   
20,288
   
(429
)
 
                 
                   
Interest Expense, net
   
4,690
   
1,758
   
7,789
   
3,785
 
Early extinguishment of debt
   
-
   
-
   
-
   
201
 
Equity in (income) loss of affiliated companies
   
341
   
(935
)
 
539
   
(1,251
)
Minority Interest
   
365
   
-
   
523
   
-
 
     
5,396
   
823
   
8,851
   
2,735
 
 
                 
Income (Loss) Before Income Taxes
   
10,134
   
703
   
11,437
   
(3,164
)
 
                 
Income Tax Provision (Benefit)
   
4,410
   
221
   
4,978
   
(1,519
)
 
                 
Net Income (Loss)
 
$
5,724
 
$
482
 
$
6,459
 
$
(1,645
)
                           
Earnings (Loss) Per Share - basic
 
$
0.37
 
$
0.03
 
$
0.42
 
$
(0.10
)
Weighted average shares - basic
   
15,321
   
16,196
   
15,323
   
16,223
 
Earnings (Loss) Per Share - diluted
 
$
0.37
 
$
0.03
 
$
0.42
 
$
(0.10
)
Weighted average shares - diluted
   
15,614
   
16,250
   
15,559
   
16,223
 
 
 
 
 

 
 
 

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(In Thousands, Except Per Share Data - Net of Fuel Surcharge Revenue)
 
(Unaudited)
 
                   
                   
 
 
Three Months Ended 
 
Six Months Ended
 
   
June 30,
 
June 30,
 
   
2006
 
2005
 
2006
 
2005
 
Operating Revenue
   
100
%
 
100
%
 
100
%
 
100
%
 
                 
Operating Expenses:
                 
  Salaries, wages and benefits
   
38.3
   
39.6
   
38.7
   
39.0
 
  Fuel and fuel taxes
   
9.5
   
10.4
   
10.2
   
10.6
 
  Vehicle rents
   
5.8
   
6.7
   
6.4
   
6.9
 
  Depreciation and amortization, net of gain on sale
   
4.8
   
4.4
   
4.7
   
4.5
 
  Purchased transportation
   
18.6
   
18.4
   
18.2
   
19.6
 
  Operating expense and supplies
   
7.5
   
7.5
   
7.4
   
7.7
 
  Insurance premiums and claims
   
4.9
   
4.4
   
5.0
   
4.3
 
  Operating taxes and licenses
   
1.3
   
1.4
   
1.3
   
1.3
 
  Communications and utilities
   
1.1
   
1.0
   
1.1
   
1.1
 
  General and other operating
   
3.5
   
4.5
   
3.6
   
4.6
 
  Loss on sale and exit of business
   
0.0
   
1.1
   
0.0
   
0.5
 
     Total operating expenses
   
95.3
   
99.4
   
96.6
   
100.1
 
                           
Income (Loss) from Operations
   
4.7
   
0.6
   
3.4
   
(0.1
)
 
                 
                   
Interest Expense, net
   
1.4
   
0.7
   
1.3
   
0.7
 
Early extinguishment of debt
   
0.0
   
0.0
   
0.0
   
0.0
 
Equity in (income) loss of affiliated companies
   
0.1
   
(0.4
)
 
0.1
   
(0.2
)
Minority Interest
   
0.1
   
0.0
   
0.1
   
0.0
 
     
1.6
   
0.3
   
1.5
   
0.5
 
 
                 
Income (Loss) Before Income Taxes
   
3.1
   
0.3
   
1.9
   
(0.6
)
 
                 
Income Tax Provision (Benefit)
   
1.3
   
0.1
   
0.8
   
(0.3
)
 
                 
Net Income (Loss)
   
1.8
%
 
0.2
%
 
1.1
%
 
(0.3
)%
 
                 
 
 
 

 

U.S. XPRESS ENTERPRISES, INC.
KEY OPERATING FACTORS
                                   
   
Three Months Ended
         
Six Months Ended
         
   
June 30,
         
June 30,
         
           
         
 
   
2006
 
2005
 
 Change
 
2006
 
2005
 
 Change
 
OPERATING RATIO (1)
   
95.3
%
 
99.4
%
       
-4.1
%
 
96.6
%
 
100.1
%
       
-3.5
%
                                                   
OPERATING REVENUE:
                                                 
  Truckload, net of fuel surcharge (2)
 
$
307,913
 
$
222,428
         
38.4
%
$
549,220
 
$
437,549
         
25.5
%
  Fuel Surcharge
   
57,486
   
27,408
         
109.7
%
 
94,730
   
48,045
         
97.2
%
  Xpress Global Systems
   
25,607
   
37,829
         
-32.3
%
 
48,040
   
78,858
         
-39.1
%
  Inter-company
   
(1,544
)
 
(7,781
)
       
-80.2
%
 
(2,819
)
 
(15,424
)
       
-81.7
%
Total Operating Revenue
 
$
389,462
 
$
279,884
         
39.2
%
$
689,171
 
$
549,028
         
25.5
%
                                                   
OPERATING INCOME (LOSS):
                                                 
  Truckload (2)
 
$
13,836
 
$
7,158
         
93.3
%
$
18,225
 
$
8,660
         
110.5
%
  Xpress Global Systems (3)
   
1,694
   
(5,632
)
       
n/a
   
2,063
   
(9,089
)
       
n/a
 
Total Operating Income
 
$
15,530
 
$
1,526
         
n/a
 
$
20,288
 
$
(429
)
       
n/a
 
                                                   
TRUCKLOAD STATISTICS: (2)
                                                 
Revenue Per Mile (4)
 
$
1.616
 
$
1.516
         
6.6
%
$
1.585
 
$
1.500
         
5.7
%
                                                   
Revenue Per Total Mile (4)
 
$
1.422
 
$
1.345
         
5.7
%
$
1.395
 
$
1.336
         
4.4
%
                                                   
Tractors (at end of period)-
                                                 
  Company Owned
   
6,016
   
4,523
         
33.0
%
 
6,016
   
4,523
         
33.0
%
  Owner Operators
   
914
   
519
         
76.1
%
 
914
   
519
         
76.1
%
Total Tractors (at end of period)
   
6,930
   
5,042
         
37.4
%
 
6,930
   
5,042
         
37.4
%
                                                   
Average Number of Tractors
  in Fleet During Period
   
6,943
   
4,966
         
39.8
%
 
6,296
   
4,976
         
26.5
%
                                                   
Average Revenue Miles Per
  Tractor Per Period (4)(5)
   
24,624
   
25,619
         
-3.9
%
 
48,796
   
50,136
         
-2.7
%
                                                   
Average Revenue Per Tractor
  Per Period (4)(5)
 
$
40,577
 
$
39,781
         
2.0
%
$
79,154
 
$
77,402
         
2.3
%
                                                   
Total Revenue Miles (6)
   
188,824
   
144,757
         
30.4
%
 
342,734
   
287,566
         
19.2
%
                                                   
Total Miles (6)
   
214,563
   
163,085
         
31.6
%
 
389,307
   
322,938
         
20.6
%
                                                   
Average Length of Haul
   
584
   
650
         
-10.2
%
 
601
   
675
         
-11.0
%
                                                   
Empty Mile Percentage
   
12.00
%
 
11.24
%
       
6.8
%
 
11.96
%
 
10.95
%
       
9.2
%
                                                   
   
June 30, 2006 
               
December 31, 2005
             
BALANCE SHEET DATA:
                                                 
Total Assets
       
$
820,697
                   
$
607,384
             
Total Equity
         
238,480
                     
232,412
             
Long-term Debt, including
  Current Maturities and Securitization
         
317,698
                     
177,155
             
                                                   
(1)  Operating ratio as reported in this press release is based upon total operating expenses, net of fuel surcharges, as a percentage of revenue, before fuel surcharge.
 
(2)  Data for truckload includes data for all truckload operations, including the following from their dates of consolidation: Arnold Transportation, Inc. and Total Transportation of Mississippi, Inc. in March 2006.
 
(3)  Includes the one-time pre-tax charge of $2.8 million related to the sale and exit of the airport-to-airport business.
 
(4)  Net of fuel surcharge revenues.
 
(5)  Excludes revenue and miles from expedited intermodal rail services.
 
(6)  Includes miles of expedited intermodal rail services
 
- END -

The following information was filed by Us Xpress Enterprises Inc (USX) on Friday, July 21, 2006 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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