U.S. Xpress says 2Q revenue up, income down

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U.S. Xpress Enterprises on Wednesday, Feb. 25, announced operating revenue and earnings for the second quarter and six months ended June 30.

Revenue for the second quarter of 2007 increased 2.8 percent to $400.3 million compared with $389.5 million in the second quarter of 2006. Net income for the second quarter was $2.7 million compared with net income of $5.7 million in the prior-year period.

For the six months ended June 30, revenue increased 10.5 percent to $761.2 million from $689.2 million in the prior-year period. For the first six months of 2007, the company reported net income of $0.1 million compared with net income of $6.5 million for the prior-year period.

During the second quarter, truckload revenue, excluding the effect of fuel surcharges, increased 3.8 percent to $319.6 million from $307.9 million a year ago. Truckload operating income for the quarter decreased 38.4 percent to $8.5 million from $13.8 million in the prior-year quarter. Revenue of Xpress Global Systems increased to $25.8 million in the second quarter compared with $25.6 million in the prior-year period. Xpress Global Systems’ operating income for the second quarter increased 17.6 percent to $2.0 million from $1.7 million in the prior-year period.

“Although our truckload operating results improved significantly from the first quarter of 2007, continuing softness in truckload freight demand in the second quarter resulted in a difficult pricing environment and lower utilization compared to the prior-year second quarter, adversely impacting truckload operating income,” said Pat Quinn, co-chairman of Chattanooga, Tenn.-based U.S. Xpress. “On a positive note, Xpress Global achieved its sixth consecutive quarter of improved year-over-year quarterly operating income.”

In response to the June 22 announcement by Quinn and co-chairman Max Fuller to commence a tender offer for all of U.S. Xpress’ outstanding Class A common stock at an offer price of $20 per share, the company’s board of directors has appointed a special committee comprised solely of independent directors to evaluate the offer. The special committee has engaged an independent legal adviser and is in the process of engaging an independent financial adviser to assist the special committee in its review.

In response to an inquiry by the special committee, Fuller and Quinn have informed the company they will defer formal commencement of the tender offer for a short time to allow the special committee to be in a better position to respond. Fuller and Quinn, who now expect to commence the offer in early August, also informed U.S. Xpress officials that parties have been proceeding diligently with the preparation of offer materials, definitive financing arrangements and regulatory filings.