U.S. Xpress Enterprises, Inc. is selling nearly $300 million of stock today in an initial public offering that was priced below what the company had forecast last week.
The Chattanooga-based trucking company is issuing more than 18 million shares of stock on the New York Stock Exchange at an initial price of $16 per share. In documents filed with the U.S. Securities and Exchange Commission last week, the company said it expected to sell the new stock at $18 to $20 per share.
In initial trading on the New York Stock Exchange today, shares of U.S. Xpress rose above the initial offering price of $16 per share and were trading higher in early trading.
The company will sell nearly 16.7 million of shares to raise more than $250 million of new equity for the company and will sell nearly 1.39 million of other shares to pay more than $22 million to the founding families of U.S. Xpress. CEO Eric Fuller is not selling any of his stock, however.
Despite the improving economy and market for transit companies, U.S. Xpress said in its prospectus for the stock offering that it had a net loss of $3 million in calendar 2017, down from the $16.5 million lost in 2016.
But the company has grown annual revenues to more than $1.5 billion and appears to be positioning itself with the stock offering to pay down some of its debt and position itself to grow in the improving truck market. U.S. Xpress is currently the nation's fifth biggest truck carrier with a fleet of 6,800 tractors and approximately 16,000 trailers, including 1,300 tractors provided by independent contractors.
"Over the last three years, we have recruited and developed new executive and operational management teams with significant industry experience and instilled a new culture of professional management," the company said in its SEC filings. "These changes, which are ongoing, helped us to maintain relatively stable profitability during the weak truckload market of 2016 and early 2017 and drive significant improvements to profitability during the strong truckload market beginning in the second half of 2017."
In the first three months of 2018, U.S. Xpress earned nearly $1.16 million, compared with a loss of more than $4.4 million a year ago.
U.S. Xpress was previously a publicly traded on the Nasdaq Exchange from 1994 to 2007, but the founding co-CEOs of the company, Max Fuller and Pat Quinn, took the truck carrier private more than a decade ago.
The company's new Class A common stock will be traded on the NYSE under the symbol "USX." The offering is expected to close on Monday June 18, according to a company statement.
BofA Merrill Lynch and Morgan Stanley are acting as lead book-running managers for the offering. J.P. Morgan and Wells Fargo Securities are acting as additional book-running managers, and Stephens Inc., Stifel, and Wolfe Capital Markets and Advisory are acting as co-managers for the offering.