A three-year turnaround in the operations and culture at U.S. Xpress Enterprises helped the Chattanooga trucking firm firm raise more than $250 million in an initial stock offering in June and deliver its best operating ratio in two decades this spring.
Buoyed by the improving economy and an improved balance sheet, U.S. Xpress said today its second quarter operating income jumped from $2.7 million last year to $20 million this year. Operating revenues rose 21.4 percent to $449.8 million in the three months ended June 30.
In its first quarterly earnings report since its June 14th public stock offering, U.S. Xpress said it expects to continue to benefit from improving freight demand in the balance of 2018.
"The environment in the third quarter of 2018 remains strong from a rate and volume perspective and we are currently anticipating rates to further increase on a sequential basis as we continue to implement contract rate increases in both our over the road and dedicated divisions," U.S. Xpress CEO Eric Fuller said. "Overall, we remain optimistic as we continue to execute our strategy and market conditions remain strong."
During an investment call with industry analysts, Fuller said the new management team at U.S. Xpress began in 2015 a transformation of the trucking giant, which was founded by his father Max and partner Pat Quinn in 1985. As CEO, the younger Fuller said 61 of the top 94 executives has been replaced and clearer performance targets were set across the company.
"Over the last three years we have implemented a complete overhaul of the company's strategy and operations that we expect will improve execution and profitability," he said. "To achieve our goal, we changed the company's culture and recruited the expertise necessary to drive our transformation."
U.S. Xpress grew into the nation's fifth biggest trucking company in America - and the youngest to achieve more than $1 billion in revenues - after 28 business acquisitions and through above-average internal growth.
Fuller said the new management team is stressing a culture of cost management and working to continue to raise driver retention. To retain more drivers, pay for over the road drivers is up 15 percent in the past year.
Despite signs of improvement, shares of U.S. Xpress have declined since the initial public offering in June.
Since the company's stock closed on its first day of trading on June 14th at $16.68 per share, U.S. Xpress shares have declined by $3.20 per share, or 19.2 percent, to close Thursday ahead of the second quarter earnings results at $13.48 per share.