Operational problems at its Variant trucking company led to disappointing financial results for Chattanooga's U.S. Xpress in the fourth quarter of 2021, said CEO Eric Fuller in a statement released Wednesday.
The company reported an operating loss of $5.1 million compared to operating income of $15.1 million in the same quarter of 2020, and losses per share of 10 cents compared to earnings per share of 15 cents in 2020. Analysts had predicted earnings of 8 cents per share in the fourth quarter of 2021.
In December, U.S. Xpress reported it had terminated the president of Variant, Cameron Ramsdell, shifting Variant's technology and operations teams to report directly to Fuller.
"We built Variant purposely outside of U.S. Xpress with a team that had technology expertise, but not necessarily trucking expertise, and provided them with a mandate to build a technology-enabled fleet," Fuller said in the statement. "For most of Variant's history, this framework was successful, as the fleet grew rapidly and produced a better experience for drivers and customers while enhancing utilization, safety and revenue per tractor. However, as Variant began to achieve significant scale, we found that the team needed to shift their focus from idea generation to execution to ensure that the fleet ran smoothly while maintaining its superior operating metrics."
Ramsdell had been president of Variant and over-the-road operations since September 2020, according to an SEC filing by U.S. Xpress.
"We will continue to operate, grow and improve Variant from our Atlanta location and expect Variant to continue to be the main growth engine of our truckload fleet in coming years," Fuller said in that filing.
Bringing together technology and operations reporting directly to Fuller has delivered some early improvements, Fuller said in the release of fourth quarter 2021 results.
"Since mid-December, the operational changes that we have made have translated to improvements in utilization, revenue per tractor and overhead per tractor," he said in the statement. "Looking ahead to 2022, our priorities are restoring Variant's revenue productivity and driver turnover to previous levels, lowering our overhead per tractor and continuing to sequentially grow our overall fleet size."
The size of the Variant fleet continues to expand, which Fuller pointed to as a bright spot in results for the quarter.
"The fourth quarter was marked by several achievements, as our average tractor count increased year-over-year for the first time in six quarters, fueled by Variant, which grew its fleet to more than 1,500 tractors exiting the year," he said.
In addition, Fuller said, the company's brokerage segment grew load count and revenue, and its dedicated division generated record revenue per tractor per week. Those factors contributed to increased operating revenue, which was $531.6 million in the fourth quarter of 2021, an increase of $76 million compared to the fourth quarter of 2020.
— Compiled by Staff Writer Mary Fortune