10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

or

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                        to

Commission File Number:  001-38528

U.S. Xpress Enterprises, Inc.

(Exact name of registrant as specified in its charter)

Nevada	62-1378182
(State or other jurisdiction of incorporation	(I.R.S. Employer Identification No.)
or organization)
4080 Jenkins Road
Chattanooga, Tennessee	37421
(Address of principal executive offices)	(Zip Code)

(423) 510-3000

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [   ]

Indicate by check mark whether the registrant has submitted electronically  every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes [X] No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]	Accelerated filer [   ]
Non-accelerated filer   [X]	Smaller reporting company [   ]
	Emerging growth company [   ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [   ] No [X]

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value	USX	The New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date April 30, 2019.

Class A Common Stock, $0.01 par value: 32,994,211

Class B Common Stock, $0.01 par value: 15,616,551

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
		Page Number
Item 1.	Unaudited Condensed Consolidated Financial Statements Three Months Ended March 31, 2019 and 2018
	Unaudited Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Comprehensive Income	4
	Unaudited Condensed Consolidated Statements of Cash Flows	5
	Unaudited Condensed Consolidated Statement of Stockholder’s Equity (Deficit)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 4.	Controls and Procedures	35
	PART II OTHER INFORMATION
		Page Number
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38

Page 2

U.S. Xpress Enterprises, Inc.
Unaudited Condensed Consolidated Balance Sheets
March 31, 2019 and December 31, 2018
	March 31,			December 31,
(in thousands, except share amounts)	2019			2018
Assets
Current assets
Cash and cash equivalents	$	2,095		$	9,892
Customer receivables, net of allowance of $101 and $59 at March 31, 2019 and December 31, 2018, respectively		185,710			190,254
Other receivables		19,474			20,430
Prepaid insurance and licenses		15,793			11,035
Operating supplies		7,548			7,324
Assets held for sale		8,086			33,225
Other current assets		15,860			13,374
Total current assets		254,566			285,534
Property and equipment, at cost		904,209			898,530
Less accumulated depreciation and amortization		(385,281	)		(379,813	)
Net property and equipment		518,928			518,717
Other assets
Operating lease right of use assets		186,941			-
Goodwill		57,708			57,708
Intangible assets, net		28,492			28,913
Other		24,858			19,615
Total other assets		297,999			106,236
Total assets	$	1,071,493		$	910,487
Liabilities and Stockholder's Equity
Current liabilities
Accounts payable	$	63,368		$	63,808
Book overdraft		5,233			-
Accrued wages and benefits		23,588			24,960
Claims and insurance accruals, current		43,586			47,442
Other accrued liabilities		8,386			8,120
Liabilites associated with assets held for sale		-			6,856
Current portion of operating lease liabilities		56,893			-
Current maturities of long-term debt and finance leases		95,117			113,094
Total current liabilities		296,171			264,280
Long-term debt and finance leases, net of current maturities		314,049			312,819
Less debt issuance costs		(1,264	)		(1,347	)
Net long-term debt and finance leases		312,785			311,472
Deferred income taxes		21,385			19,978
Long-term liabilities associated with assets held for sale		-			8,353
Other long-term liabilities		6,483			7,713
Claims and insurance accruals, long-term		60,518			60,304
Noncurrent operating lease liabilities		129,927			-
Commitments and contingencies (Notes 6 and 7)		-			-
Stockholders' Equity
Common stock Class A, $.01 par value, 140,000,000 shares authorized at March 31, 2019 and December 31, 2018,32,930,419 and 32,859,292 issued and outstanding at March 31, 2019 and December 31, 2018, respectively		329			329
Common stock Class B, $.01 par value, 35,000,000 authorized at March 31, 2019 and December 31, 2018, 15,616,551 and 15,486,560 issued and outstanding at March 31, 2019 and December 31, 2018, respectively		156			155
Additional paid-in capital		252,559			251,742
Accumulated deficit		(12,614	)		(17,335	)
Stockholders' equity		240,430			234,891
Noncontrolling interest		3,794			3,496
Total stockholders' equity		244,224			238,387
Total liabilities and stockholders' equity	$	1,071,493		$	910,487
See Notes to Unaudited Condensed Consolidated Financial Statements

Page 3

U.S. Xpress Enterprises, Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Income
Three Months Ended March 31, 2019 and 2018
	Three Months Ended
	March 31,
(in thousands, except per share amounts)	2019		2018
Operating revenue
Revenue, before fuel surcharge	$	375,312	$	382,858
Fuel surcharge		40,051		42,850
Total operating revenue		415,363		425,708
Operating expenses
Salaries, wages, and benefits		124,563		132,924
Fuel and fuel taxes		46,904		58,389
Vehicle rents		18,976		20,022
Depreciation and amortization, net of (gain) loss on sale of property		23,062		24,706
Purchased transportation		114,005		101,776
Operating expenses and supplies		27,945		29,791
Insurance premiums and claims		24,353		20,170
Operating taxes and licenses		3,173		3,401
Communications and utilities		2,265		2,466
General and other operating expenses		17,479		17,209
Total operating expenses		402,725		410,854
Operating income		12,638		14,854
Other expense (income)
Interest expense, net		5,603		12,658
Equity in loss of affiliated companies		89		296
Other, net		26		(75	)
		5,718		12,879
Income before income tax provision		6,920		1,975
Income tax provision		1,901		593
Net total and comprehensive income		5,019		1,382
Net total and comprehensive income attributable to noncontrolling interest		298		223
Net total and comprehensive income attributable to controlling interest	$	4,721	$	1,159
Earnings per share
Basic earnings per share	$	0.10	$	0.18
Basic weighted average shares outstanding		48,394		6,385
Diluted earnings per share	$	0.10	$	0.18
Diluted weighted average shares outstanding		49,391		6,385
See Notes to Unaudited Condensed Consolidated Financial Statements

Page 4

U.S. Xpress Enterprises, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2019 and 2018
	Three Months Ended
	March 31,
(in thousands)	2019			2018
Operating activities
Net income	$	5,019		$	1,382
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax provision		1,407			190
Depreciation and amortization		21,833			23,901
Losses on sale of equipment		1,229			805
Share based compensation		856			208
Other		308			1,688
Changes in operating assets and liabilities:
Receivables		3,560			(10,706	)
Prepaid insurance and licenses		(4,761	)		(5,242	)
Operating supplies		(285	)		(936	)
Other assets		383			(1,582	)
Accounts payable and other accrued liabilities		(2,844	)		(13,936	)
Accrued wages and benefits		(1,226	)		2,365
Net cash provided by (used in) operating activities		25,479			(1,863	)
Investing activities
Payments for purchases of property and equipment		(36,604	)		(26,871	)
Proceeds from sales of property and equipment		13,115			8,176
Sale of subsidiary, net of cash		(9,002	)		-
Net cash used in investing activities		(32,491	)		(18,695	)
Financing activities
Borrowings under lines of credit		-			102,676
Payments under lines of credit		-			(82,950	)
Borrowings under long-term debt		14,355			23,438
Payments of long-term debt		(31,128	)		(36,062	)
Payments of financing costs and original issue discount		-			(14	)
Payments of long-term consideration for business acquistion		(990	)		(1,010	)
Tax withholding related to net share settlement of restricted stock awards		(39	)		-
Repurchase of membership units		-			(51	)
Book overdraft		5,233			9,469
Net cash provided by (used in) financing activities		(12,569	)		15,496
Change in cash previously included in assets held for sale		11,784			-
Net change in cash and cash equivalents		(7,797	)		(5,062	)
Cash and cash equivalents
Beginning of year		9,892			9,232
End of period	$	2,095		$	4,170
Supplemental disclosure of cash flow information
Cash paid during the year for interest	$	5,620		$	11,249
Cash refunded during the year for income taxes		(91	)		(330	)
Supplemental disclosure of significant noncash investing and financing activities
Debt obligations relieved in conjunction with the divesture of Xpress Internacional	$	7,109		$	-
Capital lease extinguishments		33			764
Uncollected proceeds from asset sales		-			1,706
See Notes to Unaudited Condensed Consolidated Financial Statements

Page 5

U.S. Xpress Enterprises, Inc.

Unaudited Condensed Consolidated Statement of Stockholders' Equity (Deficit)

Three Months Ended March 31, 2019 and 2018

					Additional						Non		Total			Redeemable
(in thousands, except share amounts)	Class A		Class B		Paid			Accumulated			Controlling		Stockholders'			Restricted
	Stock		Stock		In Capital			Deficit			Interest		Equity (Deficit)			Units
Balances at December 31, 2017	$	64	$	-	$	1		$	(43,459	)	$	2,289	$	(41,105	)	$	3,281
Share based compensation		-		-		-			-			-		-			208
Adoption of ASC 606		-		-		-			1,459			-		1,459			-
Dividend of repurchased membership units		-		-		-			-			-		-			(51	)
Net income		-		-		-			1,159			223		1,382			-
Balances at March 31, 2018	$	64	$	-	$	1		$	(40,841	)	$	2,512	$	(38,264	)	$	3,438
					Additional						Non		Total
(in thousands, except share amounts)	Class A		Class B		Paid			Accumulated			Controlling		Stockholders'
	Stock		Stock		In Capital			Deficit			Interest		Equity
Balances at December 31, 2018	$	329	$	155	$	251,742		$	(17,335	)	$	3,496	$	238,387
Share based compensation		-		-		856			-			-		856
Vesting of 201,119 restricted units		-		1		(39	)		-			-		(38	)
Net income		-		-		-			4,721			298		5,019
Balances at March 31, 2019	$	329	$	156	$	252,559		$	(12,614	)	$	3,794	$	244,224
See Notes to Unaudited Condensed Consolidated Financial Statements

Page 6

U.S. Xpress Enterprises, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2019

1. Organization and Operations

U.S. Xpress Enterprises, Inc. and its consolidated subsidiaries (collectively, the “Company”, “we”, “us”, “our”, and similar expressions) provide transportation services throughout the United States and Mexico, with a focus in the densely populated and economically diverse eastern half of the United States. The Company offers its customers a broad portfolio of services using its own asset-based truckload fleet and third-party carriers through our non-asset-based truck brokerage network. The Company has two reportable segments, Truckload and Brokerage. Our Truckload segment offers asset-based truckload services, including over-the-road (“OTR”) trucking and dedicated contract services. Our Brokerage segment is principally engaged in non-asset-based freight brokerage services, where loads are contracted to third-party carriers.

U.S. Xpress Enterprises, Inc. completed its initial public offering in June 2018 (the “IPO” or the “offering”). Prior to the offering U.S. Xpress Enterprises, Inc. was wholly owned by New Mountain Lake Holdings, LLC (“New Mountain Lake”). New Mountain Lake was formed on October 12, 2007 solely for the purpose of taking U.S. Xpress Enterprises, Inc. private and holding 100% ownership of U.S. Xpress Enterprises, Inc. Immediately prior to the effectiveness of the offering, we completed a series of transactions (collectively, the “Reorganization”) pursuant to which New Mountain Lake merged with and into the Company, with the Company continuing as the surviving corporation.

In connection with the Reorganization, we adopted the Second Amended and Restated Certificate of Incorporation of the Company, and converted into and exchanged the issued and outstanding membership units of New Mountain Lake immediately prior to the Reorganization for the Company’s common stock. We provided for the issuance of 4.6666667 shares of Class A common stock for each Class B non-voting membership unit in New Mountain Lake and 4.6666667 shares of Class B common stock for each Class A voting membership unit in New Mountain Lake. The holders of Class A common stock are entitled to one vote per share and the holders of Class B common stock are entitled to five votes per share. In the offering, the Company sold 16,668,000 shares of Class A common stock at a price of $16 per share to the public and received net proceeds of $246.6 million, after deducting underwriting discounts and commissions and offering expenses.

Under our Articles of Incorporation, our authorized capital stock consists of 140,000,000 shares of Class A common stock, par value $0.01 per share, 35,000,000 shares of Class B common stock, par value $0.01 per share, and 9,333,333 shares of preferred stock, the rights and preferences of which may be designated by the Board of Directors.

2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries.  All significant intercompany transactions and accounts have been eliminated.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with Article 10 of Regulation S-X promulgated under the Securities Act of 1933, as amended. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates, and such differences could be material.  In the opinion of management, the accompanying financial statements include all adjustments that are necessary for a fair statement of the results of the interim periods presented, such adjustments being of a normal recurring nature.

Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. The December 31, 2018 balance sheet was derived from our audited balance sheet as of that date. The Company’s operating results are subject to seasonal trends when measured on a quarterly basis; therefore operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2018.

Page 7

Leases

We determine if an arrangement is a lease or contains a lease at inception and perform an analysis to determine whether the lease is an operating lease or a finance lease. We measure right-of-use (“ROU”) assets and lease liabilities at the lease commencement date based on the present value of the remaining lease payments. As most of our leases do not provide a readily determinable implicit rate, we estimate an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. We use this rate to discount the remaining lease payments in measuring the ROU asset and lease liability. We use the implicit rate when readily determinable. We recognize lease expense for operating leases on a straight-line basis over the lease term. For our finance leases, we recognize amortization expense from the amortization of the ROU asset and interest expense on the related lease liability. We do not separate lease and nonlease components of contracts, except for certain leased information technology assets that are embedded within various service agreements. The lease components included in those agreements are included in the ROU asset and lease liability, and the amounts are not significant.

Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.

Recently Issued Accounting Standards

In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which eliminates Step 2 from the goodwill impairment testing process. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Under the new standard, a goodwill impairment loss is measured as the excess of the carrying value of a reporting unit over its fair value. The provisions of this update are effective for fiscal years beginning after December 15, 2019. The Company has evaluated the provisions of the pronouncement and does not expect the adoption of ASU 2018-02 will have a material impact on the consolidated financial statements.

Recently Adopted Accounting Standards

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” and has subsequently issued supplemental and/or clarifying ASUs (collectively “ASC 842”), in order to increase transparency and comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements.  We adopted ASC 842 using the modified retrospective approach and applied the transition provisions with an effective date as of January 1, 2019 for leases that existed on that date. Prior period results continue to be presented under ASC 840 based on the accounting originally in effect for such periods.  We elected the “package of practical expedients” under ASC 842 which permits us to not reassess  our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. We also elected the practical expedient to not reassess certain land easements.  We did not elect the use-of-hindsight practical expedient during the transition of ASC 842.  Adoption of ASC 842 resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities of approximately $183.0 million.  The adoption of ASC 842 also resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing, and uncertainty of cash flows arising from leases.  See the “Leases” section of this note and Note 6, Leases for additional information.

Page 8

3. Divesture of Xpress Internacional

In January 2019, we sold our 95% interest in Xpress Internacional. The purchase price was approximately $4.5 million in cash, a $6.0 million note receivable and approximately $2.5 million in contingent consideration related to the completion of selling 110 tractors. The fair value of the tractors approximated $2.5 million on January 17, 2019 and has not changed as of March 31, 2019. The business met the criteria for the presentation as held for sale as of December 31, 2018. The assets of business held for sale were not material to our consolidated revenues or consolidated operating income. We recognized an impairment in the amount of $10.7 million in December 2018, related to the disposal group as the carrying value exceeded the fair value.  We did not recognize any subsequent gain or loss during the quarter ended March 31, 2019.

4. Income Taxes

The Company’s provision for income taxes for the three months ended March 31, 2019 and 2018 is based on the estimated annual effective tax rate, plus discrete items. The following table presents the provision for income taxes and the effective tax rates for the three months ended March 31, 2019 and 2018 (in thousands):

	Three Months Ended
	March 31,
	2019			2018
Income before Income Taxes	$	6,920		$	1,975
Income tax provision		1,901			593
Effective tax rate		27.5	%		30.0	%

The difference between the Company’s effective tax rate for the three months ended March 31, 2019 and 2018 and the US statutory rate of 21% primarily relates to nondeductible expenses, federal income tax credits, state income taxes (net of federal benefit), Global Intangible Low-Taxed Income earned by certain foreign subsidiaries, the effect of taxes on foreign earnings and certain other immaterial discrete items.

5. Long-Term Debt

Long-term debt at March 31, 2019 and December 31, 2018 consists of the following (in thousands):

	March 31, 2019			December 31, 2018
Term loan agreement, interest rate of 4.7% and 4.8% at March 31, 2019 and December 31, 2018, respectively maturing June 2023	$	192,500		$	195,000
Revenue equipment installment notes with finance companies, weighted average interest rate of 5.0% and 5.0% at March 31, 2019 and December 31, 2018, due in monthly installments with final maturities at various dates through February 2026, secured by related revenue equipment with a net book value of $188.3 million and $197.1 million in March 2019 and December 2018		176,954			184,867
Mortgage note payables, interest rates ranging from 5.25% to 6.99% at March 31, 2019 andDecember 31, 2018 due in monthly installments with final maturities as various dates through September 2031, secured by real estate with a net book value of $23.8 million and $24.1 million at March 2019 and December 2018		18,574			18,861
Other		4,081			6,872
		392,109			405,600
Less:  Debt issuance costs		(1,264	)		(1,347	)
Less:  Current maturities of long-term debt		(86,492	)		(106,383	)
	$	304,353		$	297,870

Page 9

New Credit Facility

In June 2018, we entered into a new credit facility (the “Credit Facility”) that contains a $150.0 million revolving component (the “Revolving Facility”) and a $200.0 million term loan component (the “Term Facility”). The Credit Facility contains an accordion feature that, so long as no event of default exists, allows us to request an increase in the borrowing amounts under the Revolving Facility or the Term Facility by a combined maximum amount of $75.0 million. Borrowings under the Credit Facility are classified as either “base rate loans” or “Eurodollar rate loans.” Base rate loans accrue interest at a base rate equal to the agent’s prime rate plus an applicable margin that was set at 1.25% through September 30, 2018 and adjusted quarterly thereafter between 0.75% and 1.50% based on our consolidated net leverage ratio. Eurodollar rate loans will accrue interest at London Interbank Offered Rate, or a comparable or successor rate approved by the administrative agent, plus an applicable margin that was set at 2.25% through September 30, 2018 and adjusted quarterly thereafter between 1.75% and 2.50% based on our consolidated net leverage ratio. The Credit Facility requires payment of a commitment fee on the unused portion of the Revolving Facility commitment of between 0.25% and 0.35% based on our consolidated net leverage ratio. In addition, the Revolving Facility includes, within its $150.0 million revolving credit facility, a letter of credit sub facility in an aggregate amount of $75.0 million and a swingline sub facility in an aggregate amount of $15.0 million. The Term Facility has scheduled quarterly principal payments between 1.25% and 2.50% of the original face amount of the Term Facility plus any additional amount borrowed pursuant to the accordion feature of the Term Facility, with the first such payment occurring on the last day of our fiscal quarter ending September 30, 2018.  The Credit Facility will mature on June 18, 2023.

Borrowings under the Credit Facility are prepayable at any time without premium and are subject to mandatory prepayment from the net proceeds of certain asset sales and other borrowings. The Credit Facility is secured by a pledge of substantially all of our assets, excluding, among other things, certain real estate and revenue equipment financed outside the Credit Facility.

The Credit Facility contains restrictive covenants including, among other things, restrictions on our ability to incur additional indebtedness or issue guarantees, to create liens on our assets, to make distributions on or redeem equity interests, to make investments, to transfer or sell properties or other assets and to engage in mergers, consolidations, or acquisitions. In addition, the Credit Facility requires us to meet specified financial ratios and tests, including a maximum leverage ratio and a minimum interest coverage ratio.

At March 31, 2019, the Revolving Facility had issued collateralized letters of credit in the face amount of $31.7 million, with $0 borrowings outstanding and $118.3 million available to borrow and the Term Facility had $192.5 million outstanding.

The Credit Facility includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts payable under the Credit Facility may be accelerated, and the Lenders’ commitments may be terminated. At March 31, 2019, the Company was in compliance with all financial covenants prescribed by the Credit Facility.

6. Leases

We have operating and finance leases with terms of 1 year to 10 years for certain revenue and service equipment and office and terminal facilities.

The table below presents the lease-related assets and liabilities recorded on the balance sheet (in thousands):

Leases	Classification	March 31, 2019
Assets
Operating	Operating lease right-of-use assets	$	186,941
Finance	Property and equipment, net		19,921
Total leased assets		$	206,862
Liabilities
Current
Operating	Current portion of operating lease liabilities	$	56,893
Finance	Current maturities of long-term debt and finance leases		8,625
Noncurrent
Operating	Noncurrent operating lease liabilities		129,927
Finance	Long-term debt and finance leases, net of current maturities		8,432
Total lease liabilities		$	203,877

Page 10

The table below presents certain information related to the lease costs for finance and operating leases (in thousands):

Lease Cost	Classification	March 31, 2019
Operating lease cost	Vehicle rents and General and other operating	$	20,167
Finance lease cost:
Amortization of finance lease assets	Depreciation and amortization		808
Interest on lease liabilities	Interest expense		318
Short-term lease cost	General and other operating		311
Total lease cost		$	21,604

Cash Flow Information	Three Months Ended March 31, 2019
Cash paid for operating leases included in operating activities	$	20,167
Cash paid for finance leases included in operating activities	$	318
Cash paid for finance leases included in financing activities	$	3,155
Operating lease right-of-use assets obtained in exchange for lease obligations	$	23,975
Operating lease right-of-use assets and liabilities relieved in conjunction with divesture of Xpress Internacional	$	2,018

Lease Term and Discount Rate	Weighted-Average Remaining Lease Term (years)		Weighted-Average Discount Rate
Operating leases		4.1		5.2	%
Finance leases		3.4		5.3	%

Page 11

As of March 31, 2019, future maturities of lease liabilities were as follows (in thousands):

	March 31, 2019
	Finance			Operating
2019	$	4,236		$	49,948
2020		7,544			52,785
2021		4,084			41,805
2022		1,427			27,115
2023		1,427			18,794
Thereafter		297			17,842
		19,015			208,289
Less:  Amount representing interest		(1,958	)		(21,469	)
Total	$	17,057		$	186,820

As of December 31, 2018, minimum lease payments under capital and operating leases were as follows (in thousands):

	December 31, 2018
	Capital			Operating
2019	$	7,797		$	60,303
2020		7,564			42,632
2021		4,086			35,302
2022		1,427			20,751
2023		1,427			15,884
Thereafter		297			14,080
		22,598		$	188,952
Less:  Amount representing interest		(2,285	)
		20,313
Less:  Current portion		(6,711	)
	$	13,602

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7.  Commitments and Contingencies

The Company is party to certain legal proceedings incidental to its business. The ultimate disposition of these matters, in the opinion of management, based in part on the advice of legal counsel, is not expected to have a materially adverse effect on the Company’s financial position or results of operations.

For the cases described below, management is unable to provide a meaningful estimate of the possible loss or range of loss because, among other reasons, (1) the proceedings are in various stages; (2) damages have not been sought; (3) damages are unsupported and/or exaggerated; (4) there is uncertainty as to the outcome of the proceedings, including pending appeals; and/or (5) there are significant factual issues to be resolved.  For these cases, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on our financial condition, though the outcomes could be material to our operating results for any particular period, depending, in part, upon the operating results for such period.

California Wage and Hour Class Action Litigation

On December 23, 2015, a class action lawsuit was filed against usand our subsidiary U.S. Xpress, Inc. in the Superior Court of California, County of San Bernardino.  The case was transferred to the U.S. District Court for the Central District of California.  The putative class includes current and former truck drivers employed by us who worked or work in California after the completion of their training while residing in California since December 23, 2011 to present.  The case alleges that class members were not paid for off-the-clock work, were not provided duty free meal or break times, and were not paid premium pay in their absence, were not paid minimum wage for all hours worked, were not provided accurate and complete time and pay records and were not paid all accrued wages at the end of their employment, all in violation of California law.  The class seeks a judgment for compensatory damages and penalties, injunctive relief, attorney fees and costs and pre- and post-judgment interest. The matter is currently in discovery, and a jury trial has been requested. There is currently no trial date set.  We are currently not able to predict the probable outcome or to reasonably estimate a range of potential losses, if any.   We intend to vigorously defend the merits of these claims.

Telephone Consumer Protection Act Claim

A class action was filed against our subsidiary U.S. Xpress, Inc. in the U.S. District Court for the Western District of Virginia on December 11, 2017 and amended on March 7, 2018, alleging violations of the Telephone Consumer Protection Act, for two separate proposed classes. The putative classes include all persons within the United States to whom the Company either initiated a telephone call to a cellular telephone number using an automatic telephone dialing system or initiated a call to a residential telephone number using an artificial or pre-recorded voice at any time from December 11, 2013 to present.  The lawsuit seeks statutory damages for each violation, injunctive relief and attorneys’ fees and costs.  The Company successfully moved to dismiss the claims related to calls made to residential lines on grounds that the plaintiff lacked standing to assert such claims. The Court denied the Company’s Motion to Dismiss claims for all purported class members residing outside the State of Virginia for lack of personal jurisdiction. The matter is currently in discovery and is set for trial beginning January 13, 2020.  We are currently not able to predict the probable outcome or to reasonably estimate a range of potential losses, if any. We intend to vigorously defend the merits of these claims.

Stockholder Claims

As set forth below, between November 2018 and April 2019, eight substantially similar putative securities class action complaints were filed against us and certain other defendants: five in the Circuit Court of Hamilton County, Tennessee (“Tennessee State Court Cases”), two in the U.S. District Court for the Eastern District of Tennessee (“Federal Court Cases”), and one in the Supreme Court of the State of New York (“New York State Court Case”).  Two of the Tennessee State Court Cases have been voluntarily dismissed.  All of these matters are in preliminary stages of litigation. We are currently not able to predict the probable outcome or to reasonably estimate a range of potential losses, if any.

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On November 21, 2018, a putative class action complaint was filed in the Circuit Court of Hamilton County, Tennessee against us, five of our officers or directors, and the seven underwriters who participated in our June 2018 initial public offering (“IPO”), alleging violations of Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”).  The class action lawsuit is based on allegations that the Company made false and/or misleading statements in the registration statement and prospectus filed with the Securities and Exchange Commission ("SEC") in connection with the IPO.  The lawsuit is purportedly brought on behalf of a putative class of all persons or entities who purchased or otherwise acquired the Company’s Class A common stock pursuant and/or traceable to the IPO, and seeks, among other things, compensatory damages, costs and expenses (including attorneys’ fees) on behalf of the putative class.

On January 23, 2019, a substantially similar putative class action complaint was filed in the Circuit Court of Hamilton County, Tennessee, by a different plaintiff alleging claims under Sections 11 and 15 of the Securities Act against the same defendants as in the action commenced on November 21, 2018.  On March 7, 2019, this case was voluntarily dismissed by the plaintiff.

On January 30, 2019, a substantially similar putative class action complaint was filed in the Circuit Court of Hamilton County, Tennessee, by a different plaintiff alleging claims under Sections 11 and 15 of the Securities Act against the same defendants as in the action commenced on November 21, 2018, and also alleging a claim under Section 12 of the Securities Act.

On February 5, 2019, a substantially similar putative class action complaint was filed in the Circuit Court of Hamilton County, Tennessee, by a different plaintiff alleging claims under Sections 11 and 15 of the Securities Act against the same defendants as in the action commenced on November 21, 2018, and also alleging a claim under Section 12 of the Securities Act.

On February 6, 2019, a substantially similar putative class action complaint was filed in the Circuit Court of Hamilton County, Tennessee, by different plaintiffs alleging claims under Sections 11 and 15 of the Securities Act against the same defendants as in the action commenced on November 21, 2018.   On March 19, 2019, this case was voluntarily dismissed by the plaintiff.

On March 8, 2019, a substantially similar putative class action complaint was filed in the U.S. District Court for the Eastern District of Tennessee by a different plaintiff alleging claims under Sections 11 and 15 of the Securities Act against the same defendants as in the action commenced on November 21, 2018.

On March 14, 2019, a substantially similar putative class action complaint was filed in the Supreme Court of the State of New York, County of New York, by a different plaintiff alleging claims under Sections 11 and 15 of the Securities Act against the same defendants as in the action commenced on November 21, 2018.

On April 2, 2019, a substantially similar putative class action complaint was filed in the U.S. District Court for the Eastern District of Tennessee, by a different plaintiff alleging claims under Sections 11 and 15 of the Securities Act against us and the same five of our officers and directors as in the action commenced on November 21, 2018.   Unlike the previously filed complaints, this complaint did not name as defendants any of the seven underwriters who participated in our IPO.

The complaints in all the actions listed above allege that the Company made false and/or misleading statements in the registration statement and prospectus filed with the SEC in connection with the IPO, and that, as a result of such alleged statements, the plaintiffs and the members of the putative classes suffered damages.  We believe the allegations made in the complaints are without merit and intend to defend ourselves vigorously in these matters.

Independent Contractor Class Action

On March 26, 2019, a putative class action complaint was filed in the U.S. District Court for the Eastern District of Tennessee against us and our subsidiaries U.S. Xpress, Inc. and U.S. Xpress Leasing, Inc.  The putative class includes individuals who performed work as lease operators, who leased equipment from us, and who were designated as independent contractors.  The complaint alleges that independent contractors are improperly designated as such and should be designated as employees and thus subject to the Fair Labor Standards Act (“FLSA”).  The complaint further alleges that U.S. Xpress, Inc.’s pay practices with regard to the putative class members violated the minimum wage provisions of the FLSA for the period from March 26, 2016 to present.  The complaint further alleges that we violated the requirements of the Truth in Leasing Act with regard to the independent contractor agreements and lease purchase agreements we entered into with the putative class members.  The complaint further alleges that we failed to comply with the terms of the independent contractor agreements and lease purchase agreements entered into with the putative class members, that we violated the provisions of the Tennessee Consumer Protection Act in advertising, describing and marketing the lease purchase program to the putative class members, and that we were unjustly enriched as a result of the foregoing allegations.  The matter is not yet in discovery, and we are currently not able to predict the probable outcome or to reasonably estimate a range of potential losses, if any.  We believe the allegations made in the complaint are without merit and intend to defend ourselves vigorously against the complaints relating to such actions.

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The Company had letters of credit of $31.7 million outstanding as of March 31, 2019. The letters of credit are maintained primarily to support the Company’s insurance program.

The Company had cancelable commitments outstanding at March 31, 2019 to acquire revenue equipment and real estate for approximately $201.4 million and during the remainder of 2019. These purchase commitments are expected to be financed by long-term debt, operating leases, proceeds from sales of existing equipment, and cash flows from operations.

8. Share-based Compensation

2018 Omnibus Incentive Plan

In June 2018, the Board approved the 2018 Omnibus Incentive Plan (the “Incentive Plan”) to become effective in connection with the offering. The Company has reserved an aggregate of 3.2 million shares of its Class A common stock for issuance of awards under the Incentive Plan. Participants in the Incentive Plan will be selected by the Compensation Committee from the executive officers, directors, employees and consultants of the Company. Awards under the Incentive Plan may be made in the form of stock options, stock appreciation rights, stock awards, restricted stock units, performance awards, performance units, and any other form established by the Compensation Committee pursuant to the Incentive Plan.

The following is a summary of the Incentive Plan restricted stock and restricted stock unit activity for the three months ended March 31, 2019:

			Weighted
	Number of		Average Grant
	Units		Date Fair Value
Unvested at December 31, 2018		270,742	$	14.20
Granted		461,775		8.94
Vested		31,845		15.77
Forfeited		5,500		16.00
Unvested at March 31, 2019		695,172	$	10.62

The restricted stock grants vest over periods of one to five years. The Company recognized compensation expense of $0.6 million during the three months ended March 31, 2019. At March 31, 2019 and December 31, 2018, the Company had $6.3 million and $2.8 million in unrecognized compensation expense related to the above restricted stock awards which is expected to be recognized over a period of approximately   3.4 years and 3.3 years, respectively.

The following is a summary of the Incentive Plan stock option activity from December 31, 2018 to March 31, 2019:

			Weighted
	Number of		Average Grant
	Units		Date Fair Value
Unvested at December 31, 2018		177,260	$	6.09
Granted		244,785		4.41
Unvested at March 31, 2019		422,045	$	5.12

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The stock options vest over a period of four years and expire ten years from the date of grant. The Company recognized compensation expense of $0.1 million for the three months ended March 31, 2019. The fair value of the stock option grant was estimated using the Black-Scholes method as of the grant date using the following assumptions:

Strike price	$	9.40
Risk-free interest rate		2.50	%
Expected dividend yield		0	%
Expected volatility		45.65	%
Expected term (in years)		6.25

At March 31, 2019 and December 31, 2018, the Company had $1.7 million and $0.8 million in unrecognized compensation expense related to the stock option awards which is expected to be recognized over a period of approximately  3.0 years and 3.5 years.

Restricted Stock Units

Prior to the IPO, the Company  provided for restricted membership unit awards in New Mountain Lake under the 2008 Restricted Stock Plan in order to compensate the Company’s employees and to promote the success of the Company’s business.

As part of the Reorganization (see Note 1), all of the redeemable restricted units of New Mountain Lake were converted into restricted stock units of the Company, with the same vesting schedules. The following is a summary of the Company’s restricted stock unit activity for the three months ended March 31, 2019:

	Number of		Weighted
	Units		Average
Unvested at December 31, 2018		1,401,674	$	2.00
Vested		173,320		2.15
Unvested at March 31, 2019		1,228,354	$	1.98

The vesting schedule for these restricted unit grants range from 3 to 7 years.  The Company recognized compensation expense of $0.2 million and $0.2 million during the three months ended March 31, 2019 and 2018, respectively. At March 31, 2019 and December 31, 2018, the Company had approximately $2.0 million and $2.2 million in unrecognized compensation expense related to restricted units, which is expected to be recognized over a period of approximately 3.7 and 4.1 years, respectively. The fair value of the restricted units and corresponding compensation expense was determined using the income approach.

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9. Fair Value Measurements

Accounting standards, among other things, define fair value, establish a framework for measuring fair value and expand disclosure about such fair value measurements. Assets and liabilities measured at fair value are based on one or more of three valuation techniques provided for in the standard.

The standards clarify that fair value is an exit price, representing the amount that would be received to sell an asset, based on the highest and best use of the asset, or paid to transfer a liability in an orderly transaction between market participants.  As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.  As a basis for evaluating such assumptions, the standards establish a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value as follows:

Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.  An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).

Level 3 Unobservable inputs, only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.

The following table summarizes liabilities measured at fair value at March 31, 2019 and December 31, 2018 (in thousands):

	2019
	Fair Value		Input Level
Liabilities
Forward Contract	$	-		3
		2018
	Fair Value		Input Level
Liabilities
Forward Contract	$	1,793		3

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The following table summarizes the changes in the fair value of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2019 and 2018 (in thousands):

	Three Months Ended
	March 31,
	2019		2018
Balance at beginning of year	$	1,793	$	1,985
Divesture of Xpress Internacional		1,793		-
Forward Contract Adjustment		-		(48	)
Balance at end of period	$	-	$	1,937

At December 31, 2018, the physically settled forward contract was reclassified to long term liabilities associated with assets held for sale and in January 2019 relieved in conjunction with the disposal of Xpress Internacional.

10. Earnings per Share

Basic earnings per share is calculated by dividing net income attributable to common stockholders by the weighted average shares of common stock outstanding during the period, without consideration for common stock equivalents. Prior to the offering, there were no common stock equivalents which could have had a dilutive effect on earnings per share. The Company excluded 989,717 equity awards for the three months ended March 31, 2019 as inclusion would be anti-dilutive.

The basic and diluted earnings per share calculations for the three months ended March 31, 2019 and 2018, respectively, are presented below (in thousands, except per share amounts):

	Three Months Ended
	March 31,
	2019		2018
Net income	$	5,019	$	1,382
Net income attributable to noncontrolling interest		298		223
Net income attributable to common stockholders	$	4,721	$	1,159
Basic weighted average of outstanding shares of common stock		48,394		6,385
Dilutive effect of equity awards		997		-
Diluted weighted average of outstanding shares of common stock		49,391		6,385
Basic earnings per share	$	0.10	$	0.18
Diluted earnings per share	$	0.10	$	0.18

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11. Segment Information

The Company’s business is organized into two reportable segments, Truckload and Brokerage. The Truckload segment offers asset-based truckload services, including OTR trucking and dedicated contract services. These services are aggregated because they have similar economic characteristics and meet the aggregation criteria described in the accounting guidance for segment reporting. The Company’s OTR service offering provides solo and expedited team services through one-way movements of freight over routes throughout the United States and, prior to the divesture of Xpress Internacional, cross-border into and out of Mexico. The Company’s dedicated contract service offering devotes the use of equipment to specific customers and provides services through long-term contracts. The Company’s dedicated contract service offering provides similar freight transportation services, but does so pursuant to agreements where it makes equipment, drivers and on-site personnel available to a specific customer to address needs for committed capacity and service levels.  During the three months ended March 31, 2019, the Truckload segment accounted for approximately 89% of consolidated revenue.

The Company’s Brokerage segment is principally engaged in non-asset-based freight brokerage services, where it outsources the transportation of loads to third-party carriers. For this segment, the Company relies on brokerage employees to procure third-party carriers, as well as information systems to match loads and carriers. During the three months ended March 31, 2019, the Brokerage segment accounted for approximately 11% of consolidated revenue.

The following table summarizes our segment information (in thousands):

	Three Months Ended
	March 31,
	2019		2018
Revenues
Truckload	$	369,119	$	371,167
Brokerage		46,244		54,541
Total Operating Revenue	$	415,363	$	425,708
Operating Income
Truckload	$	9,842	$	12,503
Brokerage		2,796		2,351
Total Operating Income	$	12,638	$	14,854

A measure of assets is not applicable, as segment assets are not regularly reviewed by the Chief Operating Decision Maker for evaluating performance or allocating resources.

Page 19

Information about the geographic areas in which the Company conducted business during the three months ended March 31, 2019 and 2018 is summarized below (in thousands). Operating revenues for foreign countries include revenues for (i) shipments with an origin or destination in that country and (ii) other services provided in that country. If both the origin and destination are in a foreign country, the revenues are attributed to the country of origin. In January 2019, we disposed of our Mexican business.

	Three Months Ended
	March 31,
	2019		2018
Revenues
United States	$	412,991	$	412,852
Foreign countries
Mexico		2,372		12,856
Total	$	415,363	$	425,708

Page 20

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The unaudited condensed consolidated financial statements include the accounts of U.S. Xpress Enterprises, Inc., a Nevada corporation, and its consolidated subsidiaries. References in this report to “we,” “us,” “our,” the “Company,” and similar expressions refer to U.S. Xpress Enterprises, Inc. and its consolidated subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation.

This report 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 (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended.  All statements, other than statements of historical or current fact, are statements that could be deemed forward-looking statements, including without limitation: any projections of earnings, revenues or other financial items; any statement of plans, strategies, outlook, growth prospects or objectives of management for future operations; our operational and financial targets; general economic trends, performance or conditions and trends in the industry and markets; the competitive environment in which we operate; any statements concerning proposed new services, technologies or developments; and any statement of belief and any statements of assumptions underlying any of the foregoing. In this Form 10-Q, statements relating to the impact of new accounting standards, future tax rates, expenses, and deductions, expected freight demand, capacity, and volumes, potential results of a default under our Credit Facility or other debt agreements, expected sources of working capital and liquidity (including our mix of debt and lease arrangements as means of financing revenue equipment), future interest expense, expected capital expenditures, expected fleet age and mix of owned versus leased equipment, expected impact of technology, including the impact of event recorders, future customer relationships, future use of dedicated contracts, future growth in independent contractors and related purchased transportation expense and fuel surcharge reimbursement, future growth of our lease-purchase program, future driver market conditions and driver turnover and retention rates, any projections of earnings, revenues, cash flows, dividends, capital expenditures, or other financial items, expected cash flows, expected operating improvements, including improvements in our Adjusted Operating Ratio, Adjusted Operating Income and working capital, any statements regarding future economic conditions or performance, any statement of plans, strategies, and objectives of management for future operations, including the anticipated impact of such plans, strategies, and objectives, future rates and prices, future utilization, future depreciation and amortization, future salaries, wages, and related expenses, including driver compensation, future insurance and claims expense, including the impact of the installation of event recorders, future fluctuations in fuel costs and fuel surcharge revenue, including the future effectiveness of our fuel surcharge program, strategies for managing fuel costs, future fluctuations in operating expenses and supplies, future fleet size and management, the market value of used equipment, including gain on sale, future residual value guarantees, any statements concerning proposed acquisition plans, new services or developments, the anticipated impact of legal proceedings on our financial position and results of operations, among others, are forward-looking statements. Forward-looking statements may be identified by their use of terms or phrases such as “believe,” “may,” “could,” “expects,” “estimates,” “projects,” “anticipates,” “plans,” “intends,” and similar terms and phrases.  Such statements are based on currently available operating, financial and competitive information. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “Item 1A. Risk Factors,” set forth in our Annual Report on Form 10-K for the year ended December 31, 2018. Readers should review and consider the factors discussed in “Item 1A. Risk Factors,” set forth in our Annual Report on Form 10-K for the year ended December 31, 2018, along with various disclosures in our press releases, stockholder reports, and other filings with the SEC.

All such forward-looking statements speak only as of the date of this Form 10-Q.  You are cautioned not to place undue reliance on such forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in the events, conditions, or circumstances on which any such statement is based.

Overview

We are the fifth largest asset‑based truckload carrier in the United States by revenue, generating over $1.8 billion in total operating revenue in 2018. We provide services primarily throughout the United States, with a focus in the densely populated and economically diverse eastern half of the United States. We offer customers a broad portfolio of services using our own truckload fleet and third‑party carriers through our non‑asset‑based truck brokerage network. As of March 31, 2019, our fleet consisted of approximately 6,600 tractors and approximately 15,000 trailers, including approximately 1,900 tractors provided by independent contractors. All of our tractors have been equipped with electronic logs since 2012, and our systems and network are engineered for compliance with the recent federal electronic log mandate. Our terminal network and information technology infrastructure are established and capable of handling significantly larger volumes without meaningful additional investment.

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For much of our history, we focused primarily on scaling our fleet and expanding our service offerings to support sustainable, multi-faceted relationships with customers. More recently, we have focused on our core service offerings and refined our network to focus on shorter, more profitable lanes with more density, which we believe are more attractive to drivers. Over the last four years, we have recruited and developed new executive and operational management teams with significant industry experience and instilled a new culture of professional management. These changes, which are ongoing, were reflected in our 2018 and first quarter of 2019 financial results where we continue to see earnings improvement as a result of these changes and initiatives. We experienced our seventh consecutive quarter of year over year Adjusted Operating Income improvement in the first quarter of 2019 and the highest adjusted earnings of any first quarter in the history of the Company. For the balance of 2019 we are focused on three main priorities.  The first is optimizing our Truckload network and resulting average revenue per tractor per week through repositioning equipment and allocating capacity between our Dedicated and Over-the-Road segments. The second is improving the experience of our professional truck drivers, including their safety and security. And, the third is advancing our technology initiatives centered on digital load matching, automated load acceptance and prioritization, and our goal of achieving a 100% frictionless order.

Total revenue for the first quarter of 2019 decreased by $10.3 million to $415.4 million as compared to the first quarter of 2018. The decrease was primarily a result of a 15.2% decrease in brokerage revenue to $46.2 million, and a $2.8 million decrease in fuel surcharge revenue. Excluding the impact of fuel surcharge revenue, first quarter revenue decreased $7.5 million to $375.3 million, a decrease of 2.0% as compared to the prior year quarter. Excluding our Mexico operations, our total operating revenue remained essentially constant compared to the same quarter in 2018 and our revenue excluding fuel surcharge increased $2.9 million or 0.8% compared to the same quarter in 2018.

Operating income for the first quarter of 2019 was $12.6 million compared to the $14.9 million achieved in the first quarter of 2018. Excluding costs related to the transition of our Mexico operations, first quarter Adjusted Operating Income was $16.0 million. For the definition of Adjusted Operating Income and a reconciliation to the most directly comparable GAAP measure, see “Use of Non-GAAP Financial Information.”

We continue to see a limited supply of professional drivers which we believe will limit significant growth during 2019. As a result, we are continuing to focus on our driver centric initiatives, such as increased miles and modern equipment, to both retain the professional drivers who have chosen to partner with us and attract new professional drivers to our team. We will continue to focus on implementing and executing our initiatives that we expect will continue to drive sustainable improved performance over time.

During the balance of 2019, we remain positive as we expect the freight environment to improve seasonally, our network efficiency to rise as we complete the repositioning of equipment from cross-border lanes and the productivity of our operations to benefit from our many internal initiatives including our goal of achieving a frictionless order.

Reportable Segments

Our business is organized into two reportable segments, Truckload and Brokerage. Our Truckload segment offers truckload services, including over-the-road (“OTR”) trucking and dedicated contract services. Our OTR service offering transports a full trailer of freight for a single customer from origin to destination, typically without intermediate stops or handling pursuant to short‑term contracts and spot moves that include irregular route moves without volume and capacity commitments. Tractors are operated with a solo driver or, when handling more time‑sensitive, higher‑margin freight, a team of two drivers. Our dedicated contract service offering provides similar freight transportation services, but with contractually assigned equipment, drivers and on‑site personnel to address customers’ needs for committed capacity and service levels pursuant to multi‑year contracts with guaranteed volumes and pricing. Our Brokerage segment is principally engaged in non‑asset‑based freight brokerage services, where loads are contracted third‑party carriers.

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Truckload Segment

In our Truckload segment, we generate revenue by transporting freight for our customers in our OTR and dedicated contract service offerings. Our OTR service offering provides solo and expedited team services through one way movements of freight over routes throughout the United States and prior to the divesture of our Mexico business, cross border into and out of Mexico. Our dedicated contract service offering devotes the use of equipment to specific customers and provides services through long term contracts. Our Truckload segment provides services that are geographically diversified but have similar economic and other relevant characteristics, as they all provide truckload carrier services of general commodities and durable goods to similar classes of customers.

We are typically paid a predetermined rate per load or per mile for our Truckload services. We enhance our revenue by charging for tractor and trailer detention, loading and unloading activities and other specialized services. Consistent with industry practice, our typical customer contracts (other than those contracts in which we have agreed to dedicate certain tractor and trailer capacity for use by specific customers) do not guarantee load levels or tractor availability. This gives us and our customers a certain degree of flexibility to negotiate rates up or down in response to changes in freight demand and trucking capacity. In our dedicated contract service offering, which comprised approximately 37.5% of our Truckload operating revenue, and approximately 38.0% of our Truckload revenue, before fuel surcharge, for 2018, we provide service under contracts with fixed terms, volumes and rates. Dedicated contracts are often used by our customers with high service and high priority freight, sometimes to replace private fleets previously operated by them.

Generally, in our Truckload segment, we receive fuel surcharges on the miles for which we are compensated by customers. Fuel surcharge revenue mitigates the effect of price increases over a negotiated base rate per gallon of fuel; however, these revenues may not fully protect us from all fuel price increases. Our fuel surcharges to customers may not fully recover all fuel increases due to engine idle time, out of route miles and non revenue generating miles that are not generally billable to the customer, as well as to the extent the surcharge paid by the customer is insufficient. The main factors that affect fuel surcharge revenue are the price of diesel fuel and the number of revenue miles we generate. Although our surcharge programs vary by customer, we generally attempt to negotiate an additional penny per mile charge for every five cent increase in the U.S. Department of Energy’s (the “DOE”) national average diesel fuel index over an agreed baseline price. Our fuel surcharges are billed on a lagging basis, meaning we typically bill customers in the current week based on a previous week’s applicable index. Therefore, in times of increasing fuel prices, we do not recover as much as we are currently paying for fuel. In periods of declining prices, the opposite is true. Based on the current status of our empty miles percentage and the fuel efficiency of our tractors, we believe that our fuel surcharge recovery is effective.

The main factors that affect our operating revenue in our Truckload segment are the average revenue per mile we receive from our customers, the percentage of miles for which we are compensated and the number of shipments and miles we generate. Our primary measures of revenue generation for our Truckload segment are average revenue per loaded mile and average revenue per tractor per period, in each case excluding fuel surcharge revenue and revenue and miles from services in Mexico.

In our Truckload segment, our most significant operating expenses vary with miles traveled and include (i) fuel, (ii) driver related expenses, such as wages, benefits, training and recruitment and (iii) costs associated with independent contractors (which are primarily included in the “Purchased transportation” line item). Expenses that have both fixed and variable components include maintenance and tire expense and our total cost of insurance and claims. These expenses generally vary with the miles we travel, but also have a controllable component based on safety, fleet age, efficiency and other factors. Our main fixed costs include vehicle rent and depreciation of long term assets, such as revenue equipment and service center facilities, the compensation of non driver personnel and other general and administrative expenses.

Our Truckload segment requires substantial capital expenditures for purchase of new revenue equipment. We use a combination of operating leases and secured financing to acquire tractors and trailers, which we refer to as revenue equipment. When we finance revenue equipment acquisitions with operating leases, we  record an operating lease right of use asset and an operating lease liability on our consolidated balance sheet, and the lease payments in respect of such equipment are reflected in our consolidated statement of comprehensive income in the line item “Vehicle rents.” When we finance revenue equipment acquisitions with secured financing, the asset and liability are recorded on our consolidated balance sheet, and we record expense under “Depreciation and amortization” and “Interest expense.” Typically, the aggregate monthly payments are similar under operating lease financing and secured financing. We use a mix of finance leases and operating leases with individual decisions being based on competitive bids, tax projections and contractual restrictions. Because of the inverse relationship between vehicle rents and depreciation and amortization, we review both line items together.

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Approximately 26.4% of our total tractor fleet was operated by independent contractors at March 31, 2019. Independent contractors provide a tractor and a driver and are responsible for all of the costs of operating their equipment and drivers, including interest and depreciation, vehicle rents, driver compensation, fuel and other expenses, in exchange for a fixed payment per mile or percentage of revenue per invoice plus a fuel surcharge pass through. Payments to independent contractors are recorded in the “Purchased transportation” line item. When independent contractors increase as a percentage of our total tractor fleet, our “Purchased transportation” line item typically will increase, with offsetting reductions in employee driver wages and related expenses, net of fuel (assuming all other factors remain equal). The reverse is true when the percentage of our total fleet operated by company drivers increases.

Brokerage Segment

In our Brokerage segment, we retain the customer relationship, including billing and collection, and we outsource the transportation of the loads to third‑party carriers. For this segment, we rely on brokerage employees to procure third‑party carriers, as well as information systems to match loads and carriers.

Our Brokerage segment revenue is mainly affected by the rates we obtain from customers, the freight volumes we ship through our third‑party carriers and our ability to secure third‑party carriers to transport customer freight. We generally do not have contracted long‑term rates for the cost of third‑party carriers, and we cannot assure that our results of operations will not be adversely impacted in the future if our ability to obtain third‑party carriers changes or the rates of such providers increase.

The most significant expense of our Brokerage segment, which is primarily variable, is the cost of purchased transportation that we pay to third‑party carriers, and is included in the “Purchased transportation” line item. This expense generally varies depending upon truckload capacity, availability of third‑party carriers, rates charged to customers and current freight demand and customer shipping needs. Other operating expenses are generally fixed and primarily include the compensation and benefits of non‑driver personnel (which are recorded in the “Salaries, wages and benefits” line item) and depreciation and amortization expense.

The key performance indicator in our Brokerage segment is gross margin percentage (which is calculated as brokerage revenue less purchased transportation expense expressed as a percentage of total operating revenue). Gross margin percentage can be impacted by the rates charged to customers and the costs of securing third‑party carriers.

Our Brokerage segment does not require significant capital expenditures and is not asset intensive like our Truckload segment.

Use of Non‑GAAP Financial Information

In addition to our net income and operating ratio determined in accordance with GAAP, we evaluate operating performance using certain non-GAAP measures, including Adjusted Operating Income We define Adjusted Operating Income as revenue less operating expenses, net of Mexico transition costs. We believe our presentation of Adjusted Operating Income is useful because it provides investors and securities analysts the same information that we use internally to assess our core operating performance.

The non-GAAP information provided is used by our management and may not be comparable to similar measures disclosed by other companies, because of differing methods used by other companies in calculating Adjusted Operating Income. The non-GAAP measures used herein have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Management compensates for these limitations by relying primarily on GAAP results and using non-GAAP financial measures on a supplemental basis.

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The table below compares our GAAP operating income to our non‑GAAP Adjusted Operating Income.

	Three Months Ended
	March 31,
	2019			2018
Consolidated GAAP Presentation	(dollars in thousands)
Total operating revenue	$	415,363		$	425,708
Total operating expenses		402,725			410,854
Operating Income	$	12,638		$	14,854
Consolidated Non-GAAP Presentation
Total operating revenue	$	415,363		$	425,708
Fuel Surcharge		(40,051	)		(42,850	)
Revenue, before fuel surcharge		375,312			382,858
Total operating expenses		402,725			410,854
Adjusted for:
Fuel Surcharge		(40,051	)		(42,850	)
Mexico transition costs		(3,400	)		–
Adjusted total operating expenses		359,274			368,004
Adjusted Operating Income	$	16,038		$	14,854

Results of Operations

Revenue

We generate revenue from two primary sources: transporting freight for our customers (including related fuel surcharge revenue) and arranging for the transportation of customer freight by third‑party carriers. We have two reportable segments: our Truckload segment and our Brokerage segment. Truckload revenue, before fuel surcharge and truckload fuel surcharge are primarily generated through trucking services provided by our two Truckload service offerings (OTR and dedicated contract). Brokerage revenue is primarily generated through brokering freight to third‑party carriers.

Our total operating revenue is affected by certain factors that relate to, among other things, the general level of economic activity in the United States, customer inventory levels, specific customer demand, the level of capacity in the truckload and brokerage industry, the success of our marketing and sales efforts and the availability of drivers, independent contractors and third‑party carriers.

A summary of our revenue generated by type for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended
	March 31,
	2019		2018
	(dollars in thousands)
Revenue before fuel surcharge	$	375,312	$	382,858
Fuel surcharge		40,051		42,850
Total operating revenue	$	415,363	$	425,708

          

For the quarter ended March 31, 2019, our total operating revenue decreased by $10.3 million, or 2.4%, compared to the same quarter in 2018, and our revenue, before fuel surcharge decreased by $7.5 million, or 2.0%. Excluding our Mexico operations, our total operating revenue remained essentially constant compared to the same quarter in 2018 and our revenue excluding fuel surcharge increased $2.9 million or 0.8% compared to the same quarter in 2018. The primary factors driving the increases in total operating revenue and revenue, before fuel surcharge, excluding our Mexico operations, were improved pricing in our Truckload segment combined with increased miscellaneous revenues, partially offset by decreased volumes and pricing in our Brokerage segment and decreased fuel surcharge revenues. While we are not seeing the same opportunities in the spot market in 2019 compared to 2018, we expect contract rates to continue to increase sequentially during the remainder of 2019 and to outpace cost inflation, absent changes in the macroeconomic environment.

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A summary of our revenue generated by segment for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended
	March 31,
	2019		2018
	(dollars in thousands)
Truckload revenue, before fuel surcharge	$	329,068	$	328,317
Fuel surcharge		40,051		42,850
Total Truckload revenue		369,119		371,167
Brokerage revenue		46,244		54,541
Total operating revenue	$	415,363	$	425,708

  

The following is a summary of our key Truckload segment performance indicators, before fuel surcharge and excluding miles from services in Mexico, for the three months ended March 31, 2019 and 2018. Average tractors, average company‑owned tractors and average independent contractor tractors exclude tractors in Mexico.

	Three Months Ended
	March 31,
	2019		2018
Over the road
Average revenue per tractor per week	$	3,616	$	3,850
Average revenue per mile	$	1.985	$	1.972
Average revenue miles per tractor per week		1,822		1,952
Average tractors		3,617		3,622
Dedicated
Average revenue per tractor per week	$	3,961	$	3,544
Average revenue per mile	$	2.337	$	2.183
Average revenue miles per tractor per week		1,695		1,623
Average tractors		2,658		2,623
Consolidated
Average revenue per tractor per week	$	3,762	$	3,721
Average revenue per mile	$	2.128	$	2.051
Average revenue miles per tractor per week		1,768		1,814
Average tractors		6,275		6,245

For the quarter ended March 31, 2019, our Truckload revenue, before fuel surcharge increased by $0.8 million, or 0.2%, compared to the same quarter in 2018. Excluding our Mexico operations, Truckload revenue before fuel surcharge increased $11.2 million or 3.6%. The primary factors driving the increase in Truckload revenue were a 3.8% increase in revenue per loaded mile due to increased contract rates, a slight increase in average available tractors, an increase of $8.5 million in miscellaneous revenue, partially offset by 2.5% decrease in average revenue miles per tractor.  Fuel surcharge revenue decreased by $2.8 million, or 6.5%, to $40.1 million, compared with $42.9 million in the same quarter in 2018. The Department of Energy (“DOE”) national weekly average fuel price per gallon remained essentially constant for the quarter ended March 31, 2019 compared to the same quarter in 2018. The decrease in fuel surcharge revenue primarily relates to decreased revenue miles of 2.7% compared to the same quarter in 2018.

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The key performance indicator of our Brokerage segment is gross margin percentage (brokerage revenue less purchased transportation expense expressed as a percentage of total operating revenue). Gross margin percentage can be impacted by the rates charged to customers and the costs of securing third‑party carriers. The following table lists the gross margin percentage for our Brokerage segment for the three months ended March 31, 2019 and 2018.

	Three Months Ended
	March 31,
	2019			2018
Gross margin percentage		17.5	%		14.0	%

          

For the quarter ended March 31, 2019, our Brokerage revenue decreased by $8.3 million, or 15.2%, compared to the same quarter in 2018. The primary factors driving the decrease in Brokerage revenue were a 13.8% decrease in load count combined with a 1.6% decrease in average revenue per load. Average revenue per load decreased due to non-contracted spot rates declining more than 20.0%. We experienced an increase in our gross margin to 17.5% in the first quarter of 2019 compared to 14.0% in the same period of the prior year as a result of sourcing third party capacity more efficiently.

Operating Expenses

For comparison purposes in the discussion below, we use total operating revenue and revenue, before fuel surcharge when discussing changes as a percentage of revenue. As it relates to the comparison of expenses to revenue, before fuel surcharge, we believe that removing fuel surcharge revenue, which is sometimes a volatile source of revenue affords a more consistent basis for comparing the results of operations from period‑to‑period.

Individual expense line items as a percentage of total operating revenue also are affected by fluctuations in the percentage of our revenue generated by independent contractor and brokerage loads.

Salaries, Wages and Benefits

Salaries, wages and benefits consist primarily of compensation for all employees. Salaries, wages and benefits are primarily affected by the total number of miles driven by company drivers, the rate per mile we pay our company drivers, employee benefits such as health care and workers’ compensation, and to a lesser extent by the number of, and compensation and benefits paid to, non‑driver employees.

The following is a summary of our salaries, wages and benefits for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019			2018
	(dollars in thousands)
Salaries, wages and benefits	$	124,563		$	132,924
% of total operating revenue		30.0	%		31.2	%
% of revenue, before fuel surcharge		33.2	%		34.7	%

For the quarter ended March 31, 2019, salaries, wages and benefits decreased $8.4 million, or 6.3%, compared with the same quarter in 2018. This decrease in absolute dollar terms was due primarily to $4.5 million of lower driver wages as our company driver miles decreased 12.6% as compared to the same quarter in 2018, due primarily to independent contractor miles comprising a greater percentage of our miles. Our OTR driver pay on a per mile basis increased as a result of higher incentive-based pay as compared to the same quarter in 2018. Our office wages decreased primarily due to the divesture of our Mexico business. During the three months ended March 31, 2019, our workers’ compensation expense and group health claims expense decreased approximately 21.4%, due to positive trends in our workers’ compensation claims, partially offset by increased group health claims expense as compared to the same quarter in 2018. In the near term, we believe salaries, wages and benefits will increase as a result of a tight driver market, wage inflation and higher healthcare costs. As a percentage of revenue, we expect salaries, wages and benefits will fluctuate based on our ability to generate offsetting increases in average revenue per total mile and the percentage of revenue generated by independent contractors and brokerage operations, for which payments are reflected in the “Purchased transportation” line item.

Fuel and Fuel Taxes

Fuel and fuel taxes consist primarily of diesel fuel expense and fuel taxes for our company‑owned and leased tractors. The primary factors affecting our fuel and fuel taxes expense are the cost of diesel fuel, the miles per gallon we realize with our equipment and the number of miles driven by company drivers.

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We believe that the most effective protection against net fuel cost increases in the near term is to maintain an effective fuel surcharge program and to operate a fuel‑efficient fleet by incorporating fuel efficiency measures, such as auxiliary heating units, installation of aerodynamic devices on tractors and trailers and low‑rolling resistance tires on our tractors, engine idle limitations and computer‑optimized fuel‑efficient routing of our fleet.

The following is a summary of our fuel and fuel taxes for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019			2018
	(dollars in thousands)
Fuel and fuel taxes	$	46,904		$	58,389
% of total operating revenue		11.3	%		13.7	%
% of revenue, before fuel surcharge		12.5	%		15.3	%

For the quarter ended March 31, 2019, fuel and fuel taxes decreased $11.5 million, or 19.7%, compared with the same quarter in 2018. The decrease in fuel and fuel taxes was primarily the result of a 12.6% decrease in company driver miles, a $2.5 million decrease due to the divesture of our Mexico business, and a 2.9% increase in our average miles per gallon compared to the same quarter in 2018. The average DOE fuel price per gallon remained essentially constant for the quarter ended March 31, 2019, compared to the same quarter in 2018.

To measure the effectiveness of our fuel surcharge program, we calculate “net fuel expense” by subtracting fuel surcharge revenue (other than the fuel surcharge revenue we reimburse to independent contractors, which is included in purchased transportation) from our fuel expense. Our net fuel expense as a percentage of revenue, before fuel surcharge, is affected by the cost of diesel fuel net of surcharge collection, the percentage of miles driven by company tractors and our percentage of non‑revenue generating miles, for which we do not receive fuel surcharge revenues. Net fuel expense as a percentage of revenue, before fuel surcharge, is shown below:

	Three Months Ended
	March 31,
	2019			2018
	(dollars in thousands)
Fuel surcharge revenue	$	40,051		$	42,850
Less: fuel surcharge revenue reimbursed to independent contractors		10,480			7,956
Company fuel surcharge revenue		29,571			34,894
Total fuel and fuel taxes	$	46,904		$	58,389
Less: company fuel surcharge revenue		29,571			34,894
Net fuel expense	$	17,333		$	23,495
% of total operating revenue		4.2	%		5.5	%
% of revenue, before fuel surcharge		4.6	%		6.1	%

For the quarter ended March 31, 2019, net fuel expense decreased $6.2 million, or 26.2%, compared with the same quarter in 2018. During the quarter ended March 31, 2019, the decrease in net fuel expenses was primarily the result of a $2.5 million decrease due to the divesture of our Mexico business, 2.9% increase in average miles per gallon, and a decrease in the fuel surcharge per mile paid to independent contractors. Independent contractors accounted for 25.4% of the average tractors available compared to 17.5% in the same quarter of 2018. In the near term, our net fuel expense is expected to fluctuate as a percentage of total operating revenue and revenue, before fuel surcharge, based on factors such as diesel fuel prices, the percentage recovered from fuel surcharge programs, the percentage of uncompensated miles, the percentage of revenue generated by independent contractors, the percentage of revenue generated by team‑driven tractors (which tend to generate higher miles and lower revenue per mile, thus proportionately more fuel cost as a percentage of revenue).

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Vehicle Rents and Depreciation and Amortization

Vehicle rents consist primarily of payments for tractors and trailers financed with operating leases. The primary factors affecting this expense item include the size and age of our tractor and trailer fleets, the cost of new equipment and the relative percentage of owned versus leased equipment.

Depreciation and amortization consists primarily of depreciation for owned tractors and trailers. The primary factors affecting these expense items include the size and age of our tractor and trailer fleets, the cost of new equipment and the relative percentage of owned equipment and equipment acquired through debt or finance leases versus equipment leased through operating leases. We use a mix of finance leases and operating leases to finance our revenue equipment with individual decisions being based on competitive bids and tax projections. Gains or losses realized on the sale of owned revenue equipment are included in depreciation and amortization for reporting purposes.

Vehicle rents and depreciation and amortization are closely related because both line items fluctuate depending on the relative percentage of owned equipment and equipment acquired through finance leases versus equipment leased through operating leases. Vehicle rents increase with greater amounts of equipment acquired through operating leases, while depreciation and amortization increases with greater amounts of owned equipment and equipment acquired through finance leases. Because of the inverse relationship between vehicle rents and depreciation and amortization, we review both line items together.

The following is a summary of our vehicle rents and depreciation and amortization for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019			2018
	(dollars in thousands)
Vehicle Rents	$	18,976		$	20,022
Depreciation and amortization, net of (gains) losses on sale of property		23,062			24,706
Vehicle Rents and Depreciation and amortization of property and equipment	$	42,038		$	44,728
% of total operating revenue		10.1	%		10.5	%
% of revenue, before fuel surcharge		11.2	%		11.7	%

For the quarter ended March 31, 2019, vehicle rents decreased $1.0 million, or 5.2%, compared to the same quarter in 2018. The decrease in vehicle rents was primarily due to a decrease in the short term trailer rentals and the divesture of our Mexico business as compared to the same quarter in 2018. Depreciation and amortization, net of (gains) losses on sale of property and equipment decreased $1.6 million, or 6.6%, compared to the same quarter in 2018. Over the balance of 2019, we currently plan to replace owned tractors with new owned tractors as they reach approximately 475,000 miles, and a portion of our leased tractors with owned equipment when their respective lease terminates. As a result of our 2019 replacement cycle, which is above normalized levels due to a large purchase of more fuel efficient tractors approximately four years ago, we expect the average age of our company tractor fleet will reduce from 28 months as of December 31, 2018 to approximately 18 months as we exit 2019. Our mix of owned and leased equipment may vary over time due to tax, financing and flexibility, among other factors.

Purchased Transportation

Purchased transportation consists of the payments we make to independent contractors, including fuel surcharge reimbursements paid to independent contractors, in our Truckload segment, and payments to third‑party carriers in our Brokerage segment.

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The following is a summary of our purchased transportation for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019			2018
	(dollars in thousands)
Purchased transportation	$	114,005		$	101,776
% of total operating revenue		27.4	%		23.9	%
% of revenue, before fuel surcharge		30.4	%		26.6	%

For the quarter ended March 31, 2019, purchased transportation increased $12.2 million, or 12.0%, compared to the same quarter in 2018. The increase in purchased transportation was primarily due to a 45.9% increase in average independent contractors, a $2.5 million increase in fuel surcharge reimbursement to independent contractors, partially offset by an $8.3 million decrease in Brokerage revenue as compared to the same quarter in 2018.

Because we reimburse independent contractors for fuel surcharges we receive, we subtract fuel surcharge revenue reimbursed to them from our purchased transportation. The result, referred to as purchased transportation, net of fuel surcharge reimbursements, is evaluated as a percentage of total operating revenue and as a percentage of revenue, before fuel surcharge, as shown below:

	Three Months Ended
	March 31,
	2019			2018
	(dollars in thousands)
Purchased transportation	$	114,005		$	101,776
Less: fuel surcharge revenue reimbursed to independent contractors		10,480			7,956
Purchased transportation, net of fuel surcharge reimbursement	$	103,525		$	93,820
% of total operating revenue		24.9	%		22.0	%
% of revenue, before fuel surcharge		27.6	%		24.5	%

For the quarter ended March 31, 2019, purchased transportation, net of fuel surcharge reimbursement, increased $9.7 million, or 10.3%, compared to the same quarter in 2018. This increase was primarily due to the 45.9% increase in average independent contractors, partially offset by the $8.3 million decrease in Brokerage revenue compared to the same quarter in 2018. This expense category will fluctuate with the number and percentage of loads hauled by independent contractors and third‑party carriers, as well as the amount of fuel surcharge revenue passed through to independent contractors. If industry‑wide trucking capacity continues to tighten in relation to freight demand, we may need to increase the amounts we pay to third‑party carriers and independent contractors, which could increase this expense category on an absolute basis and as a percentage of total operating revenue and revenue, before fuel surcharge, absent an offsetting increase in revenue. Our recent success in growing our lease-purchase program and independent contractor drivers have contributed to increased purchased transportation expense. If we are successful in continuing these efforts, we would expect this line item to increase as a percentage of total operating revenue and revenue, before fuel surcharge.

Operating Expenses and Supplies

Operating expenses and supplies consist primarily of ordinary vehicle repairs and maintenance costs, driver on‑the‑road expenses, tolls and advertising expenses related to driver recruiting. Operating expenses and supplies are primarily affected by the age of our company‑owned and leased fleet of tractors and trailers, the number of miles driven in a period and driver turnover.

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The following is a summary of our operating expenses and supplies for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019			2018
	(dollars in thousands)
Operating expenses and supplies	$	27,945		$	29,791
% of total operating revenue		6.7	%		7.0	%
% of revenue, before fuel surcharge		7.4	%		7.8	%

For the quarter ended March 31, 2019, operating expenses and supplies decreased $1.8 million, or 6.2%, compared to the same quarter in 2018. The decrease was primarily due to decreased tractor maintenance expense as a result of increased independent contractors and the divesture of our Mexico business, partially offset by increased driver hiring costs compared to the same quarter in 2018. Independent contractors are responsible for the maintenance of their tractor and now account for 25.4% of the total average tractors compared to 17.5% in the prior year quarter.

Insurance Premiums and Claims

Insurance premiums and claims consists primarily of retained amounts for liability (personal injury and property damage), physical damage and cargo damage, as well as insurance premiums. The primary factors affecting our insurance premiums and claims are the frequency and severity of accidents, trends in the development factors used in our actuarial accruals and developments in large, prior year claims. The number of accidents tends to increase with the miles we travel. With our significant retained amounts, insurance claims expense may fluctuate significantly and impact the cost of insurance premiums and claims from period‑to‑period, and any increase in frequency or severity of claims or adverse loss development of prior period claims would adversely affect our financial condition and results of operations. We renewed our liability insurance policies on September 1, 2018 and reduced our deductible to $3.0 million per occurrence.

The following is a summary of our insurance premiums and claims expense for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019			2018
	(dollars in thousands)
Insurance premiums and claims	$	24,353		$	20,170
% of total operating revenue		5.9	%		4.7	%
% of revenue, before fuel surcharge		6.5	%		5.3	%

For the quarter ended March 31, 2019, insurance premiums and claims increased $4.2 million, or 20.7%, compared to the same quarter in 2018. Insurance premiums and claims increased primarily due to increased physical damage and liability claims primarily as a result of adverse weather in the first quarter of 2019 as compared to the same quarter in 2018. We do not expect our insurance and claims experience in the first quarter of 2019 to be ongoing. During the fourth quarter of 2017, we began installing event recorders on our tractors, and we had installed event recorders in substantially all of our tractors in our fleet as of the second quarter of 2018. We believe event recorders will give us the ability to better train our drivers with respect to safe driving behavior, which in turn may help reduce insurance costs over time. We expect to begin seeing measurable results from the event recorder installation in the second half of 2019.

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Interest

Interest expense consists of cash interest, amortization of original issuance discount and deferred financing fees and purchase commitment interest related to our obligation to acquire the remaining equity interest in Xpress Internacional.

The following is a summary of our interest expense for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019		2018
	(dollars in thousands)
Interest expense, excluding non-cash items		5,444		11,835
Original issue discount and deferred financing amortization		159		871
Purchase commitment interest		-		(48	)
Interest expense, net	$	5,603	$	12,658

For the quarter ended March 31, 2019, interest expense decreased $7.1 million, primarily due to decreased equipment and revolver borrowings combined with lower interest rates related to our term loan compared to the same quarter in 2018. Based on the repayment of our prior credit arrangements in connection with the IPO, along with the entry into our existing Credit Facility, we expect our interest expense to approximate $22.0 million for 2019.

Liquidity and Capital Resources

Overview

Our business requires substantial amounts of cash to cover operating expenses as well as to fund capital expenditures, working capital changes, principal and interest payments on our obligations, lease payments, letters of credit to support insurance requirements and tax payments when we generate taxable income. Recently, we have financed our capital requirements with borrowings under our Credit Facility, cash flows from operating activities, direct equipment financing, operating leases and proceeds from equipment sales.

We believe we can fund our expected cash needs, including debt repayment, in the short‑term with projected cash flows from operating activities, borrowings under our Credit Facility and direct debt and lease financing we believe to be available for at least the next 12 months. Over the long‑term, we expect that we will continue to have significant capital requirements, which may require us to seek additional borrowings, lease financing or equity capital. We have obtained a significant portion of our revenue equipment under operating leases, which are not reflected as net capital expenditures. The availability of financing and equity capital will depend upon our financial condition and results of operations as well as prevailing market conditions.

At March 31, 2019, we had approximately $31.7 million of outstanding letters of credit, $0 in outstanding borrowings and $118.3 million of availability under our $150.0 million revolving credit facility.

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Sources of Liquidity

Credit Facility

In June 2018, we entered into a new credit facility (the “Credit Facility”) that contains a $150.0 million revolving component (the “Revolving Facility”) and a $200.0 million term loan component (the “Term Facility”). The Credit Facility contains an accordion feature that, so long as no event of default exists, allows us to request an increase in the borrowing amounts under the Revolving Facility or the Term Facility by a combined maximum amount of $75.0 million. Borrowings under the Credit Facility are classified as either “base rate loans” or “Eurodollar rate loans.” Base rate loans accrue interest at a base rate equal to the agent’s prime rate plus an applicable margin that was set at 1.25% through September 30, 2018 and adjusted quarterly thereafter between 0.75% and 1.50% based on our consolidated net leverage ratio. Eurodollar rate loans will accrue interest at London Interbank Offered Rate, or a comparable or successor rate approved by the administrative agent, plus an applicable margin that was set at 2.25% through September 30, 2018 and adjusted quarterly thereafter between 1.75% and 2.50% based on our consolidated net leverage ratio. The Credit Facility requires payment of a commitment fee on the unused portion of the Revolving Facility commitment of between 0.25% and 0.35% based on our consolidated net leverage ratio. In addition, the Revolving Facility includes, within its $150.0 million revolving credit facility, a letter of credit sub facility in an aggregate amount of $75.0 million and a swingline sub facility in an aggregate amount of $15.0 million. The Term Facility has scheduled quarterly principal payments between 1.25% and 2.50% of the original face amount of the Term Facility plus any additional amount borrowed pursuant to the accordion feature of the Term Facility, with the first such payment occurring on the last day of our fiscal quarter ending September 30, 2018.  The Credit Facility will mature on June 18, 2023.

Borrowings under the Credit Facility are prepayable at any time without premium and are subject to mandatory prepayment from the net proceeds of certain asset sales and other borrowings. The Credit Facility is secured by a pledge of substantially all of our assets, excluding, among other things, certain real estate and revenue equipment financed outside the Credit Facility.

The Credit Facility contains restrictive covenants including, among other things, restrictions on our ability to incur additional indebtedness or issue guarantees, to create liens on our assets, to make distributions on or redeem equity interests, to make investments, to transfer or sell properties or other assets and to engage in mergers, consolidations, or acquisitions. In addition, the Credit Facility requires us to meet specified financial ratios and tests.

At March 31, 2019, the Revolving Facility had issued collateralized letters of credit in the face amount of $31.7 million, with $0 borrowings outstanding and $118.3 million available to borrow and the Term Facility had $192.5 million outstanding.

The Credit Facility includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts payable under the Credit Facility may be accelerated, and the Lenders’ commitments may be terminated. At March 31, 2019, the Company was in compliance with all financial covenants prescribed by the Credit Facility.

Cash Flows

Our summary statements of cash flows for the three months ended March 31, 2019 and 2018 are set forth in the table below:

	Three Months Ended
	March 31,
	2019			2018
	(dollars in thousands)
Net cash provided by (used in) operating activities	$	25,479		$	(1,863	)
Net cash used in investing actitivies	$	(32,491	)	$	(18,695	)
Net cash provided by (used in) financing activities	$	(12,569	)	$	15,496

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Operating Activities

For the three months ended March 31, 2019, we generated cash flows from operating activities of $25.5 million, an increase of $27.3 million compared to the same period in 2018. The increase was due primarily to a $2.5 million increase in net income adjusted for noncash items, and a $24.9 million decrease in our operating assets and liabilities. The increase in net income adjusted for noncash items was primarily attributable to a 3.8% increase in revenue per loaded mile, improved operating performance at our Brokerage segment and lower interest expense in the three months ended March 31, 2019 as compared to the same period in 2018, partially offset by increased insurance premiums and claims expense. Our operating assets and liabilities decreased $24.9 million during the three months ended March 31, 2019 as compared to the same period in 2018, due in part to increased accounts receivable collections, and decreased payments for accounts payable and other accrued liabilities related to timing of payments.

Investing Activities

For the three months ended March 31, 2019, net cash flows used in investing activities were $32.5 million, an increase of $13.8 million compared to the same period in 2018. This increase is primarily the result of increased equipment purchases as compared to the same period in 2018, combined with the cash disposed in conjunction with the sale of our Mexico subsidiary. We expect our net capital expenditures for calendar year 2019 will approximate $170.0 million to $190.0 million to execute our equipment replacement strategy and will be financed with cash from operations, borrowings on our line of credit and secured debt financing.

Financing Activities

For the three months ended March 31, 2019, net cash flows used in financing activities were $12.6 million, an increase of $28.1 million compared to the same period in 2018. The increase is primarily due to decreased revenue equipment borrowings and net borrowings under our revolving line of credit as compared to the same period in 2018.

Working Capital

As of March 31, 2019, we had a working capital deficit of $41.6million, representing an $8.0million increase in our working capital from March 31, 2018, primarily resulting from decreased other accrued liabilities and accounts payable, partially offset by decreased customer receivables. Our current liabilities increased by $56.9 million as a result of the adoption of the new lease standard. When we analyze our working capital, we typically exclude balloon payments in the current maturities of long-term debt as these payments are typically either funded with the proceeds from equipment sales or addressed by extending the maturity of such payments. We believe this facilitates a more meaningful analysis of our changes in working capital from period-to-period. Excluding balloon payments included in current maturities of long-term debt and the current portion of our operating lease liability as of March 31, 2019, we had a working capital surplus of $60.3million, compared with a working capital deficit of $2.3 million at March 31, 2018. Excluding only the balloon payments included in current maturities of debt, we had a working capital surplus of $3.4 million at March 31, 2019.

Working capital deficits are common to many trucking companies that operate by financing revenue equipment purchases through borrowing, or lease arrangements. When we finance revenue equipment through borrowing or lease arrangements, the principal amortization or, in the case of operating leases, the present value of the lease payments scheduled for the next twelve months, is categorized as a current liability, although the revenue equipment and operating lease right of use assets are classified as long-term assets. Consequently, each acquisition of revenue equipment financed with borrowing, or lease arrangements decreases working capital. We believe a working capital deficit has little impact on our liquidity. Based on our expected financial condition, net capital expenditures, results of operations, related net cash flows, installment notes, and other sources of financing, we believe our working capital and sources of liquidity will be adequate to meet our current and projected needs and we do not expect to experience material liquidity constraints in the foreseeable future.

Operating Lease Arrangements

We leased approximately 2,100 tractors and 7,900 trailers under operating leases at March 31, 2019. Operating leases have been an important source of financing for our revenue equipment. Lease payments in respect of such equipment are reflected in our unaudited condensed consolidated statements of comprehensive income in the line item “Vehicle rents.” Our revenue equipment rental expense including short term rentals was $19.0 million in the first quarter of 2019, compared with $20.0 million in the first quarter of 2018. The lease terms generally represent the estimated usage period of the equipment, which is generally substantially less than the economic lives. Certain revenue equipment leases provide for guarantees by us of a portion of the specified residual value at the end of the lease term. The maximum potential amount of future payments (undiscounted) under these guarantees is approximately $27.6 million as of March 31, 2019. The residual value of a portion of the related leased tractor equipment is covered by repurchase or trade agreements between us and equipment manufacturers. We expect the fair market value of the equipment at the end of the lease term will be approximately equal to the residual value.

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Seasonality

In the trucking industry, revenue has historically decreased as customers reduce shipments following the winter holiday season and as inclement weather impedes operations. At the same time, operating expenses have generally increased, with fuel efficiency declining because of engine idling and weather, causing more physical damage equipment repairs and insurance claims and costs. For the reasons stated, first quarter results historically have been lower than results in each of the other three quarters of the year. Over the past several years, we have seen increases in demand at varying times, including surges between Thanksgiving and the year‑end holiday season.

Contractual Obligations

During the three months ended March 31, 2019, there were no material changes in our commitments or contractual obligations.

Critical Accounting Policies

We have reviewed our critical accounting policies and considered whether any new critical accounting estimates or other significant changes to our accounting policies require any additional disclosures. We adopted ASC 842, Leases, on January 1, 2019.  See Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements included under Part 1, Item 1 of this report.  There have been no other significant changes to our accounting policies since the disclosures made in our Annual Report on Form 10-K for the year ended December 31, 2018.

ITEM 3.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our market risks have not changed materially from the market risks reported in our Annual Report on Form 10-K for the year ended December 31, 2018.

ITEM 4.          CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2019. This evaluation is performed to determine if our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. Due to the material weaknesses described below and the Company’s evaluation, the CEO and CFO have concluded that our disclosure controls and procedures were not effective as of March 31, 2019.

Material Weaknesses in Internal Control over Financial Reporting as of December 31, 2018

As described in our Annual Report on Form 10-K for the year ended December 31, 2018, during the course of preparing for our IPO, we identified material weaknesses in our internal control over financial reporting, some of which continue to exist as of March 31, 2019. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. We did not maintain effective internal control over financial reporting related to the control activities component of Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, the COSO framework. The control activities material weakness contributed to the following additional material weaknesses: (i) ineffective design of information technology general computer controls with respect to program development, change management, computer operations, and user access; (ii) ineffective design of controls over income tax accounting; and (iii) insufficient evidential matter to support design of our controls. These deficiencies did not result in a material misstatement to our annual or interim consolidated financial statements. However, there is a risk that these deficiencies could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected.

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Remediation of a Component of a Previously Disclosed Material Weakness

The material weakness related to the ineffective design of information technology general controls with respect to program management, change management computer operations and user access also included a component related to inappropriate segregation of duties with respect to creating and posting journal entries. We have remediated the component of the material weakness related to segregation of duties over creating and posting journal entries by designing, implementing, and testing controlsto ensure that journal entries posted into the general ledger are reviewed by a separate individual, thus resulting in proper segregation of duties.

Changes in Internal Control Over Financial Reporting

We are currently in the process of remediating the above material weaknesses and have taken numerous steps to enhance our internal control environment and address the underlying causes of the material weaknesses. These efforts include designing and implementing the appropriate information technology general controls and controls over income tax accounting. In addition, we are enhancing our process to retain evidential matter that supports the design and implementation of our controls. We are committed to maintaining a strong internal control environment, and we expect to continue our efforts to ensure the material weaknesses described above are remediated. While we intend to complete our remediation process as quickly as possible, we cannot estimate a time when the remediation will be complete. Other than the implementation of these additional controls and new controls related to our adoption of ASC 842, Leases,  there were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2019 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Controls

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management, including our CEO and CFO, recognize that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

PART II          OTHER INFORMATION

ITEM 1.          LEGAL PROCEEDINGS

We are involved in various other litigation and claims primarily arising in the normal course of business, which include claims for personal injury or property damage incurred in the transportation of freight. Our insurance program for liability, physical damage and cargo damage involves varying risk retention levels. Claims in excess of these risk retention levels are covered by insurance in amounts that management considers to be adequate. Based on its knowledge of the facts and, in certain cases, advice of outside counsel, management believes the resolution of claims and pending litigation, taking into account existing reserves, will not have a materially adverse effect on us. Information relating to legal proceedings is included in Note 7 to our unaudited condensed consolidated financial statements, and is incorporated herein by reference.

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ITEM 1A.       RISK FACTORS

While we attempt to identify, manage, and mitigate risks and uncertainties associated with our business, some level of risk and uncertainty will always be present. Our Annual Report on Form 10-K for the year ended December 31, 2018, in the section entitled "Item 1A. Risk Factors," describes some of the risks and uncertainties associated with our business. These risks and uncertainties have the potential to materially affect our business, financial condition, results of operations, cash flows, projected results, and future prospects.

ITEM 2.          UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the quarter ended March 31, 2018, we did not engage in unregistered sales of securities or any other transactions required to be reported under this Item 2 of Part II on Form 10-Q.

The payment of cash dividends is currently limited by our financing arrangements, including certain covenants under the Credit Facility.

ITEM 3.          DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.          MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.          OTHER INFORMATION

Not applicable.

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ITEM 6.          EXHIBITS

Exhibit Number	Description
3.1	Second Amended and Restated Articles of Incorporation of U.S. Xpress Enterprises, Inc., dated and effective as of June 8, 2018 (incorporated by reference to Exhibit 3.1 filed with the Company’s Registration Statement on Form S-1/A (File No. 333-224711) filed on June 11, 2018).
3.2	Amended and Restated Bylaws of U.S. Xpress Enterprises, Inc., dated and effective as of June 8, 2018 (incorporated by reference to Exhibit 3.2 filed with the Company’s Registration Statement on Form S-1/A (File No. 333-224711) filed on June 11, 2018).
10.1*#	The Executive Nonqualified Excess Plan Adoption Agreement.
31.1#	Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Eric Fuller, the Company's Principal Executive Officer
31.2#	Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Eric Peterson, the Company's Principal Financial Officer
32.1##	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Eric Fuller, the Company's Chief Executive Officer
32.2##	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Eric Peterson, the Company's Chief Financial Officer
101.INS#	XBRL Instance Document
101.SCH#	XBRL Taxonomy Extension Schema Document
101.CAL#	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF#	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB#	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE#	XBRL Taxonomy Extension Presentation Linkbase Document

*          Management contract or compensatory plan or arrangement

#          Filed herewith.

##        Furnished herewith.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	U.S. XPRESS ENTERPRISES, INC.
Date: May 7, 2019	By:	/s/ Eric Peterson
		Eric Peterson
		Chief Financial Officer

EX-10.1

Exhibit 10.1

NOTE: Execution of this Adoption Agreement creates a legal liability of the Employer with significant tax consequences to the Employer and Participants. Principal Life Insurance Company disclaims all liability for the legal and tax consequences which result from the elections made by the Employer in this Adoption Agreement.

Principal Life Insurance Company, Raleigh, NC 27612

A member of the Principal Financial Group

THE EXECUTIVE NONQUALIFIED EXCESS PLAN

ADOPTION AGREEMENT

THIS AGREEMENT is the adoption by U.S. Xpress Enterprises, Inc. (the "Company") of the Executive Nonqualified Excess Plan ("Plan").

W I T N E S S E T H

WHEREAS, the Company desires to adopt the Plan as an unfunded, nonqualified deferred compensation plan; and

WHEREAS, the provisions of the Plan are intended to comply with the requirements of Section 409A of the Code and the regulations thereunder and shall apply to amounts subject to section 409A; and

WHEREAS, the Company has been advised by Principal Life Insurance Company to obtain legal and tax advice from its professional advisors before adopting the Plan,

NOW, THEREFORE, the Company hereby adopts the Plan in accordance with the terms and conditions set forth in this Adoption Agreement:

ARTICLE I

Terms used in this Adoption Agreement shall have the same meaning as in the Plan, unless some other meaning is expressly herein set forth. The Employer hereby represents and warrants that the Plan has been adopted by the Employer upon proper authorization and the Employer hereby elects to adopt the Plan for the benefit of its Participants as referred to in the Plan. By the execution of this Adoption Agreement, the Employer hereby agrees to be bound by the terms of the Plan.

ARTICLE II

The Employer hereby makes the following designations or elections for the purpose of the Plan:

2.6          Committee:The duties of the Committee set forth in the Plan shall be satisfied by:

XX	(a)	Company.
__	(b)	The administrative committee appointed by the Board to serve at the pleasure of the Board.
__	(c)	Board.
__	(d)	Other (specify):___________________________.

2.8          Compensation:The “Compensation” of a Participant shall mean all of a Participant’s:

XX	(a)	Base salary.
XX	(b)	Service Bonus.
		__	Service Bonus earned from 1/1 – 12/31, paid on or around first quarter of the following Plan Year.
		__	Service Bonus earned each calendar quarter, paid on or around the following calendar quarter.
		XX	Service Bonus with no defined earnings period (e.g. a “spot bonus”).
XX	(c)	Performance-Based Compensation earned in a period of 12 months or more.
		XX	Performance Based Bonus earned from 1/1 -12/31, paid on or around first quarter the following Plan Year and whose elections must be made no later than 6/30 of the Plan Year it is earned.
		__	Performance Based Bonus earned from _______, paid on or around ________ the following Plan Year and whose elections must be made no later than _______ of the Plan Year it is earned.
XX	(d)	Commissions.
XX	(e)	Compensation received as an Independent Contractor reportable on Form 1099.
XX	(f)	Other: An amount equivalent to 401k refund.

2.9          Crediting Date:The Deferred Compensation Account of a Participant shall be credited as follows:

Participant Deferral Credits at the time designated below:

XX	(a)	On any business day as specified by the Employer.
__	(b)	Each pay day as reported by the Employer.
__	(c)	The last business day of each payroll period during the Plan Year.

Employer Credits at the time designated below:

XX (a) On any business day as specified by the Employer.

2

2.13          Effective Date:

__	(a)	This is a newly-established Plan, and the Effective Date of the Plan is ____________.
XX	(b)	This is an amendment of a plan named Nonqualified Deferred Compensation Plan of U.S. Xpress Enterprises, Inc. dated January 31, 2007 and governing all contributions in the plan through January 31, 2013. This plan was subsequently amended on Februarv 1, 2013 governing all contributions to the plan through August 26, 2018. The Effective Date of this amended Plan is August 27, 2018.

2.20          Normal Retirement Age: The Normal Retirement Age of a Participant shall be:

XX	(a)	Age 65.
__	(b)	The later of age __ or the _____ anniversary of the participation commencement date. The participation commencement date is the first day of the first Plan Year in which the Participant commenced participation in the Plan.
__	(c)	Other: __________________________.

2.23          Participating Employer(s): As of the Effective Date, the following Participating Employer(s) are parties to the Plan:

Name of Employer	EIN
U.S. Xpress Enterprises, Inc.	62-1378182

2.26          Plan: The name of the Plan is

  Nonqualified Deferred Compensation Plan of U.S. Xpress Enterprises, Inc.

2.28          Plan Year: The Plan Year shall end each year on the last day of the month of December.

2.30          Seniority Date: The date on which a Participant has:

__	(a)	Attained age __.
__	(b)	Completed __ Years of Service from First Date of Service.
__	(c)	Attained age __ and completed __ Years of Service from First Date of Service.
XX	(d)	Not applicable – distribution elections for Separation from Service are not based on Seniority Date.

3

4.1          Participant Deferral Credits: Subject to the limitations in Section 4.1 of the Plan, a Participant may elect to have his Compensation (as selected in Section 2.8 of this Adoption Agreement) deferred within the annual limits below by the following percentage or amount as designated in writing to the Committee:

XX	(a)	Base salary:
			minimum deferral:		%
			maximum deferral:	85	%
XX	(b)	Service Bonus:
		XX	Service Bonus
			minimum deferral:		%
			maximum deferral:	100	%
XX	(c)	Performance-Based Compensation:
		XX	Performance Based Bonus:
			minimum deferral:		%
			maximum deferral:	100	%
XX	(d)	Commissions:
			minimum deferral:		%
			maximum deferral:	100	%
XX	(e)	Form 1099 Compensation:
			minimum deferral:		%
			maximum deferral:	100	%
XX	(f)	Other: An amount equivalent to 401k refund
			minimum deferral:	100	%
			maximum deferral:	100	%
__	(g)	Participant deferrals not allowed.

4

4.1.2      Participant Deferral Credits and Employer Credits – Election Period:    Participant elections regarding Participant Deferral Credits and Employer Credits shall be subject to the following effective periods (one must be selected):

XX	(a)	Evergreen election. An election made by the Participant shall continue in effect for subsequent years until modified by the Participant as permitted in Section 4.1 and Section 4.2. (This option is not permitted if source year accounts are elected in Section 4.3)
__	(b)	Non-Evergreen election. Any election made by the Participant shall only remain in effect for the current election period and will then expire. An election for each subsequent year will be required as permitted in Sections 4.1 and 4.2.

4.2          Employer Credits: Employer Credits will be made in the following manner:

XX	(a)	Employer Discretionary Credits: The Employer may make discretionary credits to the Deferred Compensation Account of each Active Participant in an amount determined as follows:
		XX	(i)	An amount determined each Plan Year by the Employer.
		__	(ii)	Other: _______________________________________.
XX	(b)	Other Employer Credits: The Employer may make other credits to the Deferred Compensation Account of each Active Participant in an amount determined as follows:
		XX	(i)	An amount determined each Plan Year by the Employer.
		__	(ii)	Other:________________________________________.
__	(c)	Employer Credits not allowed.

5

4.3          Deferred Compensation Account: The Participant is permitted to establish the following accounts:

XX	(a)	Non-source year account(s). Deferred Compensation Account(s) will not established on a source year basis:
	XX	(i)	A Participant may establish only one account to be distributed upon Separation from Service. One set of payment options for that account is allowed as permitted in Section 7.1. Additional In-Service or Education accounts may be established as permitted in Section 5 .4.
	__	(b)	A Participant may establish multiple accounts to be distributed upon Separation from Service. Each account may have one set of payment options as permitted in Section 7.1 Additional In-Service or Education accounts may be established as permitted in Section 5.4. If this multiple account option is elected, the Participant will also be required to elect Separation from Service payment options for each In- Service or Education account established.
__	(b)	Source year account(s): Annual Deferred Compensation Account(s) will be established each year in which Participant Deferral Credits or Employer Credits are credited to the Participant. Only one account may be established each year for distribution upon Separation from Service. One set of payment options for that account is allowed as permitted in Section 7.1. Additional In-Service or Education accounts may be established for each source year as permitted in Section 5.4. If this option is selected, Evergreen elections as described in Section 4.1.2 are not permitted.

5.2          Disability of a Participant:

XX	(a)	A Participant's becoming Disabled shall be a Qualifying Distribution Event and the Deferred Compensation Account shall be paid by the Employer as provided in Section 7.1.
__	(b)	A Participant becoming Disabled shall not be a Qualifying Distribution Event.

5.3          Death of a Participant: If the Participant dies while in Service, the Employer shall pay a benefit to the Beneficiary in an amount equal to the vested balance in the Deferred Compensation Account of the Participant determined as of the date payments to the Beneficiary commence, plus:

__	(a)	An amount to be determined by the Committee.
XX	(b)	No additional benefits.

6

5.4          In-Service or Education Distributions:  In-Service and Education Accounts are permitted under the Plan:

XX	(a)	In-Service Accounts are allowed with respect to:
		__	Participant Deferral Credits only.
		__	Employer Credits only.
		XX	Participant Deferral and Employer Credits.
		In-service distributions may be made in the following manner:
		XX	Single lump sum payment.
		XX	Annual installments over a term certain not to exceed 5 years.
		Education Accounts are allowed with respect to:
		__	Participant Deferral Credits only.
		__	Employer Credits only.
		XX	Participant Deferral and Employer Credits.
		Education Accounts distributions may be made in the following manner:
		XX	Single lump sum payment.
		XX	Annual installments over a term certain not to exceed 5 years.
		If applicable, amounts not vested at the time payments due under this Section cease will be:
		__	Forfeited.
		__	Distributed at Separation from Service if vested at that time.
		XX	Other: Distributed annually when vested. (See Exhibit C)
__	(b)	No In-Service or Education Distributions permitted.

5.5          Change in Control Event:

XX	(a)	Participants may elect upon initial enrollment to have accounts distributed upon a Change in Control Event.
__	(b)	A Change in Control shall not be a Qualifying Distribution Event.

5.6          Unforeseeable Emergency Event:

XX	(a)	Participants may apply to have accounts distributed upon an Unforeseeable Emergency event.
__	(b)	An Unforeseeable Emergency shall not be a Qualifying Distribution Event.

7

6.          Vesting:An Active Participant shall be fully vested in the Employer Credits made to the Deferred Compensation Account upon the first to occur of the following events:

XX	(a)	Normal Retirement Age.
XX	(b)	Death.
XX	(c)	Disability.
XX	(d)	Change in Control Event.
XX	(e)	Satisfaction of the vesting requirement as specified below:
	XX	Employer Discretionary Credits:
		__	(i)	Immediate 100% vesting.
		__	(ii)	100% vesting after __ Years of Service.
		XX	(iii)	100% vesting at age 55.
		XX	(iv)	Number of Years of Service			Vested Percentage
					Less than	1	0	%
						1	0	%
						2	20	%
						3	40	%
						4	60	%
						5	80	%
						6	100	%
						7		%
						8		%
						9		%
						10 or more		%

For this purpose, Years of Service of a Participant shall be calculated from the date designated below:
XX	(1)	First day of Service.
__	(2)	Effective date of Plan Participation.
__	(3)	Each Crediting Date. Under this option (3), each Employer Credit shall vest based on the Years of Service of a Participant from the Crediting Date on which each Employer Discretionary Credit is made to his or her Deferred Compensation Account.

8

XX	Other Employer Credits:
	__	(i)	Immediate 100% vesting.
	__	(ii)	100% vesting after __ Years of Service.
	__	(iii)	100% vesting at age __.
	XX	(iv)	Number of Years of Service			Vested Percentage
				Less than	1	0	%
					1	25	%
					2	50	%
					3	75	%
					4	100	%
					5		%
					6		%
					7		%
					8		%
					9		%
					10 or more		%

For this purpose, Years of Service of a Participant shall be calculated from the date designated below:
__	(1)	First day of Service.
__	(2)	Effective date of Plan Participation.
XX	(3)	Each Crediting Date. Under this option (3), each Employer Credit shall vest based on the Years of Service of a Participant from the Crediting Date on which each Employer Discretionary Credit is made to his or her Deferred Compensation Account.

9

7.1          Payment Options:Any benefit payable under the Plan upon a permitted Qualifying Distribution Event may be made to the Participant or his Beneficiary (as applicable) in any of the following payment forms, as selected by the Participant in the Participation Agreement:

(a)	Separation from Service (Seniority Date is Not Applicable)
	XX	(i)	A lump sum.
	XX	(ii)	Annual installments over a term certain as elected by the Participant not to exceed 10 years.
(b)	Separation from Service prior to Seniority Date (If Applicable)
	__	(i)	A lump sum.
	XX	(ii)	Not Applicable.
(c)	Separation from Service on or After Seniority Date (If Applicable)
	__	(i)	A lump sum.
	__	(ii)	Annual installments over a term certain as elected by the Participant not to exceed __ years.
	XX	(iii)	Not Applicable.
(d)	Separation from Service Upon a Change in Control Event
	XX	(i)	A lump sum.
	XX	(ii)	Annual installments over a term certain as elected by the Participant not to exceed 10 years.
(e)	Death
	XX	(i)	A lump sum.
	__	(ii)	Annual installments over a term certain as elected by the Participant not to exceed __ years.
(f)	Disability
	XX	(i)	A lump sum.
	XX	(ii)	Annual installments over a term certain as elected by the Participant not to exceed 10 years.
	If applicable, amounts not vested at the time payments due under this Section cease will be:
	__	Forfeited.
	__	Distributed at Separation from Service if vested at that time.

10

(g)	Change in Control Event
	XX	(i)	A lump sum.
	XX	(ii)	Annual installments over a term certain as elected by the Participant not to exceed 10 years.
	If applicable, amounts not vested at the time payments due under this Section cease will be:
	__	Forfeited.
	__	Distributed at Separation from Service if vested at that time.

7.4          De Minimis Amounts.

__	(a)	Notwithstanding any payment election made by the Participant, the vested balance in all Deferred Compensation Account(s) of the Participant will be distributed in a single lump sum payment at the time designated under the Plan if at the time of a permitted Qualifying Distribution Event that is either a Separation from Service, death, Disability (if applicable) or Change in Control Event (if applicable) the vested balance does not exceed $ __________. In addition, the Employer may distribute a Participant’s vested balance in all Deferred Compensation Account(s) of the Participant at any time if the balance does not exceed the limit in Section 402(g)(1)(B) of the Code and results in the termination of the Participant’s entire interest in the Plan.
XX	(b)	There shall be no pre-determined de minimis amount under the Plan; however, the Employer may distribute a Participant’s vested balance at any time if the balance does not exceed the limit in Section 402(g)(1)(B) of the Code and results in the termination of the Participant’s entire interest in the Plan.

10.1          Contractual Liability:   Liability for payments under the Plan shall be the responsibility of the:

XX	(a)	Company.
__	(b)	Employer or Participating Employer who employed the Participant when amounts were deferred.

14.          Amendment and Termination of Plan: Notwithstanding any provision in this Adoption Agreement or the Plan to the contrary, Section 2.8, 5.1, 5.4 and 14 of the Plan shall be amended to read as provided in attached Exhibit A, B, C, D and E.

__ There are no amendments to the Plan.

17.8          Construction:   The provisions of the Plan shall be construed and enforced according to the laws of the State ofNevada, except to the extent that such laws are superseded by ERISA and the applicable provisions of the Code.

11

IN WITNESS WHEREOF, this Agreement has been executed as of the day and year stated below.

U.S. Xpress Enterprises, Inc.
Name of Employer
By:	/s/ Amanda Thompson
	Authorized Person
Date:	10/3/18

12

EXHIBIT A

Section 2.8   Independent Contractor means an individual in the Service of the Employer if the relationship between the individual and the Employer is not the legal relationship of employer and employee except that Independent Contractor shall not include independent contractors engaged by any of the relevant corporations as CDL licensed truck drivers. An individual shall cease to be an Independent Contractor upon the termination of the Independent Contractor's Service. An Independent Contractor shall include a director of the Employer who is not an Employee.

EXHIBIT B

Section 5.1 Separation from Service. If the Participant separates from Service with the Employer, the vested balance in the Deferred Compensation Account shall be paid to the Participant by the Employer as provided in Section 7. Notwithstanding the foregoing, no distribution shall be made earlier than six months after the date of separation from Service (or, if earlier, the date of death) with respect to a Participant who is a Specified Employee. Any payments to which a Specified Employee would be entitled during the first    six months following the date of separation from Service shall be accumulated and paid on the first day of the seventh month following the date of separation from service.

EXHIBIT C

Section 5.4 In-Service or Education Distributions. If applicable, amounts not vested at the time payments due under this Section cease will be distributed annually when vested.

EXHIBIT D

Section 14  Amendment and Termination of Plan. The Company may amend any provision of the Plan or terminate the Plan at any time; provided, that in no event shall such amendment or termination reduce the balance in any Participant's Deferred Compensation Account as of the date of such amendment or termination, nor shall any such amendment affect the terms of the Plan relating to the payment of such Deferred Compensation Account, nor shall any such amendment cause the Deferred Compensation  Accounts to violate the requirements of Section 409A of the Code. Notwithstanding the foregoing, the following special provisions shall apply.

13

EXHIBIT E

U.S. Xpress Enterprises, Inc. 4080 Jenkins Road Chattanooga, TN 37421	Tax ID: XX-XXXXXXX
U.S. Xpress, Inc. 4080 Jenkins Road Chattanooga, TN 37421	Tax ID: XX-XXXXXXX
U.S. Xpress Leasing, Inc. 4080 Jenkins Road Chattanooga, TN 37421	Tax ID: XX-XXXXXXX
Xpress Global Systems, Inc. 4080 Jenkins Road Chattanooga, TN 37421	Tax ID: XX-XXXXXXX
Arnold Transportation Services, Inc. 9523 Florida Mining Blvd. Jacksonville, FL 32257	Tax ID: XX-XXXXXXX
Total Transportation Investments, LLC 125 Riverview Drive Jackson, MS 39218	Tax ID: XX-XXXXXXX
Transportation Assets Leasing, Inc. 125 Riverview Drive Jackson, MS 39218	Tax ID: XX-XXXXXXX

14

Back to Form 10-Q

EX-31.1

Exhibit 31.1

I, Eric Fuller, certify that:

1. I have reviewed this quarterly report on Form 10-Q of U.S. Xpress Enterprises, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.          Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c.          Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  May 7, 2019	/s/ Eric Fuller
	Eric Fuller
	Chief Executive Officer

Back to Form 10-Q

EX-31.2

Exhibit 31.2

I, Eric Peterson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of U.S. Xpress Enterprises, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.          Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c.          Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  May 7, 2019	/s/ Eric Peterson
	Eric Peterson Chief Financial Officer

Back to Form 10-Q

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of U.S. Xpress Enterprises, Inc. (the "Company") on Form 10-Q for the period ending March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Eric Fuller, Chief Executive Officer of the Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify, that to the best of my knowledge:

(1)          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)          The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  May 7, 2019	/s/ Eric Fuller
	Eric Fuller
	Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to U.S. Xpress Enterprises, Inc. and will be retained by U.S. Xpress Enterprises, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Back to Form 10-Q

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of U.S. Xpress Enterprises, Inc. (the "Company") on Form 10-Q for the period ending March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Eric Peterson, Chief Financial Officer of the Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify, that to the best of my knowledge:

(1)          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)          The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:    May 7, 2019	/s/Eric Peterson
	Eric Peterson
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to U.S. Xpress Enterprises, Inc. and will be retained by U.S. Xpress Enterprises, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Back to Form 10-Q

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document Information [Line Items]
Entity Registrant Name	US XPRESS ENTERPRISES INC
Entity Central Index Key	0000923571
Trading Symbol	usx
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	false
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		15,616,551
Common Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		32,994,211

XML

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 2,095	$ 9,892
Customer receivables, net of allowance of $101 and $59 at March 31, 2019 and December 31, 2018, respectively	185,710	190,254
Other receivables	19,474	20,430
Prepaid insurance and licenses	15,793	11,035
Operating supplies	7,548	7,324
Assets held for sale	8,086	33,225
Other current assets	15,860	13,374
Total current assets	254,566	285,534
Property and equipment, at cost	904,209	898,530
Less accumulated depreciation and amortization	(385,281)	(379,813)
Net property and equipment	518,928	518,717
Other assets
Operating lease right of use assets	186,941
Goodwill	57,708	57,708
Intangible assets, net	28,492	28,913
Other	24,858	19,615
Total other assets	297,999	106,236
Total assets	1,071,493	910,487
Current liabilities
Accounts payable	63,368	63,808
Book overdraft	5,233
Accrued wages and benefits	23,588	24,960
Claims and insurance accruals, current	43,586	47,442
Other accrued liabilities	8,386	8,120
Liabilites associated with assets held for sale		6,856
Current portion of operating lease liabilities	56,893
Current maturities of long-term debt and finance leases	95,117	113,094
Total current liabilities	296,171	264,280
Long-term debt and finance leases, net of current maturities	314,049	312,819
Less debt issuance costs	(1,264)	(1,347)
Net long-term debt and finance leases	312,785	311,472
Deferred income taxes	21,385	19,978
Long-term liabilities associated with assets held for sale		8,353
Other long-term liabilities	6,483	7,713
Claims and insurance accruals, long-term	60,518	60,304
Noncurrent operating lease liabilities	129,927
Commitments and contingencies (Notes 6 and 7)
Stockholders' Equity
Additional paid-in capital	252,559	251,742
Accumulated deficit	(12,614)	(17,335)
Stockholders' equity	240,430	234,891
Noncontrolling interest	3,794	3,496
Total stockholders' equity	244,224	238,387
Total liabilities and stockholders' equity	1,071,493	910,487
Common Class A [Member]
Stockholders' Equity
Common stock	329	329
Common Class B [Member]
Stockholders' Equity
Common stock	$ 156	$ 155

XML

Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Allowance	$ 101	$ 59
Common Class A [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	140,000,000	140,000,000
Common stock, shares issued (in shares)	32,930,419	32,859,292
Common stock, shares outstanding (in shares)	32,930,419	32,859,292
Common Class B [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	35,000,000	35,000,000
Common stock, shares issued (in shares)	15,616,551	15,486,560
Common stock, shares outstanding (in shares)	15,616,551	15,486,560

XML

Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Revenue	$ 415,363	$ 425,708
Operating expenses
Salaries, wages, and benefits	124,563	132,924
Fuel and fuel taxes	46,904	58,389
Vehicle rents	18,976	20,022
Depreciation and amortization, net of (gain) loss on sale of property	23,062	24,706
Operating expenses and supplies	27,945	29,791
Insurance premiums and claims	24,353	20,170
Operating taxes and licenses	3,173	3,401
Communications and utilities	2,265	2,466
General and other operating expenses	17,479	17,209
Total operating expenses	402,725	410,854
Operating income	12,638	14,854
Other expense (income)
Interest expense, net	5,603	12,658
Equity in loss of affiliated companies	89	296
Other, net	26	(75)
	5,718	12,879
Income before income tax provision	6,920	1,975
Income tax provision	1,901	593
Net total and comprehensive income	5,019	1,382
Net total and comprehensive income attributable to noncontrolling interest	298	223
Net total and comprehensive income attributable to controlling interest	$ 4,721	$ 1,159
Earnings per share
Basic earnings per share (in dollars per share)	$ 0.10	$ 0.18
Basic weighted average shares outstanding (in shares)	48,394	6,385
Diluted earnings per share (in dollars per share)	$ 0.10	$ 0.18
Diluted weighted average shares outstanding (in shares)	49,391	6,385
Cargo and Freight [Member]
Revenues
Revenue	$ 375,312	$ 382,858
Fuel Surcharge [Member]
Revenues
Revenue	40,051	42,850
Shipping and Handling [Member]
Operating expenses
Purchased transportation	$ 114,005	$ 101,776

XML

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating activities
Net income	$ 5,019	$ 1,382
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax provision	1,407	190
Depreciation and amortization	21,833	23,901
Losses on sale of equipment	1,229	805
Share based compensation	856	208
Other	308	1,688
Changes in operating assets and liabilities:
Receivables	3,560	(10,706)
Prepaid insurance and licenses	(4,761)	(5,242)
Operating supplies	(285)	(936)
Other assets	383	(1,582)
Accounts payable and other accrued liabilities	(2,844)	(13,936)
Accrued wages and benefits	(1,226)	2,365
Net cash provided by (used in) operating activities	25,479	(1,863)
Investing activities
Payments for purchases of property and equipment	(36,604)	(26,871)
Proceeds from sales of property and equipment	13,115	8,176
Sale of subsidiary, net of cash	(9,002)
Net cash used in investing activities	(32,491)	(18,695)
Financing activities
Borrowings under lines of credit		102,676
Payments under lines of credit		(82,950)
Borrowings under long-term debt	14,355	23,438
Payments of long-term debt	(31,128)	(36,062)
Payments of financing costs and original issue discount		(14)
Payments of long-term consideration for business acquistion	(990)	(1,010)
Tax withholding related to net share settlement of restricted stock awards	(39)
Repurchase of membership units		(51)
Book overdraft	5,233	9,469
Net cash provided by (used in) financing activities	(12,569)	15,496
Change in cash previously included in assets held for sale	11,784
Net change in cash and cash equivalents	(7,797)	(5,062)
Cash and cash equivalents:
Beginning of year	9,892	9,232
End of period	2,095	4,170
Supplemental disclosure of cash flow information
Cash paid during the year for interest	5,620	11,249
Cash refunded during the year for income taxes	(91)	(330)
Supplemental disclosure of significant noncash investing and financing activities
Debt obligations relieved in conjunction with the divesture of Xpress Internacional	7,109
Uncollected proceeds from asset sales		1,706
Capital Lease Obligations [Member]
Supplemental disclosure of significant noncash investing and financing activities
Capital lease extinguishments	$ 33	$ 764

XML

Unaudited Condensed Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Common Stock [Member] Common Class A [Member]	Common Stock [Member] Common Class B [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	Redeemable Restricted Units [Member]	Total
Balance at Dec. 31, 2017	$ 64		$ 1	$ (43,459)	$ 2,289	$ 3,281	$ (41,105)
Share based compensation						208
Adoption of ASC 606 | Accounting Standards Update 2014-09 [Member]				1,459			1,459
Dividend of repurchased membership units						(51)
Net income				1,159	223		1,382
Balance at Mar. 31, 2018	64		1	(40,841)	2,512	$ 3,438	(38,264)
Balance at Dec. 31, 2018	329	$ 155	251,742	(17,335)	3,496		238,387
Share based compensation			856				856
Net income				4,721	298		5,019
Vesting of 201,119 restricted units		1	(39)				(38)
Balance at Mar. 31, 2019	$ 329	$ 156	$ 252,559	$ (12,614)	$ 3,794		$ 244,224

XML

Unaudited Condensed Consolidated Statement of Stockholders' Equity (Deficit) (Parentheticals) shares in Thousands	3 Months Ended
	Mar. 31, 2019 shares
Vesting restricted units (in shares)	201,119

XML

Note 1 - Organization and Operations

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.

        

Organization and Operations

U.S. Xpress Enterprises, Inc. and its consolidated subsidiaries (collectively, the “Company”, “we”, “us”, “our”, and similar expressions) provide transportation services throughout the United States and Mexico, with a focus in the densely populated and economically diverse eastern half of the United States. The Company offers its customers a broad portfolio of services using its own asset-based truckload fleet and

third

-party carriers through our non-asset-based truck brokerage network. The Company has

two

 reportable segments, Truckload and Brokerage. Our Truckload segment offers asset-based truckload services, including over-the-road (“OTR”) trucking and dedicated contract services. Our Brokerage segment is principally engaged in non-asset-based freight brokerage services, where loads are contracted to

third

-party carriers.

U.S. Xpress Enterprises, Inc. completed its initial public offering in

June 2018 (

the “IPO” or the “offering”). Prior to the offering U.S. Xpress Enterprises, Inc. was wholly owned by New Mountain Lake Holdings, LLC (“New Mountain Lake”). New Mountain Lake was formed on

October 12, 2007

solely for the purpose of taking U.S. Xpress Enterprises, Inc. private and holding

100%

ownership of U.S. Xpress Enterprises, Inc. Immediately prior to the effectiveness of the offering, we completed a series of transactions (collectively, the “Reorganization”) pursuant to which New Mountain Lake merged with and into the Company, with the Company continuing as the surviving corporation.

In connection with the Reorganization, we adopted the Second Amended and Restated Certificate of Incorporation of the Company, and converted into and exchanged the issued and outstanding membership units of New Mountain Lake immediately prior to the Reorganization for the Company’s common stock. We provided for the issuance of

4.6666667

shares of Class A common stock for each Class B non-voting membership unit in New Mountain Lake and

4.6666667

shares of Class B common stock for each Class A voting membership unit in New Mountain Lake. The holders of Class A common stock are entitled to

one

vote per share and the holders of Class B common stock are entitled to

five

votes per share. In the offering, the Company sold

16,668,000

shares of Class A common stock at a price of

$16

per share to the public and received net proceeds of

$246.6

million, after deducting underwriting discounts and commissions and offering expenses.

Under our Articles of Incorporation, our authorized capital stock consists of

140,000,000

shares of Class A common stock, par value

$0.01

per share,

35,000,000

shares of Class B common stock, par value

$0.01

per share, and

9,333,333

shares of preferred stock, the rights and preferences of which

may

be designated by the Board of Directors.

XML

Note 2 - Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2.

         Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries. All significant intercompany transactions and accounts have been eliminated.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with Article

10

of Regulation S-

X

promulgated under the Securities Act of

1933,

as amended. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. In the opinion of management, the accompanying financial statements include all adjustments that are necessary for a fair statement of the results of the interim periods presented, such adjustments being of a normal recurring nature.

Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. The

December 31, 2018

balance sheet was derived from our audited balance sheet as of that date. The Company’s operating results are subject to seasonal trends when measured on a quarterly basis; therefore operating results for the

three

months ended

March 31, 2019

are

not

necessarily indicative of the results that

may

be expected for the year ending

December 31, 2019.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto for the year ended

December 31, 2018.

Leases

We determine if an arrangement is a lease or contains a lease at inception and perform an analysis to determine whether the lease is an operating lease or a finance lease. We measure right-of-use (“ROU”) assets and lease liabilities at the lease commencement date based on the present value of the remaining lease payments. As most of our leases do

not

provide a readily determinable implicit rate, we estimate an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar collateralized borrowings. We use this rate to discount the remaining lease payments in measuring the ROU asset and lease liability. We use the implicit rate when readily determinable. We recognize lease expense for operating leases on a straight-line basis over the lease term. For our finance leases, we recognize amortization expense from the amortization of the ROU asset and interest expense on the related lease liability. We do

not

separate lease and nonlease components of contracts, except for certain leased information technology assets that are embedded within various service agreements. The lease components included in those agreements are included in the ROU asset and lease liability, and the amounts are

not

significant.

Leases with an initial term of

twelve

months or less are

not

recorded on the condensed consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.

Recently Issued Accounting Standards

In

January 2017,

the FASB issued Accounting Standards Update (“ASU”)

2017

-

04,

“Intangibles—Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment,” which eliminates Step

2

from the goodwill impairment testing process. Step

2

measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Under the new standard, a goodwill impairment loss is measured as the excess of the carrying value of a reporting unit over its fair value. The provisions of this update are effective for fiscal years beginning after

December 15, 2019.

The Company has evaluated the provisions of the pronouncement and does

not

expect the adoption of ASU

2018

-

02

will have a material impact on the consolidated financial statements.

Recently Adopted Accounting Standards

In

February 2016,

the FASB issued ASU

2016

-

02,

“Leases (Topic

842

),” and has subsequently issued supplemental and/or clarifying ASUs (collectively “ASC

842”

), in order to increase transparency and comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. We adopted ASC 

842

using the modified retrospective approach and applied the transition provisions with an effective date as of

January 1, 2019

for leases that existed on that date. Prior period results continue to be presented under ASC

840

based on the accounting originally in effect for such periods. We elected the “package of practical expedients” under ASC

842

which permits us to

not

reassess our historical assessments of (

1

) whether contracts are or contain leases, (

2

) lease classification and (

3

) initial direct costs. We also elected the practical expedient to

not

reassess certain land easements. We did

not

elect the use-of-hindsight practical expedient during the transition of ASC

842.

Adoption of ASC

842

resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities of approximately

$183.0

million. The adoption of ASC

842

also resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing, and uncertainty of cash flows arising from leases. See the “Leases” section of this note and Note

6,

Leases

for additional information.

XML

Note 3 - Divesture of Xpress Internacional

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

3.

       

Divesture of Xpress Internacional

In

January 2019,

we sold our

95%

interest in Xpress Internacional. The purchase price was approximately

$4.5

million in cash, a

$6.0

million note receivable and approximately

$2.5

million in contingent consideration related to the completion of selling

110

tractors. The fair value of the tractors approximated

$2.5

million on

January 17, 2019

and has

not

changed as of

March 31, 2019.

The business met the criteria for the presentation as held for sale as of

December 31, 2018.

The assets of business held for sale were

not

material to our consolidated revenues or consolidated operating income. We recognized an impairment in the amount of

$10.7

million in

December 2018,

related to the disposal group as the carrying value exceeded the fair value. We did

not

recognize any subsequent gain or loss during the quarter ended

March 31, 2019.

XML

Note 4 - Income Taxes

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

4.

        Income Taxes

The Company’s provision for income taxes for the

three

months ended

March 31, 2019

and

2018

is based on the estimated annual effective tax rate, plus discrete items. The following table presents the provision for income taxes and the effective tax rates for the

three

months ended

March 31, 2019

and

2018

(in thousands):

	Three Months Ended
	March 31,
	2019			2018
Income before Income Taxes	$	6,920		$	1,975
Income tax provision		1,901			593
Effective tax rate		27.5	%		30.0	%

The difference between the Company’s effective tax rate for the

three

months ended

March 31, 2019

and

2018

and the US statutory rate of

21%

primarily relates to nondeductible expenses, federal income tax credits, state income taxes (net of federal benefit), Global Intangible Low-Taxed Income earned by certain foreign subsidiaries, the effect of taxes on foreign earnings and certain other immaterial discrete items.

XML

Note 5 - Long-term Debt

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

5.

         Long-Term Debt

Long-term debt at

March 31, 2019

and

December 31, 2018

consists of the following (in thousands):

	March 31, 2019			December 31, 2018
Term loan agreement, interest rate of 4.7% and 4.8% at March 31, 2019 and December 31, 2018, respectively maturing June 2023	$	192,500		$	195,000
Revenue equipment installment notes with finance companies, weighted average interest rate of 5.0% and 5.0% at March 31, 2019 and December 31, 2018, due in monthly installments with final maturities at various dates through February 2026, secured by related revenue equipment with a net book value of $188.3 million and $197.1 million in March 2019 and December 2018		176,954			184,867
Mortgage note payables, interest rates ranging from 5.25% to 6.99% at March 31, 2019 and December 31, 2018 due in monthly installments with final maturities as various dates through September 2031, secured by real estate with a net book value of $23.8 million and $24.1 million at March 2019 and December 2018		18,574			18,861
Other		4,081			6,872
		392,109			405,600
Less: Debt issuance costs		(1,264	)		(1,347	)
Less: Current maturities of long-term debt		(86,492	)		(106,383	)
	$	304,353		$	297,870

New Credit Facility

In

June 2018,

we entered into a new credit facility (the “Credit Facility”) that contains a

$150.0

million revolving component (the “Revolving Facility”) and a

$200.0

million term loan component (the “Term Facility”). The Credit Facility contains an accordion feature that, so long as

no

event of default exists, allows us to request an increase in the borrowing amounts under the Revolving Facility or the Term Facility by a combined maximum amount of

$75.0

million. Borrowings under the Credit Facility are classified as either “base rate loans” or “Eurodollar rate loans.” Base rate loans accrue interest at a base rate equal to the agent’s prime rate plus an applicable margin that was set at

1.25%

through

September 30, 2018

and adjusted quarterly thereafter between

0.75%

and

1.50%

based on our consolidated net leverage ratio. Eurodollar rate loans will accrue interest at London Interbank Offered Rate, or a comparable or successor rate approved by the administrative agent, plus an applicable margin that was set at

2.25%

through

September 30, 2018

and adjusted quarterly thereafter between

1.75%

and

2.50%

based on our consolidated net leverage ratio. The Credit Facility requires payment of a commitment fee on the unused portion of the Revolving Facility commitment of between

0.25%

and

0.35%

based on our consolidated net leverage ratio. In addition, the Revolving Facility includes, within its

$150.0

million revolving credit facility, a letter of credit sub facility in an aggregate amount of

$75.0

million and a swingline sub facility in an aggregate amount of

$15.0

million. The Term Facility has scheduled quarterly principal payments between

1.25%

and

2.50%

of the original face amount of the Term Facility plus any additional amount borrowed pursuant to the accordion feature of the Term Facility, with the

first

such payment occurring on the last day of our fiscal quarter ending

September 30, 2018.

The Credit Facility will mature on

June 18, 2023.

Borrowings under the Credit Facility are prepayable at any time without premium and are subject to mandatory prepayment from the net proceeds of certain asset sales and other borrowings. The Credit Facility is secured by a pledge of substantially all of our assets, excluding, among other things, certain real estate and revenue equipment financed outside the Credit Facility.

The Credit Facility contains restrictive covenants including, among other things, restrictions on our ability to incur additional indebtedness or issue guarantees, to create liens on our assets, to make distributions on or redeem equity interests, to make investments, to transfer or sell properties or other assets and to engage in mergers, consolidations, or acquisitions. In addition, the Credit Facility requires us to meet specified financial ratios and tests, including a maximum leverage ratio and a minimum interest coverage ratio.

At

March 31, 2019,

the Revolving Facility had issued collateralized letters of credit in the face amount of

$31.7

million, with

$0

borrowings outstanding and

$118.3

million available to borrow and the Term Facility had

$192.5

million outstanding.

The Credit Facility includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts payable under the Credit Facility

may

be accelerated, and the Lenders’ commitments

may

be terminated. At

March 31, 2019,

the Company was in compliance with all financial covenants prescribed by the Credit Facility.

XML

Note 6 - Leases

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Leases of Lessee Disclosure [Text Block]

6.

         Leases

We have operating and finance leases with terms of

1

year to

10

years for certain revenue and service equipment and office and terminal facilities.

The table below presents the lease-related assets and liabilities recorded on the balance sheet (in thousands):

Leases	Classification	March 31, 2019
Assets
Operating	Operating lease right-of-use assets	$	186,941
Finance	Property and equipment, net		19,921
Total leased assets		$	206,862
Liabilities
Current
Operating	Current portion of operating lease liabilities	$	56,893
Finance	Current maturities of long-term debt and finance leases		8,625
Noncurrent
Operating	Noncurrent operating lease liabilities		129,927
Finance	Long-term debt and finance leases, net of current maturities		8,432
Total lease liabilities		$	203,877

The table below presents certain information related to the lease costs for finance and operating leases (in thousands):

Lease Cost	Classification	March 31, 2019
Operating lease cost	Vehicle rents and General and other operating	$	20,167
Finance lease cost:
Amortization of finance lease assets	Depreciation and amortization		808
Interest on lease liabilities	Interest expense		318
Short-term lease cost	General and other operating		311
Total lease cost		$	21,604

Cash Flow Information	Three Months Ended March 31, 2019
Cash paid for operating leases included in operating activities	$	20,167
Cash paid for finance leases included in operating activities	$	318
Cash paid for finance leases included in financing activities	$	3,155
Operating lease right-of-use assets obtained in exchange for lease obligations	$	23,975
Operating lease right-of-use assets and liabilities relieved in conjunction with divesture of Xpress Internacional	$	2,018

Lease Term and Discount Rate	Weighted-Average Remaining Lease Term (years)		Weighted-Average Discount Rate
Operating leases		4.1		5.2	%
Finance leases		3.4		5.3	%

As of

March 31, 2019,

future maturities of lease liabilities were as follows (in thousands):

	March 31, 2019
	Finance			Operating
2019	$	4,236		$	49,948
2020		7,544			52,785
2021		4,084			41,805
2022		1,427			27,115
2023		1,427			18,794
Thereafter		297			17,842
		19,015			208,289
Less: Amount representing interest		(1,958	)		(21,469	)
Total	$	17,057		$	186,820

As of

December 31, 2018,

minimum lease payments under capital and operating leases were as follows (in thousands):

	December 31, 2018
	Capital			Operating
2019	$	7,797		$	60,303
2020		7,564			42,632
2021		4,086			35,302
2022		1,427			20,751
2023		1,427			15,884
Thereafter		297			14,080
		22,598		$	188,952
Less: Amount representing interest		(2,285	)
		20,313
Less: Current portion		(6,711	)
	$	13,602

XML

Note 7 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

7.

        

Commitments and Contingencies

The Company is party to certain legal proceedings incidental to its business. The ultimate disposition of these matters, in the opinion of management, based in part on the advice of legal counsel, is

not

expected to have a materially adverse effect on the Company’s financial position or results of operations.

For the cases described below, management is unable to provide a meaningful estimate of the possible loss or range of loss because, among other reasons, (

1

) the proceedings are in various stages; (

2

) damages have

not

been sought; (

3

) damages are unsupported and/or exaggerated; (

4

) there is uncertainty as to the outcome of the proceedings, including pending appeals; and/or (

5

) there are significant factual issues to be resolved. For these cases, however, management does

not

believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on our financial condition, though the outcomes could be material to our operating results for any particular period, depending, in part, upon the operating results for such period.

California Wage and Hour Class Action Litigation

On

December 

23,

2015,

a class action lawsuit was filed against us and our subsidiary U.S. Xpress, Inc. in the Superior Court of California, County of San Bernardino. The case was transferred to the U.S. District Court for the Central District of California. The putative class includes current and former truck drivers employed by us who worked or work in California after the completion of their training while residing in California since

December 23, 2011

to present. The case alleges that class members were

not

paid for off-the-clock work, were

not

provided duty free meal or break times, and were

not

paid premium pay in their absence, were

not

paid minimum wage for all hours worked, were

not

provided accurate and complete time and pay records and were

not

paid all accrued wages at the end of their employment, all in violation of California law. The class seeks a judgment for compensatory damages and penalties, injunctive relief, attorney fees and costs and pre- and post-judgment interest. The matter is currently in discovery, and a jury trial has been requested. There is currently

no

trial date set. We are currently

not

able to predict the probable outcome or to reasonably estimate a range of potential losses, if any. We intend to vigorously defend the merits of these claims.

Telephone Consumer Protection Act Claim

A class action was filed against our subsidiary U.S. Xpress, Inc. in the U.S. District Court for the Western District of Virginia on

December 11, 2017

and amended on

March 7, 2018,

alleging violations of the Telephone Consumer Protection Act, for

two

separate proposed classes. The putative classes include all persons within the United States to whom the Company either initiated a telephone call to a cellular telephone number using an automatic telephone dialing system or initiated a call to a residential telephone number using an artificial or pre-recorded voice at any time from

December 11, 2013

to present. The lawsuit seeks statutory damages for each violation, injunctive relief and attorneys’ fees and costs. The Company successfully moved to dismiss the claims related to calls made to residential lines on grounds that the plaintiff lacked standing to assert such claims. The Court denied the Company’s Motion to Dismiss claims for all purported class members residing outside the State of Virginia for lack of personal jurisdiction. The matter is currently in discovery and is set for trial beginning

January 13, 2020.

We are currently

not

able to predict the probable outcome or to reasonably estimate a range of potential losses, if any. We intend to vigorously defend the merits of these claims.

Stockholder Claims

As set forth below, between

November 2018

and

April 2019,

eight

substantially similar putative securities class action complaints were filed against us and certain other defendants:

five

in the Circuit Court of Hamilton County, Tennessee (“Tennessee State Court Cases”),

two

in the U.S. District Court for the Eastern District of Tennessee (“Federal Court Cases”), and

one

in the Supreme Court of the State of New York (“New York State Court Case”). Two of the Tennessee State Court Cases have been voluntarily dismissed. All of these matters are in preliminary stages of litigation. We are currently

not

able to predict the probable outcome or to reasonably estimate a range of potential losses, if any.

On

November 21, 2018,

a putative class action complaint was filed in the Circuit Court of Hamilton County, Tennessee against us,

five

of our officers or directors, and the

seven

underwriters who participated in our

June 2018

initial public offering (“IPO”), alleging violations of Sections

11

and

15

of the Securities Act of

1933

(the “Securities Act”). The class action lawsuit is based on allegations that the Company made false and/or misleading statements in the registration statement and prospectus filed with the Securities and Exchange Commission (“SEC”) in connection with the IPO. The lawsuit is purportedly brought on behalf of a putative class of all persons or entities who purchased or otherwise acquired the Company’s Class A common stock pursuant and/or traceable to the IPO, and seeks, among other things, compensatory damages, costs and expenses (including attorneys’ fees) on behalf of the putative class.

On

January 23, 2019,

a substantially similar putative class action complaint was filed in the Circuit Court of Hamilton County, Tennessee, by a different plaintiff alleging claims under Sections

11

and

15

of the Securities Act against the same defendants as in the action commenced on

November 21, 2018.

On

March 7, 2019,

this case was voluntarily dismissed by the plaintiff.

On

January 30, 2019,

a substantially similar putative class action complaint was filed in the Circuit Court of Hamilton County, Tennessee, by a different plaintiff alleging claims under Sections

11

and

15

of the Securities Act against the same defendants as in the action commenced on

November 21, 2018,

and also alleging a claim under Section

12

of the Securities Act.

On

February 5, 2019,

a substantially similar putative class action complaint was filed in the Circuit Court of Hamilton County, Tennessee, by a different plaintiff alleging claims under Sections

11

and

15

of the Securities Act against the same defendants as in the action commenced on

November 21, 2018,

and also alleging a claim under Section

12

of the Securities Act.

On

February 6, 2019,

a substantially similar putative class action complaint was filed in the Circuit Court of Hamilton County, Tennessee, by different plaintiffs alleging claims under Sections

11

and

15

of the Securities Act against the same defendants as in the action commenced on

November 21, 2018.

On

March 17, 2019,

this case was voluntarily dismissed by the plaintiff.

On

March 8, 2019,

a substantially similar putative class action complaint was filed in the U.S. District Court for the Eastern District of Tennessee by a different plaintiff alleging claims under Sections

11

and

15

of the Securities Act against the same defendants as in the action commenced on

November 21, 2018.   

On

March 14, 2019,

a substantially similar putative class action complaint was filed in the Supreme Court of the State of New York, County of New York, by a different plaintiff alleging claims under Sections

11

and

15

of the Securities Act against the same defendants as in the action commenced on

November 21, 2018.   

On

April 2, 2019,

a substantially similar putative class action complaint was filed in the U.S. District Court for the Eastern District of Tennessee, by a different plaintiff alleging claims under Sections

11

and

15

of the Securities Act against us and the same

five

of our officers and directors as in the action commenced on

November 21, 2018.   

Unlike the previously filed complaints, this complaint did

not

name as defendants any of the

seven

underwriters who participated in our IPO.

The complaints in all the actions listed above allege that the Company made false and/or misleading statements in the registration statement and prospectus filed with the SEC in connection with the IPO, and that, as a result of such alleged statements, the plaintiffs and the members of the putative classes suffered damages. We believe the allegations made in the complaints are without merit and intend to defend ourselves vigorously in these matters.

Independent Contractor Class Action

On

March 26, 2019,

a putative class action complaint was filed in the U.S. District Court for the Eastern District of Tennessee against us and our subsidiaries U.S. Xpress, Inc. and U.S. Xpress Leasing, Inc. The putative class includes individuals who performed work as lease operators, who leased equipment from us, and who were designated as independent contractors. The complaint alleges that independent contractors are improperly designated as such and should be designated as employees and thus subject to the Fair Labor Standards Act (“FLSA”). The complaint further alleges that U.S. Xpress, Inc.’s pay practices with regard to the putative class members violated the minimum wage provisions of the FLSA for the period from

March 26, 2016

to present. The complaint further alleges that we violated the requirements of the Truth in Leasing Act with regard to the independent contractor agreements and lease purchase agreements we entered into with the putative class members. The complaint further alleges that we failed to comply with the terms of the independent contractor agreements and lease purchase agreements entered into with the putative class members, that we violated the provisions of the Tennessee Consumer Protection Act in advertising, describing and marketing the lease purchase program to the putative class members, and that we were unjustly enriched as a result of the foregoing allegations. The matter is

not

yet in discovery, and we are currently

not

able to predict the probable outcome or to reasonably estimate a range of potential losses, if any. We believe the allegations made in the complaint are without merit and intend to defend ourselves vigorously against the complaints relating to such actions.

The Company had letters of credit of

$31.7

million outstanding as of

March 31, 2019.

The letters of credit are maintained primarily to support the Company’s insurance program.

The Company had cancelable commitments outstanding at

March 31, 2019

to acquire revenue equipment and real estate for approximately

$201.4

million during the remainder of

2019.

These purchase commitments are expected to be financed by long-term debt, operating leases, proceeds from sales of existing equipment, and cash flows from operations.

XML

Note 8 - Share-based Compensation

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

8.

        

Share-based Compensation

2018

Omnibus Incentive Plan

In

June 2018,

the Board approved the

2018

Omnibus Incentive Plan (the “Incentive Plan”) to become effective in connection with the offering. The Company has reserved an aggregate of

3.2

million shares of its Class A common stock for issuance of awards under the Incentive Plan. Participants in the Incentive Plan will be selected by the Compensation Committee from the executive officers, directors, employees and consultants of the Company. Awards under the Incentive Plan

may

be made in the form of stock options, stock appreciation rights, stock awards, restricted stock units, performance awards, performance units, and any other form established by the Compensation Committee pursuant to the Incentive Plan.

The following is a summary of the Incentive Plan restricted stock and restricted stock unit activity for the

three

months ended

March 31, 2019:

			Weighted
	Number of		Average Grant
	Units		Date Fair Value
Unvested at December 31, 2018		270,742	$	14.20
Granted		461,775		8.94
Vested		31,845		15.77
Forfeited		5,500		16.00
Unvested at March 31, 2019		695,172	$	10.62

The restricted stock grants vest over periods of

one

to

five

years. The Company recognized compensation expense of

$0.6

million during the

three

months ended

March 31, 2019.

At

March 31, 2019

and

December 31, 2018,

the Company had

$6.3

million and

$2.8

million in unrecognized compensation expense related to the above restricted stock awards which is expected to be recognized over a period of approximately

3.4

years and

3.3

years, respectively.

The following is a summary of the Incentive Plan stock option activity from

December 31, 2018

to

March 31, 2019:

			Weighted
	Number of		Average Grant
	Units		Date Fair Value
Unvested at December 31, 2018		177,260	$	6.09
Granted		244,785		4.41
Unvested at March 31, 2019		422,045	$	5.12

The stock options vest over a period of

four

years and expire

ten

years from the date of grant. The Company recognized compensation expense of

$0.1

million for the

three

months ended

March 31, 2019.

The fair value of the stock option grant was estimated using the Black-Scholes method as of the grant date using the following assumptions:

Strike price	$	9.40
Risk-free interest rate		2.50	%
Expected dividend yield		0	%
Expected volatility		45.65	%
Expected term (in years)		6.25

At

March 31, 2019

and

December 31, 2018,

the Company had

$1.7

million and

$0.8

million in unrecognized compensation expense related to the stock option awards which is expected to be recognized over a period of approximately

3.0

years and

3.5

years.

Restricted Stock Units

Prior to the IPO, the Company provided for restricted membership unit awards in New Mountain Lake under the

2008

Restricted Stock Plan in order to compensate the Company’s employees and to promote the success of the Company’s business.

As part of the Reorganization (see Note

1

), all of the redeemable restricted units of New Mountain Lake were converted into restricted stock units of the Company, with the same vesting schedules. The following is a summary of the Company’s restricted stock unit activity for the

three

months ended

March 31, 2019:

	Number of		Weighted
	Units		Average
Unvested at December 31, 2018		1,401,674	$	2.00
Vested		173,320		2.15
Unvested at March 31, 2019		1,228,354	$	1.98

The vesting schedule for these restricted unit grants range from

3

to

7

years. The Company recognized compensation expense of

$0.2

million and

$0.2

million during the

three

months ended

March 31, 2019

and

2018,

respectively. At

March 31, 2019

and

December 31, 2018,

the Company had approximately

$2.0

million and

$2.2

million in unrecognized compensation expense related to restricted units, which is expected to be recognized over a period of approximately

3.7

and

4.1

years, respectively. The fair value of the restricted units and corresponding compensation expense was determined using the income approach.

XML

Note 9 - Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

9.

        

Fair Value Measurements

Accounting standards, among other things, define fair value, establish a framework for measuring fair value and expand disclosure about such fair value measurements. Assets and liabilities measured at fair value are based on

one

or more of

three

valuation techniques provided for in the standard.

The standards clarify that fair value is an exit price, representing the amount that would be received to sell an asset, based on the highest and best use of the asset, or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for evaluating such assumptions, the standards establish a

three

-tier fair value hierarchy, which prioritizes the inputs in measuring fair value as follows:

Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).

Level 3 Unobservable inputs, only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.

The following table summarizes liabilities measured at fair value at

March 31, 2019

and

December 

31,

2018

(in thousands):

	2019
	Fair Value		Input Level
Liabilities
Forward Contract	$	-		3

	2018
	Fair Value		Input Level
Liabilities
Forward Contract	$	1,793		3

The following table summarizes the changes in the fair value of assets and liabilities measured at fair value using significant unobservable inputs (Level

3

) for the

three

months ended

March 31, 2019

and

2018

(in thousands):

	Three Months Ended
	March 31,
	2019		2018
Balance at beginning of year	$	1,793	$	1,985
Divesture of Xpress Internacional		1,793		-
Forward Contract Adjustment		-		(48	)
Balance at end of period	$	-	$	1,937

At

December 31, 2018,

the physically settled forward contract was reclassified to long term liabilities associated with assets held for sale and in

January 2019

relieved in conjunction with the disposal of Xpress Internacional.

XML

Note 10 - Earnings Per Share

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

10.

      

Earnings per Share

Basic earnings per share is calculated by dividing net income attributable to common stockholders by the weighted average shares of common stock outstanding during the period, without consideration for common stock equivalents. Prior to the offering, there were

no

common stock equivalents which could have had a dilutive effect on earnings per share. The Company excluded

989,717

equity awards for the

three

months ended

March 31, 2019

as inclusion would be anti-dilutive.

The basic and diluted earnings per share calculations for the

three

months ended

March 

31,

2019

and

2018,

respectively, are presented below (in thousands, except per share amounts):

	Three Months Ended
	March 31,
	2019		2018
Net income	$	5,019	$	1,382
Net income attributable to noncontrolling interest		298		223
Net income attributable to common stockholders	$	4,721	$	1,159
Basic weighted average of outstanding shares of common stock		48,394		6,385
Dilutive effect of equity awards		997		-
Diluted weighted average of outstanding shares of common stock		49,391		6,385
Basic earnings per share	$	0.10	$	0.18
Diluted earnings per share	$	0.10	$	0.18

XML

Note 11 - Segment Information

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

11.

      

Segment Information

The Company’s business is organized into

two

reportable segments, Truckload and Brokerage. The Truckload segment offers asset-based truckload services, including OTR trucking and dedicated contract services. These services are aggregated because they have similar economic characteristics and meet the aggregation criteria described in the accounting guidance for segment reporting. The Company’s OTR service offering provides solo and expedited team services through

one

-way movements of freight over routes throughout the United States and, prior to the divesture of Xpress Internacional, cross-border into and out of Mexico. The Company’s dedicated contract service offering devotes the use of equipment to specific customers and provides services through long-term contracts. The Company’s dedicated contract service offering provides similar freight transportation services, but does so pursuant to agreements where it makes equipment, drivers and on-site personnel available to a specific customer to address needs for committed capacity and service levels. During the

three

months ended

March 31, 2019,

the Truckload segment accounted for approximately

89%

of consolidated revenue.

The Company’s Brokerage segment is principally engaged in non-asset-based freight brokerage services, where it outsources the transportation of loads to

third

-party carriers. For this segment, the Company relies on brokerage employees to procure

third

-party carriers, as well as information systems to match loads and carriers. During the

three

months ended

March 31, 2019,

the Brokerage segment accounted for approximately

11%

of consolidated revenue.

The following table summarizes our segment information (in thousands):

	Three Months Ended
	March 31,
	2019		2018
Revenues
Truckload	$	369,119	$	371,167
Brokerage		46,244		54,541
Total Operating Revenue	$	415,363	$	425,708
Operating Income
Truckload	$	9,842	$	12,503
Brokerage		2,796		2,351
Total Operating Income	$	12,638	$	14,854

A measure of assets is

not

applicable, as segment assets are

not

regularly reviewed by the Chief Operating Decision Maker for evaluating performance or allocating resources.

Information about the geographic areas in which the Company conducted business during the

three

months ended

March 31, 2019

and

2018

is summarized below (in thousands). Operating revenues for foreign countries include revenues for (i) shipments with an origin or destination in that country and (ii) other services provided in that country. If both the origin and destination are in a foreign country, the revenues are attributed to the country of origin. In

January 2019,

we disposed of our Mexican business.

	Three Months Ended
	March 31,
	2019		2018
Revenues
United States	$	412,991	$	412,852
Foreign countries
Mexico		2,372		12,856
Total	$	415,363	$	425,708

XML

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries. All significant intercompany transactions and accounts have been eliminated.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with Article

10

of Regulation S-

X

promulgated under the Securities Act of

1933,

as amended. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. In the opinion of management, the accompanying financial statements include all adjustments that are necessary for a fair statement of the results of the interim periods presented, such adjustments being of a normal recurring nature.

Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. The

December 31, 2018

balance sheet was derived from our audited balance sheet as of that date. The Company’s operating results are subject to seasonal trends when measured on a quarterly basis; therefore operating results for the

three

months ended

March 31, 2019

are

not

necessarily indicative of the results that

may

be expected for the year ending

December 31, 2019.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto for the year ended

December 31, 2018.

Lessee, Leases [Policy Text Block]

Leases

We determine if an arrangement is a lease or contains a lease at inception and perform an analysis to determine whether the lease is an operating lease or a finance lease. We measure right-of-use (“ROU”) assets and lease liabilities at the lease commencement date based on the present value of the remaining lease payments. As most of our leases do

not

provide a readily determinable implicit rate, we estimate an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar collateralized borrowings. We use this rate to discount the remaining lease payments in measuring the ROU asset and lease liability. We use the implicit rate when readily determinable. We recognize lease expense for operating leases on a straight-line basis over the lease term. For our finance leases, we recognize amortization expense from the amortization of the ROU asset and interest expense on the related lease liability. We do

not

separate lease and nonlease components of contracts, except for certain leased information technology assets that are embedded within various service agreements. The lease components included in those agreements are included in the ROU asset and lease liability, and the amounts are

not

significant.

Leases with an initial term of

twelve

months or less are

not

recorded on the condensed consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Standards

In

January 2017,

the FASB issued Accounting Standards Update (“ASU”)

2017

-

04,

“Intangibles—Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment,” which eliminates Step

2

from the goodwill impairment testing process. Step

2

measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Under the new standard, a goodwill impairment loss is measured as the excess of the carrying value of a reporting unit over its fair value. The provisions of this update are effective for fiscal years beginning after

December 15, 2019.

The Company has evaluated the provisions of the pronouncement and does

not

expect the adoption of ASU

2018

-

02

will have a material impact on the consolidated financial statements.

Recently Adopted Accounting Standards

In

February 2016,

the FASB issued ASU

2016

-

02,

“Leases (Topic

842

),” and has subsequently issued supplemental and/or clarifying ASUs (collectively “ASC

842”

), in order to increase transparency and comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. We adopted ASC 

842

using the modified retrospective approach and applied the transition provisions with an effective date as of

January 1, 2019

for leases that existed on that date. Prior period results continue to be presented under ASC

840

based on the accounting originally in effect for such periods. We elected the “package of practical expedients” under ASC

842

which permits us to

not

reassess our historical assessments of (

1

) whether contracts are or contain leases, (

2

) lease classification and (

3

) initial direct costs. We also elected the practical expedient to

not

reassess certain land easements. We did

not

elect the use-of-hindsight practical expedient during the transition of ASC

842.

Adoption of ASC

842

resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities of approximately

$183.0

million. The adoption of ASC

842

also resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing, and uncertainty of cash flows arising from leases. See the “Leases” section of this note and Note

6,

Leases

for additional information.

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Note 4 - Income Taxes (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Three Months Ended
	March 31,
	2019			2018
Income before Income Taxes	$	6,920		$	1,975
Income tax provision		1,901			593
Effective tax rate		27.5	%		30.0	%

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Note 5 - Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	March 31, 2019			December 31, 2018
Term loan agreement, interest rate of 4.7% and 4.8% at March 31, 2019 and December 31, 2018, respectively maturing June 2023	$	192,500		$	195,000
Revenue equipment installment notes with finance companies, weighted average interest rate of 5.0% and 5.0% at March 31, 2019 and December 31, 2018, due in monthly installments with final maturities at various dates through February 2026, secured by related revenue equipment with a net book value of $188.3 million and $197.1 million in March 2019 and December 2018		176,954			184,867
Mortgage note payables, interest rates ranging from 5.25% to 6.99% at March 31, 2019 and December 31, 2018 due in monthly installments with final maturities as various dates through September 2031, secured by real estate with a net book value of $23.8 million and $24.1 million at March 2019 and December 2018		18,574			18,861
Other		4,081			6,872
		392,109			405,600
Less: Debt issuance costs		(1,264	)		(1,347	)
Less: Current maturities of long-term debt		(86,492	)		(106,383	)
	$	304,353		$	297,870

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Note 6 - Leases (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Components of Lease Assets and Liabilities [Table Text Block]

Leases	Classification	March 31, 2019
Assets
Operating	Operating lease right-of-use assets	$	186,941
Finance	Property and equipment, net		19,921
Total leased assets		$	206,862
Liabilities
Current
Operating	Current portion of operating lease liabilities	$	56,893
Finance	Current maturities of long-term debt and finance leases		8,625
Noncurrent
Operating	Noncurrent operating lease liabilities		129,927
Finance	Long-term debt and finance leases, net of current maturities		8,432
Total lease liabilities		$	203,877

Lease, Cost [Table Text Block]

Lease Cost	Classification	March 31, 2019
Operating lease cost	Vehicle rents and General and other operating	$	20,167
Finance lease cost:
Amortization of finance lease assets	Depreciation and amortization		808
Interest on lease liabilities	Interest expense		318
Short-term lease cost	General and other operating		311
Total lease cost		$	21,604

Schedule of Leases Cash Flow Information [Table Text Block]

Cash Flow Information	Three Months Ended March 31, 2019
Cash paid for operating leases included in operating activities	$	20,167
Cash paid for finance leases included in operating activities	$	318
Cash paid for finance leases included in financing activities	$	3,155
Operating lease right-of-use assets obtained in exchange for lease obligations	$	23,975
Operating lease right-of-use assets and liabilities relieved in conjunction with divesture of Xpress Internacional	$	2,018

Lease, Term and Discount Rate [Table Text Block]

Lease Term and Discount Rate	Weighted-Average Remaining Lease Term (years)		Weighted-Average Discount Rate
Operating leases		4.1		5.2	%
Finance leases		3.4		5.3	%

Operating and Finance Lease, Liability, Maturity [Table Text Block]

	March 31, 2019
	Finance			Operating
2019	$	4,236		$	49,948
2020		7,544			52,785
2021		4,084			41,805
2022		1,427			27,115
2023		1,427			18,794
Thereafter		297			17,842
		19,015			208,289
Less: Amount representing interest		(1,958	)		(21,469	)
Total	$	17,057		$	186,820

Contractual Obligation, Fiscal Year Maturity [Table Text Block]

	December 31, 2018
	Capital			Operating
2019	$	7,797		$	60,303
2020		7,564			42,632
2021		4,086			35,302
2022		1,427			20,751
2023		1,427			15,884
Thereafter		297			14,080
		22,598		$	188,952
Less: Amount representing interest		(2,285	)
		20,313
Less: Current portion		(6,711	)
	$	13,602

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Note 8 - Share-based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Nonvested Restricted Stock Shares Activity [Table Text Block]

			Weighted
	Number of		Average Grant
	Units		Date Fair Value
Unvested at December 31, 2018		270,742	$	14.20
Granted		461,775		8.94
Vested		31,845		15.77
Forfeited		5,500		16.00
Unvested at March 31, 2019		695,172	$	10.62

Share-based Payment Arrangement, Option, Activity [Table Text Block]

			Weighted
	Number of		Average Grant
	Units		Date Fair Value
Unvested at December 31, 2018		177,260	$	6.09
Granted		244,785		4.41
Unvested at March 31, 2019		422,045	$	5.12

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Strike price	$	9.40
Risk-free interest rate		2.50	%
Expected dividend yield		0	%
Expected volatility		45.65	%
Expected term (in years)		6.25

Share-based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block]

	Number of		Weighted
	Units		Average
Unvested at December 31, 2018		1,401,674	$	2.00
Vested		173,320		2.15
Unvested at March 31, 2019		1,228,354	$	1.98

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Note 9 - Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Fair Value, by Balance Sheet Grouping [Table Text Block]

	2019
	Fair Value		Input Level
Liabilities
Forward Contract	$	-		3

	2018
	Fair Value		Input Level
Liabilities
Forward Contract	$	1,793		3

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Three Months Ended
	March 31,
	2019		2018
Balance at beginning of year	$	1,793	$	1,985
Divesture of Xpress Internacional		1,793		-
Forward Contract Adjustment		-		(48	)
Balance at end of period	$	-	$	1,937

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Note 10 - Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended
	March 31,
	2019		2018
Net income	$	5,019	$	1,382
Net income attributable to noncontrolling interest		298		223
Net income attributable to common stockholders	$	4,721	$	1,159
Basic weighted average of outstanding shares of common stock		48,394		6,385
Dilutive effect of equity awards		997		-
Diluted weighted average of outstanding shares of common stock		49,391		6,385
Basic earnings per share	$	0.10	$	0.18
Diluted earnings per share	$	0.10	$	0.18

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Note 11 - Segment Information (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

	Three Months Ended
	March 31,
	2019		2018
Revenues
Truckload	$	369,119	$	371,167
Brokerage		46,244		54,541
Total Operating Revenue	$	415,363	$	425,708
Operating Income
Truckload	$	9,842	$	12,503
Brokerage		2,796		2,351
Total Operating Income	$	12,638	$	14,854

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]

	Three Months Ended
	March 31,
	2019		2018
Revenues
United States	$	412,991	$	412,852
Foreign countries
Mexico		2,372		12,856
Total	$	415,363	$	425,708

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Note 1 - Organization and Operations (Details Textual) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares	Mar. 31, 2019 $ / shares shares	Dec. 31, 2018 $ / shares shares	Oct. 12, 2007
Number of Reportable Segments		2
Preferred Stock, Shares Authorized		9,333,333
Common Class A [Member]
Number of Shares Issued Per Each Non Voting Membership Unit Upon Reorganization	4.6666667
Common Stock Voting Rights Per Share	1
Stock Issued During Period, Shares, New Issues	16,668,000
Shares Issued, Price Per Share | $ / shares	$ 16
Proceeds from Issuance of Common Stock | $	$ 246.6
Common Stock, Shares Authorized		140,000,000	140,000,000
Common Stock, Par or Stated Value Per Share | $ / shares		$ 0.01	$ 0.01
Common Class B [Member]
Number of Shares Issued Per Each Non Voting Membership Unit Upon Reorganization	4.6666667
Common Stock Voting Rights Per Share	5
Common Stock, Shares Authorized		35,000,000	35,000,000
Common Stock, Par or Stated Value Per Share | $ / shares		$ 0.01	$ 0.01
New Mountain Lake Holdings, LLC [Member]
Ownership Percentage				100.00%

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Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Operating Lease, Right-of-Use Asset	$ 186,941
Operating Lease, Liability, Total	$ 186,820
Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset		$ 183,000
Operating Lease, Liability, Total		$ 181,700

XML

Note 3 - Divesture of Xpress Internacional (Details Textual) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended
	Jan. 07, 2019	Dec. 31, 2018	Mar. 31, 2019	Jan. 17, 2019
Xpress International [Member] | Disposal Group, Held-for-sale, Not Discontinued Operations [Member]
Proceeds from Divestiture of Businesses	$ 4,500
Disposal Group, Including Discontinued Operation, Consideration, Notes Receivable				$ 6,000
Disposal Group, Including Discontinued Operation, Contingent Consideration				2,500
Disposal Group, Not Discontinued Operation, Loss (Gain) on Write-down		$ 10,700
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal			$ 0
Xpress International [Member] | Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Tractors [Member]
Property, Plant, and Equipment, Fair Value Disclosure				$ 2,500
Xpress International [Member]
Equity Method Investment, Ownership Percentage		95.00%

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Note 4 - Income Taxes (Details Textual)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%

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Note 4 - Income Taxes - Provision for Income Taxes and Effective Tax Rates (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income before Income Taxes	$ 6,920	$ 1,975
Income tax provision	$ 1,901	$ 593
Effective tax rate	27.50%	30.00%

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Note 5 - Long-term Debt (Details Textual) - USD ($)	1 Months Ended	4 Months Ended	6 Months Ended
	Jun. 30, 2018	Sep. 30, 2018	Mar. 31, 2019
Credit Facility [Member]
Line of Credit Facility Additional Borrowing Capacity Available	$ 75,000,000
Line of Credit Facility, Swingline Sub Facility, Maximum Borrowing Capacity	15,000,000
Credit Facility [Member] | Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate		1.25%
Credit Facility [Member] | Prime Rate [Member] | Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate			0.75%
Credit Facility [Member] | Prime Rate [Member] | Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate			1.50%
Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate		2.25%
Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate			1.75%
Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate			2.50%
Credit Facility [Member] | Term Facility [Member]
Debt Instrument, Face Amount	$ 200,000,000
Credit Facility [Member] | Term Facility [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage	1.25%
Credit Facility [Member] | Term Facility [Member] | Maximum [Member]
Debt Instrument, Interest Rate, Stated Percentage	2.50%
Revolving Credit Facility [Member] | Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 150,000,000
Letters of Credit Outstanding, Amount			$ 31,700,000
Long-term Line of Credit, Total			0
Line of Credit Facility, Remaining Borrowing Capacity			118,300,000
Revolving Credit Facility [Member] | Credit Facility [Member] | Minimum [Member]
Line of Credit Facility, Commitment Fee Percentage	0.25%
Revolving Credit Facility [Member] | Credit Facility [Member] | Maximum [Member]
Line of Credit Facility, Commitment Fee Percentage	0.35%
Revolving Credit Facility [Member] | Term Facility [Member]
Long-term Debt, Total			$ 192,500,000
Letter of Credit [Member] | Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 75,000,000

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Note 5 - Long-term Debt - Outstanding Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Long-term debt, gross	$ 392,109	$ 405,600
Less: Debt issuance costs	(1,264)	(1,347)
Less: Current maturities of long-term debt	(86,492)	(106,383)
	304,353	297,870
Term Loan [Member]
Long-term debt, gross	192,500	195,000
Revenue Equipment Loan [Member]
Long-term debt, gross	176,954	184,867
Mortgage Note Payable [Member]
Long-term debt, gross	18,574	18,861
Other Debt [Member]
Long-term debt, gross	$ 4,081	$ 6,872

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Note 5 - Long-term Debt - Outstanding Debt (Details) (Parentheticals) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Term Loan [Member]
Interest rate	4.70%	4.80%
Revenue Equipment Loan [Member]
Weighted average interest rate	5.00%	5.00%
Collateral	$ 188,300,000	$ 188,300,000
Mortgage Note Payable [Member]
Collateral	$ 23.80	$ 24.10
Mortgage Note Payable [Member] | Minimum [Member]
Interest rate	5.25%	5.25%
Mortgage Note Payable [Member] | Maximum [Member]
Interest rate	6.99%	6.99%

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Note 6 - Leases (Details Textual) - Certain Revenue and Service Equipment and Office and Terminal Facilities Leases [Member]	Mar. 31, 2019
Minimum [Member]
Lessee, Operating Lease, Term of Contract	1 year
Lessee, Finance Lease, Term of Contract	1 year
Maximum [Member]
Lessee, Operating Lease, Term of Contract	10 years
Lessor, Direct Financing Lease, Term of Contract	10 years

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Note 6 - Leases - Leases Assets and Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Operating Lease, Right-of-Use Asset	$ 186,941
Total leased assets	206,862
Operating	56,893
Operating	129,927
Total lease liabilities	203,877
Right-of-Use Asset [Member]
Operating Lease, Right-of-Use Asset	186,941
Property and Equipment, Net [Member]
Finance	19,921
Current Portion of Operating Leases [Member]
Operating	56,893
Current Maturities of Long-term Debt [Member]
Finance	8,625
Noncurrent Operating Lease Liability [Member]
Operating	129,927
Long-term Debt, Net of Current Maturities [Member]
Finance	$ 8,432

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Note 6 - Leases - Leases Cost (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Total lease cost	$ 21,604
Vehicle Rents and General and Other Operating [Member]
Operating lease cost	20,167
Depreciation and Amortization [Member]
Amortization of finance lease assets	808
Interest Expense [Member]
Interest on lease liabilities	318
General and Other Operating [Member]
Short-term lease cost	$ 311

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Note 6 - Leases - Cash Flow Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Cash paid for operating leases included in operating activities	$ 20,167
Cash paid for finance leases included in operating activities	318
Cash paid for finance leases included in financing activities	3,155
Operating lease right-of-use assets obtained in exchange for lease obligations	23,975
Operating lease right-of-use assets and liabilities relieved in conjunction with divesture of Xpress Internacional	$ 2,018

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Note 6 - Leases - Lease Term and Discount Rate (Details)	Mar. 31, 2019
Operating leases, Weighted Average Remaining Lease Term (Year)	4 years 36 days
Operating leases	5.20%
Finance leases, Weighted Average Remaining Lease Term (Year)	3 years 146 days
Finance leases	5.30%

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Note 6 - Leases - Futures maturities of Lease Liabilities (Details) $ in Thousands	Mar. 31, 2019 USD ($)
2019	$ 4,236
2019	49,948
2020	7,544
2020	52,785
2021	4,084
2021	41,805
2022	1,427
2022	27,115
2023	1,427
2023	18,794
Thereafter	297
Thereafter	17,842
	19,015
	208,289
Less: Amount representing interest	(1,958)
Less: Amount representing interest	(21,469)
Total	17,057
Operating Lease, Liability, Total	$ 186,820

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Note 6 - Leases - Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2018 USD ($)
2019	$ 7,797
2019	60,303
2020	7,564
2020	42,632
2021	4,086
2021	35,302
2022	1,427
2022	20,751
2023	1,427
2023	15,884
Thereafter	297
Thereafter	14,080
	22,598
	188,952
Less: Amount representing interest	(2,285)
	20,313
Less: Current portion	(6,711)
	$ 13,602

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Note 7 - Commitments and Contingencies (Details Textual) $ in Millions	Mar. 31, 2019 USD ($)
Capital Addition Purchase Commitments [Member]
Purchase Obligation, Future Minimum Payments, Remainder of Fiscal Year	$ 201.4
Line of Credit [Member]
Letters of Credit Outstanding, Amount	$ 31.7

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Note 8 - Share-based Compensation (Details Textual) - USD ($) shares in Millions, $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Jun. 30, 2018
Restricted Stock Units (RSUs) [Member]
Share-based Payment Arrangement, Expense	$ 0.2	$ 0.2
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	3 years 255 days		4 years 36 days
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount	$ 2.0		$ 2.2
Restricted Stock Units (RSUs) [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Restricted Stock Units (RSUs) [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	7 years
The 2018 Omnibus Incentive Plan [Member]
Common Stock, Capital Shares Reserved for Future Issuance				3.2
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount	$ 1.7		0.8
The 2018 Omnibus Incentive Plan [Member] | Restricted Stock [Member]
Share-based Payment Arrangement, Expense	0.6
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount	$ 6.3		$ 2.8
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	3 years 146 days		3 years 109 days
The 2018 Omnibus Incentive Plan [Member] | Restricted Stock [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	1 year
The 2018 Omnibus Incentive Plan [Member] | Restricted Stock [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
The 2018 Omnibus Incentive Plan [Member] | Share-based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years
Share-based Payment Arrangement, Expense	$ 0.1
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	3 years	3 years 182 days
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years

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Note 8 - Share-based Compensation - Restricted Stock Activity (Details) - Restricted Stock [Member]	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Unvested (in shares) | shares	270,742
Unvested, weighted average (in dollars per share) | $ / shares	$ 14.20
Granted, number of shares (in shares) | shares	461,775
Granted, weighted average grant date fair value (in dollars per share) | $ / shares	$ 8.94
Vested, number of shares (in shares) | shares	31,845
Vested, weighted average grant date fair value (in dollars per share) | $ / shares	$ 15.77
Forfeited, number of shares (in shares) | shares	5,500
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares	$ 16
Unvested (in shares) | shares	695,172
Unvested, weighted average (in dollars per share) | $ / shares	$ 10.62

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Note 8 - Share-based Compensation - Stock Option Activity (Details)	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Unvested (in shares) | shares	177,260
Unvested, weighted average (in dollars per share) | $ / shares	$ 6.09
Granted (in shares) | shares	244,785
Granted, weighted average (in dollars per share) | $ / shares	$ 4.41
Unvested (in shares) | shares	422,045
Unvested, weighted average (in dollars per share) | $ / shares	$ 5.12

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Note 8 - Share-based Compensation - Valuation Assumptions (Details)	3 Months Ended
	Mar. 31, 2019 $ / shares
Strike price (in dollars per share)	$ 9.40
Risk-free interest rate	2.50%
Expected dividend yield	0.00%
Expected volatility	45.65%
Expected term (in years) (Year)	6 years 91 days

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Note 8 - Share-based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) [Member]	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Unvested (in shares) | shares	1,401,674
Unvested, weighted average (in dollars per share) | $ / shares	$ 2
Vested (in shares) | shares	173,320
Vested, weighted average (in dollars per share) | $ / shares	$ 2.15
Unvested (in shares) | shares	1,228,354
Unvested, weighted average (in dollars per share) | $ / shares	$ 1.98

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Note 9 - Fair Value Measurements - Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Inputs, Level 3 [Member] | Forward Contracts [Member]
Forward Contract		$ 1,793

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Note 9 - Fair Value Measurements - Changes in Fair Value of Assets and Liabilities Using Significant Unobservable Inputs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Balance at beginning of year	$ 1,793	$ 1,985
Divesture of Xpress Internacional	1,793
Forward Contract Adjustment		(48)
Balance at end of period		$ 1,937

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Note 10 - Earnings Per Share (Details Textual)	3 Months Ended
	Mar. 31, 2019 shares
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	989,717

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Note 10 - Earnings Per Share - Basic and Diluted Per Share Calculations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net income	$ 5,019	$ 1,382
Net income attributable to noncontrolling interest	298	223
Net income attributable to common stockholders	$ 4,721	$ 1,159
Basic weighted average of outstanding shares of common stock (in shares)	48,394	6,385
Dilutive effect of equity awards (in shares)	997
Diluted weighted average of outstanding shares of common stock (in shares)	49,391	6,385
Basic earnings per share (in dollars per share)	$ 0.10	$ 0.18
Diluted earnings per share (in dollars per share)	$ 0.10	$ 0.18

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Note 11 - Segment Information (Details Textual)	3 Months Ended
	Mar. 31, 2019
Number of Reportable Segments	2
Truckload Segment [Member]
Percentage of Consolidated Revenue	89.00%
Brokerage Segment [Member]
Percentage of Consolidated Revenue	11.00%

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Note 11 - Segment Information - Summary of Segments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Total Operating Revenue	$ 415,363	$ 425,708
Operating Income
Total Operating Income	12,638	14,854
Truckload Segment [Member]
Revenues
Total Operating Revenue	369,119	371,167
Operating Income
Total Operating Income	9,842	12,503
Brokerage Segment [Member]
Revenues
Total Operating Revenue	46,244	54,541
Operating Income
Total Operating Income	$ 2,796	$ 2,351

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Note 11 - Segment Information - Summary of Geographical Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Total Operating Revenue	$ 415,363	$ 425,708
UNITED STATES
Total Operating Revenue	412,991	412,852
MEXICO
Total Operating Revenue	$ 2,372	$ 12,856