INVESTOR PRESENTATION August 2020
DISCLAIMER AND FORWARD-LOOKING STATEMENTS Forward-Looking Statements This presentation (the “Presentation”) contains forward - looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward - looking statements are made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995, as amended. These forward - looking statements, which involve risks and uncertainties, are generally identified by the use of forward - looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “focus,” “forecast,” “foresee,” “goal,” “hope,” “intend,” “likely,” “may,” “might,” “optimistic,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this Presentation, including statements regarding the Company’s strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward - looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by 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, 2019 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. Readers should review and consider such risk factors along with various disclosures in our press releases, stockholder reports, and other filings with the Securities and Exchange Commission. These forward - looking statements reflect the Company’s views with respect to future events as of the date of this Presentation and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward - looking statements. These forward - looking statements represent the Company’s estimates and assumptions only as of the date of this Presentation and, except as required by law, the Company undertakes no obligation to update or review publicly any forward - looking statements, whether as a result of new information, future events or otherwise after the date of this Presentation. You should read this Presentation with the understanding that the Company’s actual future results may be materially different from what we expect. The Company qualifies all of its forward - looking statements by these cautionary statements. Non-GAAP Financial Measures In addition to our net income determined in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’), we evaluate operating performance using certain non - GAAP measures, including Adjusted Operating Ratio, Adjusted Operating Income (Loss), Adjusted Net Income (Loss) Attributable to Controlling Interest, and Adjusted EPS (on a consolidated and, as applicable, segment basis). Management believes the use of non - GAAP measures assists investors and securities analysts in understanding the ongoing operating performance of our business by allowing more effective comparison between periods. Further, management uses non - GAAP Adjusted Operating Ratio, Adjusted Operating Income (Loss), Adjusted Net Income (Loss) Attributable to Controlling Interest, and Adjusted EPS measures on a supplemental basis to remove items that may not be an indicator of performance from period - to - period. The non - GAAP information provided is used by our management and may not be comparable to similar measures disclosed by other companies. The non - GAAP measures used herein have limitations as analytical tools and should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. You should not consider the non - GAAP measures used herein 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. Refer to the Appendix section of this Presentation for definitions of Adjusted Operating Ratio, Adjusted Operating Income (Loss), Adjusted Net Income (Loss) Attributable to Controlling Interest, and Adjusted EPS and reconciliations of those measures to the most directly comparable GAAP measures. INVESTOR PRESENTATION 2
INVESTMENT HIGHLIGHTS • Leading North American Truckload Player with a Balanced Portfolio Enjoying Benefits of Scale • Continuing Investment in Technology to Increase Frictionless Order and Digital Fleet Momentum • Business Model Designed to Take Advantage of All Cycles Complemented by a Diverse Customer Base • Significant Transformation Underway to Drive Efficiency and Growth A Unique Internal Improvements Growth + Operating Opportunity Leverage INVESTOR PRESENTATION 3
LEADING TRUCKLOAD OPERATOR SCALED FOR SUCCESS A Leading Truckload Carrier Scaled for Success with Network Breadth & Depth 5th ~6,700 LARGEST ASSET-BASED TRACTORS TRUCKLOAD CARRIER IN THE U.S. $1.7B ~15,500 TRAILERS TOTAL OPERATING REVENUE IN FY 2019 • Complementary asset-based and brokerage service offerings with an allocation strategy designed to maximize productivity • Fully developed terminal networks and scalable • Modern tractor fleet with advanced safety & efficiency features • Diversified end markets and blue-chip customer Population per base of Fortune 500 companies Square Mile by State 1000+ • Management team and philosophy improving the Terminal (13) 500 - 1000 business around metrics-driven, performance- Drop Yard (35) 200 - 500 Office (5) based culture committed to transparency 100 - 200 Warehouse (1) 50 - 100 Shop 20 - 50 Headquarters 0 - 20 Land 1 U.S. Xpress Adjusted Operating Ratio (“Adjusted OR”). See appendix of this presentation for Adjusted OR reconciliation. 2 Tractor and trailer estimates as of 4Q19 INVESTOR PRESENTATION 4
COMPLEMENTARY PORTFOLIO BALANCES MARKET CYCLES 2019 Revenue (Ex. FSC) Breakdown by Division (1) (%) 48% 37% 12% Over-the-Road (“OTR”) Dedicated Brokerage • Transports a full trailer of freight • Contractually assigned • Non-asset-based freight for a single customer from equipment, drivers and on-site brokerage service through origin to destination, typically personnel to address which loads are contracted to Digital fleet launch Digital fleet launch without intermediate stops or customers’ needs for third-party carriers contributed to contributed to handling committed capacity and service • Allocation strategy designed to 3.5% 3.5% levels • Tractors are operated with one maximize profitability of our increase in increase in (“solo”) driver or a team of two • Multi-year initial contract term Truckload fleet before drivers (“expedited”) to handle with guaranteed volumes and outsourcing loads to third-party OTR utilization on a OTR utilization on a more time-sensitive, higher pricing carriers year over year year over year margin freight basis basis Launched digital fleet Fifth sequential quarter 37.8% YoY increase in and scaled to 400 with average revenue load count in Q2 tractors in Q2 per tractor per week in excess of $4,000 BENEFIT TO PORTFOLIO BENEFIT TO PORTFOLIO 1.~1-2% attributable to detention and other ancillary charges INVESTOR PRESENTATION 5
LONG-STANDING, DIVERSE CUSTOMER BASE Long-Standing Blue Chip Customer Base Customer Mix Relatively Balanced Utilizing Multiple Service Offerings Through Seasonal and Cyclical Swings Automotive, 2% Other, 1% Chemical, 2% Paper & Packaging, 2% 3PL, 5% Consumer Products Retail, 9% 40% 2019 Manufacturing Customer 10% Mix E-Commerce and Packages 9% Food & Beverage, 20% • Our top 25 customers represent 71% of our 2019 revenue • 8 of our top 10 customers use all 3 of our service offerings • Retail mix is weighted towards discount retail and and relationships exceed 15 years consumer products INVESTOR PRESENTATION 6
TRANSITIONING ONTO A DIGITAL ENVIRONMENT Foundation: Transformation: Leadership and Culture Restructuring Systems to Transformation Achieve Digital Platform • Eric Fuller Named CEO • Customer Service in 2015 • Fleet Management • Eric Peterson named CFO Digital Initiatives: in 2015 • Load Planning Frictionless Order • Freight Selection to • Execution Oriented & Digital Fleet Prioritize Assets Culture Instilled • Fleet Renewal and • Started to Manage the Maintenance Redesign Business by Core Metrics Program • FRICTIONLESS ORDER INVESTOR PRESENTATION 7
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