USA Truck Announces Third Quarter Results
VAN BUREN, Ark., Oct. 26, 2012
VAN BUREN, Ark., Oct. 26, 2012 /PRNewswire/ -- USA Truck, Inc. (NASDAQ: USAK)
today announced financial and operating results for the quarter and nine
months ended September 30, 2012.
Base revenue of $100.3 million for the quarter ended September 30, 2012,
decreased 2.3% from $102.6 million for the same quarter of 2011. We incurred
a net loss of $6.1 million ($0.59 per share) for the quarter ended September
30, 2012, compared to a net loss of $4.3 million ($0.42 per share) for the
same quarter of 2011.
Base revenue decreased 2.9% to $301.7 million for the nine months ended
September 30, 2012, from $310.8 million for the same period of 2011. We
incurred a net loss of $14.4 million ($1.40 per share) for the nine months
ended September 30, 2012, compared to a net loss of $6.4 million ($0.62 per
share) for the same period of 2011.
Net loss for thethird quarter of 2012 was impacted by the following items:
$0.11 per share relating to increases in accrued reserves for workers'
compensation and health claims incurred in prior periods and $0.03 per share
relating to the write off of deferred debt issuance costs associated with our
prior credit facility that was replaced during the quarter.
Cliff Beckham, President and CEO, offered the following assessment of the
operating environment during the quarter: "Freight demand was relatively weak
overall for a third quarter and we did not experience the level of increase in
freight volumes during the quarter that we normally expect. We attribute this
to slower growth in the United States economy, a slight contraction in
manufacturing activity, and one fewer business day than in the 2011 quarter.
In addition to tepid demand, fuel prices increased for much of the quarter
negatively impacting our results both sequentially and year-over-year.
Shippers remain concerned about adequate truckload capacity over the medium to
longer term, but the short-term environment was less supportive of rate
increases than in recent quarters. Drivers remain difficult to attract and
retain, requiring increased expense and focus despite the somewhat slower
demand environment. In response to the more difficult environment, we
maintained our fleet at 160 fewer trucks compared with the third quarter of
2011, increased the percentage of our business conducted through our SCS
segment, refinanced into a more flexible credit facility, and concentrated on
seating trucks and refining our freight network."
Business Units Results and Operating Data
Mr. Beckham continued with the following comments concerning the Company's
business unit performance: "Our SCS segment continued its strong performance,
growing base revenue by 26.9% and operating income by 2.2%. SCS revenues
accounted for 23.3% of total base revenue during the quarter, and SCS has been
consistently profitable with very little capital investment. Gross margin,
down 1.6 percentage points, was pressured by the lackluster demand
"Our Intermodal operations decreased as planned, as we reduced the number of
leased containers allocated to this unit. We believe we are on schedule to
recalibrate our intermodal model in 2013 to pave the way for future
"Our Truckload operations produced an operating ratio of 114.1%. These
results included approximately $2.3 million related to the items listed under
Financial Results above. Excluding these items, our operating ratio would have
been 110.8%, which was relatively consistent with our Truckload operating
ratio for the third quarter of last year.
"From an operating perspective, per-truck productivity was approximately the
same as in the 2011 quarter. However, intra-quarter operations improved and
remain at a higher level during October as a result of progress made since
changing the leadership of our operations personnel in the second quarter of
2012. The areas of focus during the third quarter included seating more
trucks, improving miles per tractor, and improving freight mix.
"During the quarter, we engaged an experienced truckload executive to assist
us in assessing and improving our operations activities. We determined that
the percentage of our business comprised of very short haul loads (under 300
miles) was too high, which was negatively impacting equipment utilization and
the ability of drivers to earn adequate compensation. We also re-evaluated
customer profitability on a lane-by-lane basis. As a result of this
re-evaluation, we accelerated the exit and replacement of specific lanes and
loads that failed to meet our new criteria. The timing was not optimal given
the weak freight environment, but we believed the overall benefits to our
drivers, customers, and future financial results justified the timeline.
"On a year-over-year basis, full quarter key operating metrics are not
meaningfully different from the third quarter of 2011. On an intra-quarter
basis, unmanned tractors improved from over 11.5% of the fleet in July to 5.7%
of the fleet at the end of September. The percentage of loads with a length
of haul under 300 miles dropped by approximately 26.1%, while base revenue per
loaded mile improved by four cents per mile and our average length of haul
expanded. Base revenue per manned tractor per week trended upward during the
quarter. Although some of the effect may be seasonal, we are encouraged by the
ability to increase our number of manned tractors while improving revenue per
manned tractor in a weak freight environment.
"The attached key operating metric charts (Miles per Manned Tractor per Week,
Loaded Revenue per Mile, Unmanned Tractors, and Base Revenue per Manned
Tractor per Week) reflect the results we have experienced for the periods
indicated, as well as for the first two weeks of October. We are presenting
weekly results beginning in July to provide a view into intra-quarter
Balance Sheet and Liquidity
Darron Ming, Executive Vice President and Chief Financial Officer, addressed
the Company's capitalization: "We believe our balance sheet and sources of
liquidity remain solid and adequate to support our business for the
foreseeable future. At September 30, 2012, our outstanding debt, less cash,
represented 54.6% of our balance sheet capitalization, compared to 47.4% at
December 31, 2011. At September 30, 2012, we were in compliance with our new,
five-year $125.0 million revolving credit facility and had approximately $23.0
million of available borrowing capacity (net of the minimum availability we
are required to maintain of approximately $18.75 million). For the nine months
ended September 30, 2012, we incurred net capital expenditures of
approximately $28.6 million and we anticipate proceeds from the sale of
property and equipment to exceed property and equipment purchases by
approximately $1.5 million for the remainder of 2012."
The following table summarizes the results of operations information of USA
Truck, Inc. ("Company") for the three-and nine- month periods indicated:
USA TRUCK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Trucking revenue $ 71,951 $ 77,790 $ 219,733 $ 245,974
Strategic Capacity Solutions 23,336 18,389 67,185 47,829
Intermodal revenue 5,037 6,464 14,749 16,966
Base revenue 100,324 102,643 301,667 310,769
Fuel surcharge revenue 24,092 27,494 75,990 82,438
Total revenue 124,416 130,137 377,657 393,207
Operating expenses and costs:
Salaries, wages and employee 36,276 34,423 106,507 102,229
Fuel and fuel taxes 31,443 33,397 96,780 104,456
Purchased transportation 31,373 32,213 93,626 89,073
Depreciation and amortization 11,237 12,390 33,571 37,491
Operations and maintenance 10,961 11,650 32,471 31,942
Insurance and claims 5,310 5,581 15,573 17,145
Operating taxes and licenses 1,288 1,345 4,184 4,118
Communications and utilities 969 1,103 3,049 3,136
Gain on disposal of assets, net (490) (648) (1,756) (2,904)
Other 4,574 4,542 13,142 13,350
Total operating expenses and costs 132,941 135,996 397,147 400,036
Operating loss (8,525) (5,859) (19,490) (6,829)
Other expenses (income):
Interest expense 1,034 877 3,043 2,440
Other, net (32) (174) (155) (210)
Total other expenses, net 1,002 703 2,888 2,230
Loss before income taxes (9,527) (6,562) (22,378) (9,059)
Income tax benefit (3,455) (2,257) (7,947) (2,636)
Net loss $ (6,072) $ (4,305) $ (14,431) $ (6,423)
Per share information:
Average shares outstanding (Basic) 10,312 10,294 10,310 10,304
Basic loss per share $ (0.59) $ (0.42) $ (1.40) $ (0.62)
Average shares outstanding 10,312 10,294 10,310 10,304
Diluted loss per share $ (0.59) $ (0.42) $ (1.40) $ (0.62)
The following table includes key operating results and statistics for our
three operating segments:
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Operating loss (in $ (10,111) $ (7,572) $ (24,391) $ (11,652)
Operating ratio (2) 114.1 % 109.8 % 111.1 % 104.6 %
Total miles (in 49,855 53,640 152,808 170,148
Empty mile factor 10.7 % 12.4 % 11.1 % 11.1 %
Weighted average number 2,157 2,317 2,186 2,328
of tractors (4)
Average miles per tractor 23,113 23,151 69,903 73,088
Average miles per tractor 1,759 1,761 1,786 1,874
Average miles per trip 557 507 537 532
Base Trucking revenue per $ 2,538 $ 2,555 $ 2,568 $ 2,709
tractor per week
Number of tractors at end 2,156 2,258 2,156 2,258
of period (4)
Operating income (in $ 1,916 $ 1,873 $ 5,989 $ 5,481
Gross margin (5) 13.1 % 14.7 % 13.8 % 15.4 %
Operating loss (in $ (330) $ (160) $ (1,088) $ (658)
Gross margin (5) 18.2 % 13.9 % 18.9 % 10.7 %
(1) Operating (loss) income is calculated by deducting total operating
expenses from total revenues.
(2) Operating ratio is calculated by dividing total operating expenses, net of
fuel surcharge, by base revenue.
(3) Total miles include both loaded and empty miles.
(4) Tractors include Company-operated tractors in service plus tractors
operated by independent contractors.
Gross margin is calculated by taking total revenue less purchased
(5) transportation expense and dividing that amount by total revenue. This
calculation includes intercompany revenues and expenses.
This press release 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. These statements generally may be
identified by their use of terms or phrases such as "expects," "estimates,"
"anticipates," "projects," "believes," "plans," "goals," "intends," "may,"
"will," "should," "could," "potential," "continue," "future" and terms or
phrases of similar substance.Forward-looking statements are based upon the
current beliefs and expectations of our management and 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.Accordingly, actual results may differ from those set forth in
the forward-looking statements.Readers should review and consider the
factors that may affect future results and other disclosures by the Company in
its press releases, Annual Report on Form 10-K and other filings with the
Securities and Exchange Commission. We disclaim any obligation to update or
revise any forward-looking statements to reflect actual results or changes in
the factors affecting the forward-looking information. In light of these
risks and uncertainties, the forward-looking events and circumstances
discussed in this press release might not occur.
All forward-looking statements attributable to us, or persons acting on our
behalf, are expressly qualified in their entirety by this cautionary
References to the "Company," "we," "us," "our" and words of similar import
refer to USA Truck, Inc. and its subsidiary.
USA Truck is a dry van truckload carrier transporting general commodities via
our General Freight and Dedicated Freight service offerings. We transport
commodities throughout the continental United States and into and out of
portions of Canada. We also transport general commodities into and out of
Mexico by allowing through-trailer service from our terminal in Laredo,
Texas. Our Strategic Capacity Solutions and Intermodal operating segments
provide customized transportation solutions using our technology and multiple
modes of transportation including our assets and the assets of our partner
This press release and related information will be available to interested
parties at our web site, http://www.usa-truck.com under the "News Releases"
tab of the "Investors" menu.
SOURCE USA Truck, Inc.
Contact: Cliff Beckham, President and Chief Executive Officer,
+1-479-471-2633, or Darron Ming, Executive Vice President and Chief Financial
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