VAN BUREN, Ark., July 19, 2007 (PRIME NEWSWIRE) -- USA Truck, Inc. (Nasdaq:USAK) today announced base revenue of $101.7 million for the second quarter ended June 30, 2007, an increase of 2.1% from $99.6 million for the same quarter of 2006. Net income decreased 62.8% from $4.4 million for the quarter ended June 30, 2006 to $1.6 million for the same quarter of 2007. Diluted earnings per share decreased 60.5% from $0.38 for the quarter ended June 30, 2006 to $0.15 for the same quarter of 2007.
Base revenue decreased 0.1% from $196.4 million for the six months ended June 30, 2006 to $196.2 million for the same period of 2007. Net income decreased 78.2% from $7.8 million for the six months ended June 30, 2006 to $1.7 million for the same period of 2007. Diluted earnings per share decreased 76.1% from $0.67 for the six months ended June 30, 2006 to $0.16 for the same period of 2007.
In comparing the financial results of the three months ended June 30, 2007 to the comparable period of 2006, Jerry D. Orler, President and CEO of the Company, made the following statement:
"Freight demand for the quarter was certainly softer than a year ago, but freight volumes remained relatively consistent during May and June.
"We grew our base revenue by 2.1%:
* Trucking base revenue grew 4.4% as our tractor count grew 2.8%
and base revenue per tractor per week (revenue yield) improved by
1.6%, bolstered by increases in revenue per loaded mile and miles
per tractor. Empty miles remained a challenge during the quarter,
which is reflective of the continuing soft freight environment.
* Regional Freight led our Trucking divisions with a 44.5% growth
rate in base revenue. However, Dedicated Freight and General
Freight both showed year-over-year improvements in revenue yield,
while Regional Freight's revenue yield declined. We will slow the
growth in Regional Freight for the remainder of the year until
its revenue yield is more in line with the other Trucking
divisions.
* Over the past few quarters, our strategy to slow fleet growth and
concentrate on revenue yield was successful. The average tractor
count grew by only 1.0% sequentially from the first quarter, half
of which was attributable to growth in our owner-operator
program. Revenue yield increased sequentially from the first
quarter of 2007 (7.7%) as we made improvements in Trucking
revenue per loaded mile (0.3%), miles per tractor per week (5.3%)
and the empty mile factor (1.7 percentage points).
* Due to our strategic pull-back from the large-scale third party
logistics market last year, USA Logistics base revenue declined
43.5%. However, our ongoing efforts to build our Freight
Brokerage business have been successful as reflected in the 32.0%
sequential increase in USA Logistics base revenue when compared
to the first quarter of this year.
"We are pleased with the continued improvements in our operating performance. However, there is still much to be accomplished on the expense side of the business. In particular, two areas of costs hindered earnings during the quarter:
* Labor costs grew 8.5% as we increased driver pay in 2006 in response to a challenging driver hiring market and abnormally high driver turnover. The driver hiring market has improved slightly since the fourth quarter of 2006 and remains difficult, but it is more manageable than during the past several years. Additionally, last fall we implemented several internal initiatives focused on reducing driver turnover. Those initiatives have yielded dramatic improvements as turnover has dropped by more than 40 percentage points. The combination of a better market for hiring drivers and our reduced driver turnover helped us reduce driver recruiting costs by one-third. We believe that our driver pay package is among the industry's best. * Insurance and claims costs remain unusually high due to an elevated frequency of accidents. In response, we recently restructured our safety department and implemented a comprehensive, data-driven plan focused on more proactive training measures for those segments of our driver population that need it the most. This new plan will take our safety program to a new level of sophistication. We are optimistic that the plan will reduce accident frequencies, and we are anxious to fully implement it as 2007 progresses.
"Our management team and our Board of Directors re-examined our business strategy during the fourth quarter of 2006. We reviewed a number of strategic alternatives to improve our performance and to address the disparity between the valuation of our stock relative to our peer groups'. As we previously disclosed, we emerged from that review with six long-term strategic objectives rooted in earning our cost of capital and improving the consistency of our operating performance.
"While the strategic objectives are long-term in nature, the shift in our fundamental strategy has already been evident in several notable factors:
* We have repurchased approximately 1,038,000 shares of our own Common Stock since October 2006, which represents about 9.0% of the September 30, 2006 outstanding share count. The buyback program has proven to be the best use of the considerable free cash flow that we generated over the past few quarters, and it has reduced our average cost of capital significantly. * As mentioned above, we virtually stopped our tractor growth since the beginning of 2007 and increased our revenue yield per tractor over the past few quarters. * We have grown our less capital-intensive businesses such as freight brokerage and our owner-operator program. * Our operating margins are down versus last year, but we are pleased with the general direction of the business as the sequential improvements reflect. We have a large-scale internal effort in place to address all aspects of our operating performance that have declined. We have also effected changes to our upper management approach to keep our team more closely in tune with market conditions and to developing changes within our cost structure, both of which we believe will help to improve the consistency of our operating performance.
"Freight conditions remain challenging and there are no clear catalysts on the horizon to materially change those conditions positively or negatively. Thus, for the balance of 2007, we will continue to manage our capital deployment prudently, and we will continue to work on our current business model, develop plans for long-term revenue growth and take positive steps toward achieving all of our long-term strategic objectives."
The following table summarizes the earnings information of USA Truck,
Inc. ("Company") and sets forth the percentage relationship of certain
items to base revenue for the three-month periods indicated:
(in thousands, except percentage data (1) and per share amounts)
Three Months Ended June 30,
----------------------------------
2007 2006
-------------- ---------------
Revenue:
Trucking revenue (2) $ 99,000 $ 94,837
USA Logistics revenue (3) 2,687 4,758
-------- --------
Base revenue 101,687 100.0% 99,595 100.0%
Fuel surcharge revenue 22,702 22,346
-------- --------
Total revenue 124,389 121,941
-------- --------
Operating expenses and costs:
Salaries, wages and
employee benefits 41,570 40.9 38,305 38.5
Fuel and fuel taxes (4) 37,997 15.0 37,043 14.8
Depreciation and amortization 12,218 12.0 11,597 11.6
Insurance and claims 8,880 8.7 6,251 6.3
Operations and maintenance 6,676 6.5 5,492 5.5
Purchased transportation 4,856 4.8 6,132 6.2
Operating taxes and licenses 1,626 1.6 1,677 1.7
Communications and utilities 939 0.9 832 0.8
Loss (gain) on disposal of
property and equipment, net 57 0.1 (313) (0.3)
Other 4,736 4.7 5,729 5.7
-------- ----- -------- -----
Total operating expenses 119,555 95.2 112,745 90.8
-------- ----- -------- -----
Operating income 4,834 4.8 9,196 9.2
Other expenses (income):
Interest expense 1,450 1.4 1,099 1.1
Other, net (22) -- (1) --
-------- ----- -------- -----
Total other expenses, net 1,428 1.4 1,098 1.1
-------- ----- -------- -----
Income before income taxes 3,406 3.4 8,098 8.1
Income tax expense 1,786 1.8 3,739 3.7
-------- ----- -------- -----
Net income $ 1,620 1.6% $ 4,359 4.4%
======== ===== ======== =====
Per share information:
Average shares outstanding
(Basic) 10,671 11,382
======== ========
Basic earnings per share $ 0.15 $ 0.38
======== ========
Average shares outstanding
(Diluted) 10,780 11,583
======== ========
Diluted earnings per share $ 0.15 $ 0.38
======== ========
The following tables include key operating statistics for the
three-month periods indicated:
Trucking Operations
Three Months Ended June 30, 2007
-----------------------------------------
General Regional Dedicated Total
Freight Freight Freight Trucking
------- ------- ------- -------
Total miles
(in thousands) (5) 62,691 8,285 6,024 77,000
Empty mile factor (6) 10.5% 15.3% 2.8% 10.4%
Base Trucking revenue
per loaded mile $ 1.43 $ 1.56 $ 1.35 $ 1.44
Average number of
tractors (7) 2,062 322 200 2,584
Average miles per tractor
per period 30,403 25,732 30,119 29,799
Average miles per tractor
per week 2,413 2,042 2,390 2,365
Average miles per trip (8) 914 490 488 787
Average unmanned tractor
percentage (9) 3.0% 5.1% 3.5% 3.3%
Base Trucking revenue per
truck per week $ 3,086 $ 2,693 $ 3,137 $ 3,041
Three Months Ended June 30, 2006
----------------------------------------
General Regional Dedicated Total
Freight Freight Freight Trucking
------- ------ ------- -------
Total miles (in
thousands) (5) 61,957 5,667 5,824 73,448
Empty mile factor (6) 10.1% 13.0% 4.3% 9.9%
Base Trucking
revenue per loaded
mile $ 1.43 $ 1.53 $ 1.37 $ 1.43
Average number of
tractors (7) 2,088 219 207 2,514
Average miles per
tractor per period 29,673 25,877 28,131 29,215
Average miles per
tractor per week 2,355 2,054 2,233 2,319
Average miles per
trip (8) 932 542 585 845
Average unmanned
tractor percentage (9) 2.8% 7.3% 12.2% 4.0%
Base Trucking
revenue per truck
per week $ 3,027 $2,739 $ 2,927 $ 2,994
(1) Percentages are presented in relationship to base revenue.
(2) Trucking revenue includes base revenue generated from services
using Company-owned or owner-operator tractors. Specifically, it
includes base revenue from our General Freight, Regional Freight
and Dedicated Freight divisions.
(3) USA Logistics revenue includes base revenue generated from
non-asset based services. Specifically, it includes base revenue
from our Freight Brokerage and Third Party Logistics divisions.
(4) Fuel and fuel taxes as a percentage of base revenue is calculated
by subtracting fuel surcharge revenue from fuel and fuel taxes
expense and dividing that amount by base revenue.
(5) Total miles include both loaded and empty miles.
(6) The empty mile factor is the number of miles traveled for which
we are not typically compensated by any customer as a percentage
of total miles traveled.
(7) Average number of tractors includes Company-operated tractors
plus owner-operator tractors.
(8) Average miles per trip is based upon loaded miles divided by the
number of Trucking shipments.
(9) Average unmanned tractor percentage is the weighted average
percentage of Company-operated tractors to which a driver is not
assigned.
The following table summarizes the earnings information of the
Company and sets forth the percentage relationship of certain items
to base revenue for the six-month periods indicated:
(in thousands, except percentage data (1) and per share amounts)
Six Months Ended June 30,
--------------------------------------
2007 2006
------------------ ------------------
Revenue:
Trucking
revenue (2) $ 191,438 $ 186,224
USA Logistics
revenue (3) 4,722 10,187
--------- ---------
Base revenue 196,160 100.0% 196,411 100.0%
Fuel surcharge
revenue 40,680 39,738
Total revenue 236,840 236,149
--------- ---------
Operating expenses
and costs:
Salaries, wages
and employee
benefits 82,321 42.0 75,988 38.7
Fuel and fuel
taxes (4) 71,247 15.6 69,303 15.1
Depreciation
and amortization 24,108 12.3 22,813 11.6
Insurance and
claims 16,207 8.3 12,619 6.4
Operations and
maintenance 12,548 6.4 10,807 5.5
Purchased
transportation 8,625 4.4 12,788 6.5
Operating taxes
and licenses 3,246 1.6 3,312 1.7
Communications
and utilities 1,891 1.0 1,666 0.8
Gain on disposal
of property and
equipment, net (314) (0.2) (426) (0.2)
Other 10,039 5.1 10,863 5.5
-------- -------- -------- -------
Total operating
expenses 229,918 96.5 219,733 91.6
-------- -------- -------- -------
Operating income 6,922 3.5 16,416 8.4
Other expenses
(income):
Interest expense 2,601 1.3 2,028 1.0
Other, net 57 -- (62) --
-------- -------- -------- -------
Total other
expenses, net 2,658 1.3 1,966 1.0
-------- -------- -------- -------
Income before
income taxes 4,264 2.2 14,450 7.4
Income tax expense 2,564 1.3 6,643 3.4
-------- -------- -------- -------
Net income $ 1,700 0.9% $ 7,807 4.0%
======== ======= ========= =======
Per share
information:
Average shares
outstanding
(Basic) 10,821 11,365
========= =========
Basic earnings
per share $ 0.16 $ 0.69
========= =========
Average shares
outstanding
(Diluted) 10,939 11,609
========= =========
Diluted earnings
per share $ 0.16 $ 0.67
========= =========
The following tables include key operating statistics for the six-month
periods indicated:
Trucking Operations
Six Months Ended June 30, 2007
--------------------------------------------
General Regional Dedicated Total
Freight Freight Freight Trucking
-------- -------- -------- --------
Total miles (in
thousands) (5) 121,944 16,237 12,319 150,500
Empty mile
factor (6) 11.5% 15.8% 2.6% 11.2%
Base Trucking
revenue per
loaded mile $ 1.43 $ 1.56 $ 1.35 $ 1.43
Average number
of tractors (7) 2,039 321 211 2,571
Average miles per
tractor per period 59,806 50,583 58,384 58,538
Average miles per
tractor per week 2,355 1,991 2,299 2,305
Average miles per
trip (8) 915 492 506 788
Average unmanned
tractor percentage (9) 2.8% 4.5% 4.3% 3.1%
Base Trucking
revenue per truck
per week $ 2,972 $ 2,616 $ 3,024 $ 2,932
Six Months Ended June 30, 2006
--------------------------------------------
General Regional Dedicated Total
Freight Freight Freight Trucking
-------- -------- -------- --------
Total miles (in
thousands) (5) 121,160 10,721 12,785 144,666
Empty mile factor (6) 10.1% 12.9% 4.0% 9.8%
Base Trucking
revenue per loaded
mile $ 1.43 $ 1.53 $ 1.34 $ 1.43
Average number of
tractors (7) 2,059 205 215 2,479
Average miles per
tractor per period 58,844 52,297 59,464 58,357
Average miles per
tractor per week 2,317 2,059 2,341 2,298
Average miles per
trip (8) 937 550 593 848
Average unmanned
tractor percentage (9) 3.4% 6.8% 9.8% 4.2%
Base Trucking
revenue per
truck per week $ 2,974 $ 2,736 $ 3,008 $ 2,958
(1) Percentages are presented in relationship to base revenue.
(2) Trucking revenue includes base revenue generated from services
using Company-owned or owner-operator tractors. Specifically, it
includes base revenue from our General Freight, Regional Freight
and Dedicated Freight divisions.
(3) USA Logistics revenue includes base revenue generated from
non-asset based services. Specifically, it includes base revenue
from our Freight Brokerage and Third Party Logistics divisions.
(4) Fuel and fuel taxes as a percentage of base revenue is calculated
by subtracting fuel surcharge revenue from fuel and fuel taxes
expense and dividing that amount by base revenue.
(5) Total miles include both loaded and empty miles.
(6) The empty mile factor is the number of miles traveled for which
we are not typically compensated by any customer as a percentage
of total miles traveled.
(7) Average number of tractors includes Company-operated tractors
plus owner-operator tractors.
(8) Average miles per trip is based upon loaded miles divided by the
number of Trucking shipments.
(9) Average unmanned tractor percentage is the weighted average
percentage of Company-operated tractors to which a driver is not
assigned.
Selected Balance Sheet Data:
(in thousands, except percentage data)
June 30, December 31,
2007 2006
---------- ----------
Total assets $ 343,136 $ 339,494
Total equity 149,174 159,558
Total debt, including
current maturities 105,875 95,406
Debt to capitalization
ratio 41.5% 37.4%
This press release contains forward-looking statements and information that are based on our current beliefs and expectations and assumptions we have made based upon information currently available. Forward-looking statements include statements relating to our plans, strategies, objectives, expectations, intentions and adequacy of resources, and may be identified by words such as "will," "could," "should," "may," "believe," "expect," "intend," "plan," "schedule," "estimate," "project" and similar expressions. These statements are based on current expectations and are subject to uncertainty and change. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot assure you that such expectations will be realized. If one or more of the risks or uncertainties underlying such expectations materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected. Among other things, we cannot assure you that we will be able to continue the recent positive trends identified in this press release such as the improvement in our Trucking revenue per tractor per week, the growth of our Regional Freight division or the improvement in driver turnover. Among the key factors that are not within our control and that have a direct bearing on operating results are increases in fuel prices, adverse weather conditions, increased regulatory burdens and the impact of increased rate competition. Our results have also been, and will continue to be, significantly affected by fluctuations in general economic conditions, as our tractor utilization is directly related to the business levels of our customers in a variety of industries. In addition, shortages of qualified drivers and intense or increased competition for drivers have adversely impacted our operating results and our ability to grow and will continue to do so. Results for any specific period could also be affected by various unforeseen events, such as unusual levels of equipment failure or vehicle accident claims. Additional risks associated with our operations are discussed in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2006, and our quarterly reports on Form 10-Q.
All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by this cautionary statement.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release might not occur.
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, Regional and Dedicated Freight divisions. 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 Third Party Logistics and Freight Brokerage divisions provide customized transportation solutions using our technology and multiple modes of transportation including our assets and the assets of our partner carriers.
This press release and related information will be available to interested parties at our web site, http://www.usa-truck.com under the "Financial Data" tab of the "Investor Relations" page.