VAN BUREN, Ark., Oct. 18, 2007 (PRIME NEWSWIRE) -- USA Truck, Inc. (Nasdaq:USAK) today announced base revenue of $99.3 million for the third quarter ended September 30, 2007, an increase of 2.7% from $96.7 million for the same quarter of 2006. Net income decreased 99.5% from $3.4 million for the quarter ended September 30, 2006 to $16 thousand for the same quarter of 2007. Diluted earnings per share decreased from $0.30 for the quarter ended September 30, 2006 to $0.00 for the same quarter of 2007.
Base revenue increased 0.8% from $293.1 million for the nine months ended September 30, 2006 to $295.5 million for the same period of 2007. Net income decreased 84.7% from $11.2 million for the nine months ended September 30, 2006 to $1.7 million for the same period of 2007. Diluted earnings per share decreased 83.5% from $0.97 for the nine months ended September 30, 2006 to $0.16 for the same period of 2007.
In comparing the financial results of the three months ended September 30, 2007 to the comparable period of 2006, Cliff Beckham, President and CEO, made the following statement:
"The current freight environment continues as one of the most challenging we have ever seen. For the second consecutive year, we have experienced virtually no fall peak shipping season. That soft freight demand, an adverse jury verdict in a contract dispute and high fuel prices were the dominant influences on our earnings during the quarter.
"Our base revenue increased 2.7%. Trucking revenue increased 2.5% as our average tractor count grew by 2.3% (but actually declined slightly sequentially from the second quarter). Our increased focus on non-asset based services bore fruit as USA Logistics revenue, particularly our Strategic Capacity Solutions division (Freight Brokerage), increased 13.0%.
"Competitive pressures eroded our base revenue for the quarter by almost $0.03 per loaded mile (2.0%), and base revenue per total mile decreased approximately $0.04 (2.9%) as our empty mile factor (historically a strong indicator of freight availability) increased by 0.87 percentage points. We expect pricing and freight availability to remain competitive in the near-term due to the continued over-capacity of tractors in the industry relative to freight demand.
"Despite the current freight conditions, we continue to focus our efforts on the fundamentals of our business with some signs of progress. In particular, our driver turnover improved by nearly 45 percentage points year-over-year. The dramatic improvement in driver turnover over the past year has contributed significantly to fewer unmanned tractors (2.5 percentage point improvement for the quarter) and has translated into more miles per tractor per week (3.4% increase for the quarter). Combined with slower fleet growth, the driver turnover improvements yielded a 27.1% decline in driver recruiting costs, or over 100 basis points in margin.
"While those improvements contributed to the efficiency of our operations, they were offset by the soft freight demand and cost pressures:
* Fuel and fuel tax expense, excluding fuel surcharge revenue, increased 130 basis points due largely to a higher national average price for diesel fuel; and * In early August, a jury returned an unfavorable verdict in a litigated contract dispute. The jury held that USA Truck breached a contract and awarded the plaintiff damages of approximately $3.0 million (300 basis points). During the fourth quarter, we expect the court to determine any additional amounts that we may owe in pre-judgment interest and legal fees. The Company is currently considering all of its available options in regard to the jury's verdict. This verdict had a negative impact on third quarter diluted earnings per share of approximately $0.17. Without that impact, our operations would have produced improved diluted earnings per share sequentially compared to the second quarter. That is something with which we are pleased given the challenging market conditions.
"Our restructured safety department's emphasis on safety awareness, training and accident prevention is showing signs of progress. While our accident frequencies remain elevated year-over-year, we have experienced a sequential reduction in accident frequency each quarter this year. We are executing a detailed, data-driven plan to bring down our accident frequencies long-term. An example of our efforts can be found in the frequency of our rollover accidents. During the first two quarters this year, our fleet of approximately 2,600 tractors experienced 24 of these expensive accidents (one every 7.5 days). During July, we implemented a Company-wide training and awareness campaign targeting rollovers. During the third quarter, with the same approximate number of tractors, we only experienced four rollovers (one every 22.5 days). Our safety effort is much broader than just rollovers, but that performance gives us confidence that our efforts, which we call the "war on accidents" internally, will yield tangible, long-term results.
"We have also made progress toward the long-term strategies that we implemented in the fourth quarter of 2006, which basically shift our focus from revenue growth to improving financial returns. Specifically, we have repurchased approximately 934,000 shares of our common stock year-to-date, we have slowed our fleet growth to essentially flat sequentially compared to the second quarter and 2.3% year-over-year, we have increased our revenue yield (revenue per truck per week) 0.2% year-over-year despite economic conditions, and on a year-over-year basis we have grown our non-asset based service revenue by 13.0% and more than doubled the size of our owner-operator fleet. These signs of progress represent only a small step toward achieving our long-term objectives set forth in our 2006 Annual Report on Form 10-K.
"During the fourth quarter, we will continue to focus on fundamentals, develop our 2008 operating plan and work diligently to remove costs from our system by improving operating efficiency."
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 September 30,
-----------------------------------
2007 2006
---------------- ----------------
Revenue:
Trucking revenue (2) $ 96,930 $ 94,558
USA Logistics revenue (3) 2,418 2,139
-------- --------
Base revenue 99,348 100.0% 96,697 100.0%
Fuel surcharge revenue 23,395 23,105
-------- --------
Total revenue 122,743 119,802
-------- --------
Operating expenses and costs:
Salaries, wages and employee
benefits 39,948 40.3 38,804 40.1
Fuel and fuel taxes (4) 39,366 16.1 37,449 14.8
Depreciation and amortization 12,464 12.5 11,798 12.2
Insurance and claims 7,376 7.5 7,266 7.5
Operations and maintenance 6,579 6.6 5,489 5.7
Purchased transportation 4,903 4.9 3,447 3.6
Litigation verdict 2,967 3.0 -- --
Operating taxes and licenses 1,522 1.5 1,588 1.7
Communications and utilities 933 0.9 857 0.9
Loss (gain) on disposal of
property and equipment, net 11 -- (71) (0.1)
Other 4,639 4.7 5,695 5.9
-------- ------ -------- ------
Total operating expenses 120,708 98.0 112,322 92.3
-------- ------ -------- ------
Operating income 2,035 2.0 7,480 7.7
Other expenses (income):
Interest expense 1,285 1.2 1,065 1.0
Other, net (35) -- (30) --
-------- ------ -------- ------
Total other expenses, net 1,250 1.2 1,035 1.0
-------- ------ -------- ------
Income before income taxes 785 0.8 6,445 6.7
Income tax expense 769 0.8 3,030 3.2
-------- ------ -------- ------
Net income $ 16 --% $ 3,415 3.5%
======== ====== ======== ======
Per share information:
Average shares outstanding
(Basic) 10,429 11,389
======== ========
Basic earnings per share $ -- $ 0.30
======== ========
Average shares outstanding
(Diluted) 10,535 11,558
======== ========
Diluted earnings per share $ -- $ 0.30
======== ========
The following tables include key operating statistics for the
three-month periods indicated:
Trucking Operations
Three Months Ended September 30, 2007
--------------------------------------
General Regional Dedicated Total
Freight Freight Freight Trucking
------- -------- --------- --------
Total miles (in thousands)(5) 62,283 8,581 5,102 75,966
Empty mile factor(6) 10.7% 15.2% 1.6% 10.6%
Base Trucking revenue per
loaded mile $ 1.42 $ 1.53 $ 1.36 $ 1.43
Average number of tractors(7) 2,065 334 182 2,581
Average miles per tractor per
period 30,161 25,692 28,031 29,433
Average miles per tractor per
week 2,394 2,039 2,225 2,336
Average miles per trip(8) 903 503 472 783
Average unmanned tractor
percentage(9) 2.5% 4.3% 2.8% 2.8%
Base Trucking revenue per
truck per week $ 3,035 $ 2,647 $ 2,977 $ 2,981
Three Months Ended September 30, 2006
-------------------------------------
General Regional Dedicated Total
Freight Freight Freight Trucking
------- -------- --------- --------
Total miles (in thousands)(5) 59,510 5,886 6,388 71,784
Empty mile factor(6) 10.0% 13.1% 3.6% 9.7%
Base Trucking revenue per
loaded mile $ 1.46 $ 1.56 $ 1.41 $ 1.46
Average number of tractors(7) 2,041 224 257 2,522
Average miles per tractor per
period 29,157 26,278 24,857 28,463
Average miles per tractor per
week 2,314 2,086 1,973 2,259
Average miles per trip(8) 951 534 549 841
Average unmanned tractor
percentage(9) 4.9% 4.5% 9.4% 5.3%
Base Trucking revenue per
truck per week $ 3,028 $ 2,832 $ 2,682 $ 2,976
(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 Strategic Capacity Solutions (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 nine-month periods indicated:
(in thousands, except percentage data (1) and per share amounts)
Nine Months Ended September 30,
------------------------------------
2007 2006
---------------- ----------------
Revenue:
Trucking revenue (2) $ 288,368 $ 280,782
USA Logistics revenue (3) 7,140 12,326
--------- ---------
Base revenue 295,508 100.0% 293,108 100.0%
Fuel surcharge revenue 64,075 62,843
--------- ---------
Total revenue 359,583 355,951
--------- ---------
Operating expenses and costs:
Salaries, wages and employee
benefits 122,269 41.4 114,793 39.2
Fuel and fuel taxes (4) 110,612 15.7 106,752 15.0
Depreciation and amortization 36,572 12.4 34,611 11.8
Insurance and claims 23,584 8.0 19,885 6.8
Operations and maintenance 19,127 6.5 16,296 5.5
Purchased transportation 13,528 4.5 16,234 5.5
Litigation verdict 2,967 1.0 -- --
Operating taxes and licenses 4,768 1.6 4,901 1.7
Communications and utilities 2,824 1.0 2,523 0.9
Gain on disposal of property
and equipment, net (303) (0.1) (498) (0.2)
Other 14,678 5.0 16,558 5.6
--------- ------ --------- -------
Total operating expenses 350,626 97.0 332,055 91.8
--------- ------ --------- -------
Operating income 8,957 3.0 23,896 8.2
Other expenses (income):
Interest expense 3,886 1.3 3,093 1.1
Other, net 22 -- (92) --
--------- ------ --------- -------
Total other expenses, net 3,908 1.3 3,001 1.1
--------- ------ --------- -------
Income before income taxes 5,049 1.7 20,895 7.1
Income tax expense 3,333 1.1 9,673 3.3
--------- ------ --------- -------
Net income $ 1,716 0.6% $ 11,222 3.8%
========= ====== ========= =======
Per share information:
Average shares outstanding
(Basic) 10,690 11,373
========= =========
Basic earnings per share $ 0.16 $ 0.99
========= =========
Average shares outstanding
(Diluted) 10,804 11,595
========= =========
Diluted earnings per share $ 0.16 $ 0.97
========= =========
The following tables include key operating statistics for the
nine-month periods indicated:
Trucking Operations
Nine Months Ended September 30, 2007
---------------------------------------
General Regional Dedicated Total
Freight Freight Freight Trucking
-------- -------- --------- --------
Total miles (in thousands)(5) 184,227 24,818 17,421 226,466
Empty mile factor(6) 11.2% 15.6% 2.3% 11.0%
Base Trucking revenue per
loaded mile $ 1.42 $ 1.55 $ 1.35 $ 1.43
Average number of tractors(7) 2,048 325 201 2,574
Average miles per tractor
per period 89,955 76,363 86,670 87,982
Average miles per tractor
per week 2,367 2,010 2,281 2,315
Average miles per trip(8) 911 496 496 787
Average unmanned tractor
percentage(9) 2.7% 4.4% 3.5% 3.0%
Base Trucking revenue per
truck per week $ 2,992 $ 2,629 $ 3,016 $ 2,948
Nine Months Ended September 30, 2006
---------------------------------------
General Regional Dedicated Total
Freight Freight Freight Trucking
-------- -------- --------- --------
Total miles (in thousands)(5) 180,671 16,607 19,173 216,451
Empty mile factor(6) 10.1% 13.0% 3.9% 9.7%
Base Trucking revenue per
loaded mile $ 1.44 $ 1.54 $ 1.36 $ 1.44
Average number of tractors(7) 2,052 212 229 2,493
Average miles per tractor
per period 88,046 78,336 83,725 86,823
Average miles per tractor
per week 2,317 2,061 2,203 2,285
Average miles per trip(8) 941 544 578 845
Average unmanned tractor
percentage(9) 3.9% 6.2% 9.7% 4.6%
Base Trucking revenue per
truck per week $ 2,994 $ 2,761 $ 2,886 $ 2,964
(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 Strategic Capacity Solutions (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)
September 30, December 31,
2007 2006
--------------- ----------------
Total assets $ 333,132 $ 339,494
Total equity 146,982 159,558
Total debt, including current
maturities 87,783 95,406
Debt to total capitalization
ratio(1) 37.4% 37.4%
(1) Total capitalization equals total equity plus total debt,
including current maturities.
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 improvements in our driver turnover, miles per tractor per week or safety performance. 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 Strategic Capacity Solutions (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.