USA Truck, Inc. Announces Operating Revenues
VAN BUREN, Ark.--Oct. 1, 20036, 2003--USA Truck, Inc. today announced operating revenues, before fuel surcharge, of $73,915,653 for the quarter ended September 30, 2003, an increase of 4.6% from $70,651,305 for the same quarter of 2002. Net income increased 18.8% to $1,510,141 for the third quarter of 2003, compared to net income of $1,271,086 for the same quarter of 2002. Diluted earnings per share for the quarter ended September 30, 2003 increased 14.3% to $0.16 compared to $0.14 for the same quarter of 2002.For the nine months ended September 30, 2003, operating revenues, before fuel surcharge, increased 5.3% to $211,895,040, from $201,221,745 for the same period of 2002. Earnings increased 6.7% to $2,214,892 for the nine months ended September 30, 2003, compared to $2,075,088 for the same period of 2002. Diluted earnings per share for the nine months ended September 30, 2003 increased 9.1% to $0.24 from $0.22 for the same period of 2002.
The following table summarizes the earnings information of the Company:
Quarter Ended Nine Months Ended
September 30, September 30,
------------------------- ------------------------
2003 2002 2003 2002
------------- ----------- ------------------------
Revenue:
Revenue, before
fuel surcharge $73,915,653 $70,651,305 $211,895,040 $201,221,745
Fuel surcharge 2,852,149 1,671,810 9,655,796 2,936,385
----------- ----------- ------------ ------------
Total revenues 76,767,802 72,323,115 221,550,836 204,158,130
Operating expenses
and costs:
Salaries, wages
and employee
benefits 26,747,365 27,138,295 79,707,315 81,009,783
Fuel and fuel
taxes 14,287,842 12,569,554 43,500,227 35,099,029
Purchased
transportation 6,442,726 7,409,328 18,533,455 18,887,875
Depreciation and
amortization 7,766,142 7,067,364 22,714,813 20,488,253
Operations and
maintenance 7,597,640 5,672,101 19,518,943 16,602,598
Insurance and
claims 5,181,988 4,643,859 15,477,813 12,496,613
Operating taxes
and licenses 1,163,181 1,131,138 3,371,126 3,249,394
Communications and
utilities 827,559 722,965 2,251,083 2,110,382
Other 3,278,923 2,553,001 9,571,762 7,137,581
----------- ----------- ------------ ------------
73,293,366 68,907,605 214,646,537 197,081,508
------------ ----------- ------------ ------------
Operating income 3,474,436 3,415,510 6,904,299 7,076,622
Other expenses
(income):
Interest expense 590,592 781,540 1,878,919 2,365,430
Gain on disposal
of assets (313,966) (97,866) (695,159) (108,194)
Other, net 18,503 (21,593) 71,396 (75,318)
------------ ----------- ------------ ------------
295,129 662,081 1,255,156 2,181,918
------------ ----------- ------------ ------------
Income before income
taxes 3,179,307 2,753,429 5,649,143 4,894,704
Income tax expense 1,669,166 1,482,343 3,434,251 2,819,616
------------ ----------- ------------ ------------
Net income $ 1,510,141 $ 1,271,086 $ 2,214,892 $ 2,075,088
============ =========== ============ ============
Per share
information:
Average shares
outstanding
(Basic) 9,329,705 9,315,007 9,324,240 9,297,587
============ =========== ============ ============
Basic net income
per share $ 0.16 $ 0.14 $ 0.24 $ 0.22
============ =========== ============ ============
Average shares
outstanding
(Diluted) 9,363,508 9,359,062 9,353,619 9,341,642
============ =========== ============ ============
Diluted net income
per share $ 0.16 $ 0.14 $ 0.24 $ 0.22
============ =========== ============ ============
Key Operating Statistics:
Quarter Ended Nine Months Ended
September 30, September 30,
------------------------- ---------------------------
2003 2002 2003 2002
------------ ------------ ------------- -------------
Total miles
(loaded & empty) 59,249,466 57,912,442 171,642,438 168,047,877
Empty mile factor 8.91% 8.92% 9.10% 9.41%
Revenue per
mile(a) $ 1.248 $ 1.220 $ 1.235 $ 1.197
Average number
of tractors 2,006 1,931 1,933 1,870
Miles per tractor 29,536 29,991 88,796 89,865
Average miles per
tractor per week 2,308 2,343 2,337 2,352
Miles per trip 857 861 856 859
Number of
shipments 71,971 65,598 207,897 188,146
Operating ratio(b) 95.3% 95.2% 96.7% 96.5%
(a) Revenue per mile as reported above is based upon revenue, before
fuel surcharge.
(b) Operating ratio as reported above is based upon total operating
expenses, before fuel surcharge, as a percentage of revenue,
before fuel surcharge.
In comparing the financial results of the quarter ended September 30, 2003 to the quarter ended September 30, 2002, Robert M. Powell, Chairman and CEO of the Company, made the following statement:
We continued to see improving freight demand throughout the quarter as evidenced by a favorable environment for increased rates per mile and low empty miles. Our top line revenue growth was driven by those increased rates (+2.3%) as well as a 3.9% increase in our fleet size. In fact, our average tractor count topped 2,000 for the first time during the third quarter. We were disappointed, however, with the 1.5% decline in tractor utilization brought about primarily by increased tractor downtime resulting from an older, more maintenance-intensive fleet and complications with the delivery of new tractors.
In general, we are pleased with the progress that we've made on the bottom line. While some of our cost control initiatives have yet to impact our operating margin, we can see their benefits beginning to take hold. The operating ratio was flat year over year, but this year's third quarter was negatively impacted in the areas of maintenance and recruiting costs. Those are both areas where we have programs in place that we expect to yield future savings.
Operations and maintenance costs have increased 34.0% due to significantly higher maintenance costs on the fleet. We elected not to trade tractors in 2002 due to the depressed used equipment market and the average age of the fleet therefore increased throughout 2002 and into the first quarter of 2003. In April of this year, we began trading tractors again and have reduced our average fleet age from its peak of 34 months in April to 28 months in September. Our goal is to lower that to approximately 21 months and we have a planned purchase and trade schedule designed to accomplish that by late 2004. Simultaneously, we intend to modernize a large portion of our trailer fleet in 2004. While both endeavors will require several quarters of time, slightly higher future depreciation charges and significant capital investment to complete, we anticipate a positive impact on our margins as a result.
Driver availability continues to tighten and driver turnover continues to be higher than historical levels. Thus far, however, we have been successful in hiring enough qualified drivers to substantially meet our goal of a 97.0% manned fleet. That success has come at a price. Other operating expenses have increased 28.4% primarily due to increased driver recruiting expenses. We are currently exploring regional operations in our existing freight lanes to facilitate more economical and efficient driver hiring and retention. We have also begun hiring and training drivers at multiple company locations around the country.
Freight volumes and consistency are improved, and we are confident that our fundamental operating factors are moving in a positive direction. We will closely monitor driver availability and general economic conditions as we move into the fourth quarter and into 2004.
By agreement with its customers, and consistent with industry practice, the Company adds a surcharge to its rates as diesel fuel prices increase above an industry-standard baseline price per gallon. Because fuel prices are volatile, management believes that presenting operating statistics calculated on the basis of total revenue, including the fuel surcharge, could provide a distorted picture of the Company's operating performance, particularly when comparing results for current and prior periods. Therefore, the fuel surcharge is excluded from revenue and, instead, taken as a credit against expense when calculating the operating ratio in the Key Operating Statistics table above. The surcharge is also excluded from revenue for purposes of calculating revenue per mile in that table. Revenue data, on both a total basis and excluding the fuel surcharge, is included in the earnings information table above.