USA Truck Inc. Announces Record Quarterly Base Revenue
VAN BUREN, Ark.--Oct. 2, 20050, 2005--USA Truck, Inc. today announced record quarterly base revenue of $95.5 million for the quarter ended September 30, 2005, an increase of 11.9% from $85.4 million for the same quarter of 2004. Net income increased 106.0% from $2.0 million for the quarter ended September 30, 2004, to $4.2 million for the same quarter of 2005. Diluted earnings per share increased 81.8% from $0.22 for the quarter ended September 30, 2004, to $0.40 for the same quarter of 2005.Base revenue increased 11.5% from $250.7 million for the nine months ended September 30, 2004 to $279.5 million for the same period of 2005. Net income increased 157.4% from $4.4 million for the nine months ended September 30, 2004 to $11.3 million for the same period of 2005. Diluted earnings per share increased 142.6% from $0.47 for the nine months ended September 30, 2004 to $1.14 for the same period of 2005.
The following table summarizes the earnings information of USA Truck, Inc. ("Company"):
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
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2005 2004 2005 2004
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Revenue:
Base revenue $ 95,548 $85,419 $279,525 $250,726
Fuel surcharge revenue 17,607 6,949 42,086 16,879
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Total revenue 113,155 92,368 321,611 267,605
Operating expenses and costs:
Salaries, wages and employee
benefits 36,323 32,435 105,959 94,160
Fuel and fuel taxes 32,495 21,000 86,338 58,163
Depreciation and amortization 10,576 9,300 30,788 26,544
Purchased transportation 6,515 7,570 19,053 22,019
Insurance and claims 5,844 5,698 18,217 18,905
Operations and maintenance 5,334 5,858 15,808 19,434
Operating taxes and licenses 1,563 1,449 4,614 4,249
Communications and utilities 828 855 2,370 2,295
Gain on disposal of revenue
equipment, net (219) (688) (900) (788)
Other 5,053 3,847 14,515 10,861
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Total operating expenses 104,312 87,324 296,762 255,842
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Operating income 8,843 5,044 24,849 11,763
Other expenses (income):
Interest expense 1,202 955 3,928 2,443
Other, net 24 (1) 23 9
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Total other expenses, net 1,226 954 3,951 2,452
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Income before income taxes 7,617 4,090 20,898 9,311
Income tax expense 3,396 2,041 9,608 4,926
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Net income $ 4,221 $ 2,049 $ 11,290 $ 4,385
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Per share information:
Average shares outstanding
(Basic) 10,270 9,237 9,603 9,280
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Basic earnings per share $ 0.41 $ 0.22 $ 1.18 $ 0.47
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Average shares outstanding
(Diluted) 10,590 9,396 9,899 9,388
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Diluted earnings per share $ 0.40 $ 0.22 $ 1.14 $ 0.47
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Key Operating Statistics:
Three Months Ended Nine Months Ended
September 30, September 30,
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2005 2004 2005 2004
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Total miles (in thousands)
(1) 71,598 65,586 212,646 193,863
Empty mile factor (2) 8.7 % 8.3 % 8.7 % 8.3 %
Base revenue per total mile $ 1.335 $ 1.302 $ 1.315 $ 1.293
Average number of tractors
(3) 2,371 2,228 2,320 2,169
Average miles per tractor 30,197 29,437 91,658 89,379
Average miles per tractor
per week 2,359 2,300 2,412 2,340
Average miles per trip (4) 798 839 802 839
Operating ratio (5) 90.7 % 94.1 % 91.1 % 95.3 %
Average unmanned tractor
percentage (6) 5.1 % 3.8 % 3.7 % 5.0 %
(1) Total miles include both loaded and empty miles.
(2) The empty mile factor is the number of miles traveled between
loads as a percentage of total miles traveled.
(3) Average number of tractors includes Company-operated tractors plus
owner-operator tractors.
(4) Average miles per trip is based upon loaded miles divided by the
number of shipments using Company-operated and owner-operator
tractors (it does not include third party logistics and freight
brokerage shipments).
(5) Operating ratio is based upon total operating expenses, net of
fuel surcharge revenue, as a percentage of base revenue.
(6) Average unmanned tractor percentage is the average percentage, for
each month end during each period, of Company-operated tractors to
which a driver is not assigned.
In comparing the financial results of the three months ended
September 30, 2005 to the three months ended September 30, 2004,
Robert M. Powell, Chairman and CEO of the Company, made the following
statement:
Demand for freight services improved throughout the quarter from
an inconsistent level in July to a very robust environment in
September. We were able to capitalize on the latter to improve
miles per tractor per week by 2.6% and achieve a 2.5% increase in
freight rates for our services. These improvements allowed us to
grow our base revenue nearly 12% during the quarter on just a
6.4% increase in our fleet size. Base revenue per mile for our
traditional freight operations in which we used our own tractors
increased by 4.2%.
We are continuing to see success with our benchmarking program,
through which we identify opportunities to improve our operating
ratio to meet our 88% target. Under this program, we have worked
very hard to improve miles per tractor per week, fleet
maintenance expense and insurance and claims expense over the
past several quarters. All three of these factors contributed to
this quarter's 90.7% operating ratio, which was 3.4% of base
revenue better than the comparative quarter.
Our General Freight division, which represented 79% of this
quarter's base revenue, produced a sub-90% operating ratio during
the quarter. We are working hard to not only drive General
Freight's operating ratio down even further, but also to improve
the margins in our USA Logistics and Regional Freight divisions.
While those two divisions were profitable during the quarter,
they still offer significant opportunities for margin improvement
as we focus more attention and resources on them in the coming
quarters.
We continue to face high oil prices and the tightening supply of
qualified drivers. We believe that we have programs in place to
manage both of these challenges, but the programs are expensive
and will require a great deal of management focus and discipline.
Also, on August 17, 2005, we issued and sold in an underwritten
follow-on public offering, 2,000,000 shares of Common Stock. The
offering generated net proceeds to us of approximately $47.3
million. We used the proceeds to repay outstanding borrowings
under our senior credit facility.
We are pleased with the consistency of our results in recent
quarters, and we look forward to further executing our
benchmarking initiatives in the quarters to come.
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 maintain the tractor utilization rates and revenue per mile discussed in this press release, or that we will be able to continue to improve or effectively control operations and maintenance expenses and insurance and claims costs or effectively manage our fuel surcharge program. 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 business levels of 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 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 medium haul, dry van truckload carrier transporting general commodities throughout the continental United States and into and out of portions of Canada. We transport general commodities into Mexico by allowing through-trailer service on our trailers through our facility in the gateway city of Laredo, Texas. We also provide complementary third-party logistics and freight brokerage services for a diverse customer base.