USA Truck Announces Operating Results
15 April 1999
USA Truck Announces Operating Results
VAN BUREN, Ark.--April 14, 1999--USA Truck, Inc. (NASDAQ NMS:USAK) announced operating revenues of $36,199,447 for the quarter ended March 31, 1999, up 2.8% from $35,223,203 for the same quarter of 1998. Net income decreased 0.6% to $2,324,117 for the first quarter of 1999, compared to $2,337,717 for the first quarter of 1998, and diluted net income per share remained unchanged at $.25.The following table summarizes USA Truck's earnings information:
Quarter Ended
March 31,
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1999 1998
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Operating revenues $ 36,199,447 $ 35,223,203
Operating expenses and costs:
Salaries, wages and employee benefits 15,656,478 15,082,429
Operations and maintenance 8,343,429 8,403,101
Operating taxes and licenses 703,307 605,564
Insurance and claims 1,638,086 1,677,394
Communications and utilities 409,891 321,625
Depreciation and amortization 4,229,216 3,916,974
Other 1,082,599 986,800
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Total operating expenses and costs 32,063,006 30,993,887
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Operating income 4,136,441 4,229,316
Other expenses, net 313,880 403,265
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Income before income taxes 3,822,561 3,826,051
Income taxes 1,498,444 1,488,334
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Net income $ 2,324,117 $ 2,337,717
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Earnings per share (diluted) $0.25 $0.25
Average shares outstanding (diluted) 9,452,481 9,478,162
Key Operating Statistics:
Quarter Ended
March 31,
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1999 1998
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Total miles (Loaded & Empty) 32,739,075 31,567,922
Empty mile factor 9.69% 10.29%
Revenue per mile $1.106 $1.116
Average number of tractors 1,104 1,020
Miles per tractor 29,655 30,949
Average miles per tractor per week 2,354 2,456
Miles per trip 922 924
Number of shipments 32,084 30,641
Operating ratio 88.6% 88.0%
In comparing the financial results of the quarter ended March 31, 1999, to the quarter ended March 31, 1998, Robert M. Powell, President and CEO of the Company, said, "We are pleased to show continuing revenue growth compared to the first quarter of 1998. Our revenue growth this quarter resulted in part from the continued success of our expansion of our regular marketing team and new marketing efforts for our logistics services, dedicated fleet operations and private fleet conversions during 1999. Our volume of shipments to and from Laredo, Texas, our 'gateway' city on the U.S.-Mexico border, also increased due to expanded marketing efforts with shippers engaged in cross-border commerce."
"Despite the growth in revenues, our net income was down slightly compared to a year ago," said Mr. Powell. "This is due in large part to increased expenses incurred by the company as part of its ongoing efforts to address driver turnover, including an average 6% increase in total compensation for our drivers implemented in the fall of 1998 and a 4% increase in the costs of training new drivers. Driver turnover not only impacts our expenses, but it also affects revenues by limiting our ability to grow our fleet, because we must be careful not to purchase more tractors than we can staff with qualified drivers."
Driver turnover is a real problem in the truckload industry. The Company competes for qualified drivers, and for people capable of becoming qualified drivers, not only with other irregular route truckload carriers, but also with regular route truckload carriers, less-than-truckload carriers, local cartage companies, shippers with private fleets and the construction industry generally.
The large number of jobs currently available from these sources, combined with the fact that over-the-road, irregular route driving is a demanding job, makes it extremely difficult to attract and retain qualified drivers. In 1998, USA Truck hired and trained almost 1,200 drivers. Although many of the Company's drivers have been with USA Truck for many years, the large number of hires reflects the fact that a significant number of new hires leave the Company within just a few months. Accordingly, the Company must hire several drivers each year to fill a single position. The Company attributes these early departures primarily to unrealistic expectations on the part of the new drivers as to the difficulties associated with being away from home for extended periods and other aspects of the job.
"We have recently stepped up our efforts to address the turnover problem," said Mr. Powell. "We have developed a comprehensive strategy to address each of the three aspects of the problem -- namely, 1) selection and recruiting, 2) training and 3) retention." This strategy involves, among other things, increased driver pay; intensive recruiting and advertising efforts; expansion of relationships with driver training schools; continued improvements to the comfort, safety and performance of the equipment; and the implementation of technology designed to maximize drivers' time at home, enhance the speed of driver pay and provide real-time satellite and e-mail based communications in the cab.
Mr. Powell added, "We understand the magnitude of the driver turnover problem. Although turnover will always be a challenge in our industry, we believe that our efforts in this area, together with the staff and assets we have committed to these efforts, will help us control our driver turnover rate in future periods."
The Company also reported that its stockholder equity grew $10.5 million, or 18.7%, to $65.3 million, as of March 31, 1999 compared to a year ago.
This press release contains forward-looking statements. Among the key factors that are not within the Company's control and that may cause operating results to differ materially from those contemplated by such statements are increases in diesel prices, adverse weather conditions and the impact of increased rate competition and competition for qualified drivers, as well as various unforeseen events such as unusual levels of equipment failure or vehicle accident claims. Fluctuations in general economic conditions also may have a significant impact, as the Company's utilization rates are directly related to business levels of shippers in a variety of industries. See also the factors discussed in the Company's filings with the SEC under the Securities Exchange Act of 1934.
USA Truck is a medium haul, common and contract carrier specializing in truckload quantities of general commodities. The Company operates in the 48 contiguous United States and the Canadian provinces of Ontario and Quebec and in Mexico through the gateway city of Laredo, Texas.