USA Truck Announces Operating Results
20 July 1999
USA Truck Announces Operating Results
VAN BUREN, Ark.--July 19, 1999--USA Truck, Inc. (NASDAQ NMS: USAK) today announced record operating revenues of $38,117,504 for the quarter ended June 30, 1999, up 2.0% from $37,387,246 for the same quarter of 1998. Net income decreased 13.0% to $2,434,803 for the second quarter of 1999, compared to $2,798,077 for the second quarter of 1998, a decrease of 10.3% in diluted net income per share to $.26 from $.29.For the six months ended June 30, 1999, operating revenues increased 2.4% to $74,316,950, from $72,610,449 for the six months ended June 30, 1998. Net income decreased 7.3% to $4,758,920 for the six months ended June 30, 1999, compared to $5,135,794 for the six months ended June 30, 1998, a decrease of 5.6% in diluted net income per share to $.51 from $.54.
The following table summarizes USA Truck's earnings information:
June 30, June 30,
------------------------- -------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
Operating
revenues $38,117,504 $37,387,246 $74,316,950 $72,610,449
Operating
expenses
and costs:
Salaries,
wages and
employee
benefits 16,254,412 15,641,708 31,910,890 30,724,137
Operations
and
maintenance 8,915,103 8,607,191 17,258,532 17,010,292
Operating
taxes and
licenses 681,313 689,492 1,384,619 1,295,056
Insurance
and claims 1,952,991 1,810,916 3,591,077 3,488,310
Communications
and utilities 458,725 314,476 868,616 636,101
Depreciation
and
amortization 4,285,820 4,088,077 8,515,035 8,005,051
Other 1,282,513 1,056,972 2,365,113 2,043,772
----------- ----------- ----------- -----------
Total
operating
expenses
and costs 33,830,877 32,208,832 65,893,882 63,202,719
----------- ----------- ----------- -----------
Operating
income 4,286,627 5,178,414 8,423,068 9,407,730
Other
expenses,
net 282,016 598,909 595,896 1,002,174
----------- ----------- ----------- -----------
Income
before
income
taxes 4,004,611 4,579,505 7,827,172 8,405,556
Income
taxes 1,569,808 1,781,428 3,068,252 3,269,762
=========== =========== =========== ===========
Net income $ 2,434,803 $ 2,798,077 $ 4,758,920 $ 5,135,794
=========== =========== =========== ===========
Earnings
per share
(diluted) $ 0.26 $ 0.29 $ 0.51 $ 0.54
Average
shares
outstanding
(diluted) 9,410,475 9,531,054 9,423,291 9,478,162
Key Operating Statistics:
Quarter Ended Six Months Ended
March 31, March 31,
---------------------- -------------------------
1999 1998 1999 1998
---------- ---------- ----------- -----------
Total miles
(Loaded & Empty) 34,102,039 33,403,118 66,841,114 64,971,040
Empty mile factor 9.50% 9.99% 9.59% 10.13%
Revenue per mile $1.118 $1.119 $1.112 $1.118
Average number
of tractors 1,105 1,058 1,104 1,039
Miles per tractor 30,862 31,572 60,544 62,532
Average miles
per tractor
per week 2,449 2,506 2,403 2,481
Miles per trip 915 906 918 915
Number of shipments 33,745 33,203 65,829 63,844
Operating ratio 88.8% 86.1% 88.7% 87.0%
In comparing the financial results of the quarter ended June 30, 1999, to the quarter ended June 30, 1998, Robert M. Powell, President and CEO of the Company, said, "We are pleased that we were able to report a new record quarterly revenue amount, despite our problems with driver turnover. This is not to say we are satisfied with a 2% growth in revenue, because we are not. However, we are encouraged by the fact that despite an increase in driver recruitment related expenses of approximately 20% and an increase of approximately 5% in aggregate driver pay, we were able to produce a 88.8% operating ratio for the quarter."
"On April 14 of this year, we announced that we had developed a strategy to address each of three aspects of the driver problem - namely, 1) selection and recruiting, 2) training and 3) retention," said Mr. Powell. "Although we do not feel three months of success is a definite trend line, we are encouraged by the fact that we have had a net increase of 59 drivers to our fleet since that date. It should be noted that most of these additions occurred too late in the quarter to have any significant impact on our revenue numbers for this quarter."
Mr. Powell added, "The encouraging part of this increase of 59 drivers is that it represents a return to the 15% annualized fleet expansion rate we have experienced for most of the last ten years."
"Our `in training student count' is at 141 as of this date and we have increased our senior driver training fleet from 140 to approximately 200 trainers to handle a higher level of student activity," said Mr. Powell. "It also appears that our tuition reimbursement program that was put in place in mid March of this year has improved the quality as well as the quantity of new drivers hired."
The Company continues to experience strong cash flow, which is primarily net income plus depreciation and amortization. Our six-month performance, on an annualized basis, projects to a cash flow of approximately $26 million for the full year. The Company also reported that its stockholder equity grew $8.9 million, or 15.3%, to $66.6 million, as of June 30, 1999 compared to a year ago.
The Company's capital composition continues to improve. As of June 30, 1999, the Company's total capitalization of $89.2 million was comprised of $66.6 million (74.7%) in equity and $22.6 million (25.3%) in debt. A year ago at June 30, 1998, the Company's total capitalization of $88.1 million was comprised of $57.8 million (65.6%) in equity and $30.3 million (34.4%) in debt. The Company computes total capitalization as equity plus the long-term and current portions of long-term debt less cash, assuming that the cash was available to reduce the outstanding debt. This improvement was accomplished in spite of the fact that the Company repurchased 173,900 shares of its common stock at a cost of $1.6 million and purchased fixed assets of $17.5 million during this twelve-month period.
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.