USA Truck, Inc. Announces Operating Results
19 October 1999
USA Truck, Inc. Announces Operating Results
VAN BUREN, Ark.--Oct. 19, 1999--USA Truck, Inc. (NASDAQ NMS: USAK) today announced record operating revenues of $40,416,850 for the quarter ended September 30, 1999, up 11.4% from $36,266,931 for the same quarter of 1998. Net income decreased 40.1% to $1,688,989 for the third quarter of 1999, compared to $2,822,007 for the third quarter of 1998, a decrease of 40.0% in diluted net income per share to $.18 from $.30.For the nine months ended September 30, 1999, operating revenues increased 5.4% to $114,733,801 from $108,877,380 for the nine months ended September 30, 1998. Net income decreased 19.0% to $6,447,909 for the nine months ended September 30, 1999, compared to $7,957,802 for the nine months ended September 30, 1998, a decrease of 17.9% in diluted net income per share to $.69 from $.84.
The following table summarizes USA Truck's earnings information:
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Quarter Ended Nine Months Ended
September 30, September 30,
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--------------------------- -------------------------
1999 1998 1999 1998
-------------- ------------ ------------ ------------
Operating revenues $ 40,416,850 $ 36,266,931 $114,733,801 $108,877,380
Operating expenses
and costs:
Salaries, wages
and employee
benefits 17,226,077 15,067,522 49,136,967 45,791,659
Operations and
maintenance 10,568,323 8,389,124 27,826,856 25,399,416
Operating taxes
and licenses 664,956 633,155 2,049,575 1,928,211
Insurance and
claims 2,111,627 1,646,942 5,702,704 5,135,251
Communications
and utilities 543,748 396,216 1,412,364 1,032,317
Depreciation
and amortization 4,359,715 4,124,730 12,874,750 12,129,781
Other 1,855,864 955,532 4,220,977 2,999,304
------------- ------------- ------------ -----------
Total operating
expenses and
costs 37,330,310 31,213,221 103,224,193 94,415,939
------------- ------------- ------------ -----------
Operating income 3,086,540 5,053,710 11,509,608 14,461,441
Other expenses,
net 308,597 435,041 904,493 1,437,215
------------- ------------- ------------ -----------
Income before
income taxes 2,777,943 4,618,669 10,605,115 13,024,226
Income taxes 1,088,954 1,796,662 4,157,206 5,066,424
============= ============= ============ ===========
Net income $ 1,688,989 $ 2,822,007 $ 6,447,909 $ 7,957,802
============= ============= ============ ===========
Earnings per
share (diluted) $0.18 $0.30 $0.69 $0.84
Average shares
outstanding (diluted) 9,335,972 9,512,954 9,408,583 9,478,162
Key Operating Statistics:
Quarter Ended Nine Months Ended
September 30, September 30,
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------------------------ -------------------------
1999 1998 1999 1998
------------ ------------ ------------ -----------
Total miles
(Loaded & Empty) 36,028,847 32,448,623 102,869,961 97,419,663
Empty mile factor 9.32% 9.54% 9.50% 9.93%
Revenue per mile $1.122 $1.118 $1.115 $1.118
Average number
of tractors 1,134 1,085 1,114 1,054
Miles per tractor 31,771 29,907 92,343 92,429
Average miles per
tractor per week 2,482 2,336 2,430 2,432
Miles per trip 905 905 913 911
Number of shipments 36,114 32,423 101,943 96,267
Operating ratio 92.4% 86.1% 90.0% 86.7%
-0- In comparing the financial results of the quarter ended September 30, 1999, to the quarter ended September 30, 1998, Robert M. Powell, President and CEO of the Company, said, "a few months ago we said we were working to solve the problem with unassigned tractors and get back to our historical revenue growth rate. I am very pleased to report revenue growth of 11.4% this quarter compared to the same quarter last year. Now that our recruiting and training efforts are producing the number of drivers we need to replace lost drivers and grow our fleet, we will turn our attention to managing the costs of these processes. The additional recruiting and training cost to replace lost drivers plus grow the fleet has cost us 2.25 percentage points in operating ratio this quarter compared to the third quarter of 1998. Reducing this cost is a process of identifying and eliminating the expenses where the yield is poor."
"Fuel costs have leveled off the last three weeks after a 90-day run up in price of about 15 cents per gallon. When compared to the same quarter last year, this increase in fuel cost, offset by a small improvement in miles per gallon, cost us 2.25 percentage points in operating ratio."
"During the third quarter, our marketing department began the process of adjusting rates upward to cover fuel, recruiting and other cost increases. Many rates have been adjusted but most of them were not effective until late in the quarter or on October 1, 1999. At this point it is not possible to quantify their success."
Mr. Powell continued, "we are excited about the prospect of additional tractor capacity and business acquired through the proposed acquisition of the assets of CCC Express, which will add about 45 percent to our tractor count. On September 30, 1999, we announced the signing of a letter of intent on the CCC Express acquisition and due diligence is in progress at this time. We currently expect to close the transaction by the end of October or early part of November. The CCC Express acquisition will be accomplished by the assumption of $7 million in equipment notes, the refinancing of $27 million in equipment notes and the payment of approximately $3 million in cash."
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. Also, among the key factors that are not within the Company's control and that may cause the proposed acquisition described in this press release not to be consummated include the inability of the parties to reach final agreement on various issues, the failure of any of the conditions to closing referred to in this press release or that may be set forth in an agreement between the parties and material adverse changes in the assets, business or financial condition of the parties. If the proposed acquisition is consummated, among the key factors that are not within the Company's control and that may prevent the Company from realizing the anticipated benefits of the acquisition include difficulties integrating the acquired assets or operations and unanticipated problems with the operating systems, revenue equipment or other assets of the acquired operations, as well as the inability of USA Truck to retain the customers of CCC Express or to maintain historical utilization rates with a significantly larger number of tractors than USA Truck has previously operated.
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.