Falling revenue from weak demand and some one-time items doomed USA Truck’s third quarter profitability.
The Van Buren-based trucking firm posted a third quarter net loss of $6.4 million, a big uptick from one year ago when the company posted a $4.3 million quarterly loss.
USA Truck cited costs related to increases in accrued reserves for workers’ compensation and health claims and a write off of deferred debt issuance costs associated with its prior credit facility for the quarterly loss.
For the first 9 months of 2012, USA Truck is $14.4 million in the red.
Revenues in the third quarter declined 2.3% to $100.3 million for the quarter ended September 30, 2012. For the first nine months of the year, base revenue is down 2.9% to $301.7 million.
“Freight demand was relatively weak overall for a third quarter and we did not experience the level of increase in freight volumes during the quarter that we normally expect. We attribute this to slower growth in the United States economy, a slight contraction in manufacturing activity, and one fewer business day than in the 2011 quarter,” said CEO Clif Beckham.
“In addition to tepid demand, fuel prices increased for much of the quarter negatively impacting our results both sequentially and year-over-year. Shippers remain concerned about adequate truckload capacity over the medium to longer term, but the short-term environment was less supportive of rate increases than in recent quarters. Drivers remain difficult to attract and retain, requiring increased expense and focus despite the somewhat slower demand environment. In response to the more difficult environment, we maintained our fleet at 160 fewer trucks compared with the third quarter of 2011, increased the percentage of our business conducted through our SCS segment, refinanced into a more flexible credit facility, and concentrated on seating trucks and refining our freight network,” Beckham added.
USA Truck (NASDAQ: USAK) shares closed trading Friday at $2.93. The company’s stock has traded between $2.80 and $3.17 during the past year.