An almost $3 million one-time charge tied to restructuring costs pushed quarterly earnings for USA Truck to a $734,000 loss, a wide swing from the $2.727 million gain in the same quarter of 2015.
The per share loss of 9 cents missed the 9 cents per share gain consensus estimate of the four investment analysts who cover the company. Total revenue in the quarter was $105.458 million, below the $123.49 million in the same quarter of 2015.
For the first nine months of 2016, the Van Buren-based company has posted a loss of $3.887 million, a more than $11 million gap compared with the $7.132 million in net income during the same period of 2015. Total revenue in the first nine months is $325.964 million, below the $389.95 million in the same period of 2015.
USA Truck President and CEO Randy Rogers said a tough operating environment and loss of key customers offset gains in boosting the company’s logistics and freight brokerage business.
“We marked significant progress toward our goals of expanding the scope of USAT Logistics, improving service levels in our truckload business and reducing operating costs in the third quarter. Those gains were, and for the near term will likely be, offset by a weak freight environment and unfavorable comparisons versus prior periods due to the loss of certain dedicated account customers earlier this year,” Rogers said in the earnings report posted Friday morning (Nov. 4).
The four initiatives pursued by the company to improve financials are: Accelerated disposal of high cost equipment; Expanded focus on cost control, including a reduction in force in the second quarter; Continued refinement of its network to build greater density, aided by a lower fleet size; and Continued growth of USAT Logistics market share as demonstrated by increased load count in the quarter.
Rogers and his management team have a goal of the logistic division accounting for 50% of the company’s total revenue. In the third quarter the division generated 30.4% of total revenue.
Following are some of the items Rogers listed as improvements during the quarter.
• Gross margin “remained favorable” at 18.1% in USAT Logistics division, although net revenue in the quarter was down 16.1%.
• The loaded rate per mile rose slightly to $1.725, and operations and maintenance costs per mile fell 4.3% to 18.2 cents per mile.
• The number of company-owned tractors fell by 6.3% with removal of less efficient 2012 and 2013 tractors.
The national freight economy is struggling. September shipments were down 3.1%, and freight expenditures fell 3.8% compared to the same period in 2015, according to the Cass Freight Index. Cass uses data from $26 billion in annual freight transactions to create the Index. The data comes from a Cass client base of more than 350 large shippers. The American Trucking Associations’ For-Hire Truck Tonnage Index fell 5.8% in September, following a downwardly revised 5% rise in August. Year-to-date, compared with the same period in 2015, tonnage was up 3% at the end of September.
USA Truck, a truckload shipping and logistics company, ended 2015 on a high note. The company pulled together two consecutive years of growth, with full year 2015 net income reaching $11.069 million, up 76.1% compared to 2014 net income.
USA Truck shares (NASDAQ: USAK) closed Thursday at $8.70. During the past 52 weeks the share price has ranged from a $21.46 high to an $7.77 low.