USA Truck posts $2.9 million quarterly loss; revenues gain

Early signs of recovery in the national trucking industry have yet to help the bottom line of Van Buren-based USA Truck Inc., with the company citing rising diesel fuel prices and foul weather for recent losses.

The long haul trucker reported Thursday morning (April 22) total revenue in the first quarter of $105.63 million, up 12.9% over the same period in 2009. However, the company posted a $2.99 million loss in the first quarter of 2010, compared to a $1.9 million loss in the 2009 period.

The first quarter loss continues an unfortunate trend for the company. USA Truck reported a 2009 net income loss of $7.17 million compared to a gain of $3.14 million in 2008.

“Industry conditions, while still challenging, have improved. That improvement helped us make meaningful progress this quarter in pursuit of our VEVA (Vision for Economic Value Added) strategic plan; and, despite the earnings headwinds posed by surging diesel fuel prices and severe winter weather, we also experienced improved operational performance,” Clifton R. Beckham, USA Truck president and CEO, said in a statement.

Beckham said in January he believed industry conditions had bottomed out but that too much equipment continues to chase too little freight and “pricing pressures remain severe.”

Bob Costello, chief economist for the American Trucking Associations, said in late March that February tonnage was hurt by winter storms but freight demand is beginning to improve in a sector that has been in a funk since late 2006.

“Certainly it will take a while to make up the ground lost during the recession, but the industry is on the path to recovery,” Costello said in an ATA statement.

As they have in past quarterly reports, Beckham and USA Truck Chief Financial Officer Darron Ming continue to express optimism about the company’s future based on results of the VEVA strategy.

“Speaking metaphorically, we have carefully positioned our pieces across the chess board over the past few years, and believe we are ready to strike. All of our time and resources are now focused squarely on operational execution, and we are beginning to see results,” Beckham said in the earnings statement.

Those results include:
• The company posted its highest load count in company history during the quarter which drove loads per truck per week to a new high of 3.24 turns;
• Tractor utilization, as measured by miles per truck per week, improved 1.5% to 2,040 miles;
• Empty miles as a percentage of total miles improved 1.3 percentage points, and the lower empty mile factor helped push base revenue per total mile up 3.9% to $1.35, another all-time company high; and,
• New uses of technology and a new division of labor allowed several of the company’s nine geographic regions to enjoy 7% to 11% operating margins during the period.

“The pattern of earnings throughout the quarter is indicative of both the weather’s impact and of our strategic progress,” Beckham said in the statement. “We posted losses in January and February followed by earnings in March. We believe that improving demand, tightening capacity and the maturation of our strategic plan combined to make March an inflection point for our performance. As such, we are pleased to have this quarter in the rearview mirror and look forward to more operational progress in the quarters to come.”

Possibly the best news for USA Truck in this tough credit environment was in reaching a new credit agreement with Winston-Salem, N.C.-based BB&T Corp. The new deal gives USA Truck a $100 million credit line — with a possible $75 million increase — that extends through April 19, 2014.

The company will need the financial backing, especially with cash and cash equivalents of just $828,000 at the end of the quarter.

Total debt increased in the quarter from $103.6 million to $118 million, largely the result of a $19.2 million purchase of 191 tractors manufactured before Dec. 31, 2009. New government rules require tractors made after Jan. 1, 2010 to meet new emission standards, and most trucking companies are buying 2009 models to avoid the expected higher maintenance costs on the new 2010 models.

The thinly traded shares of USA Truck (NASDAQ: USAK) closed Wednesday at $17.61. During the past 52 weeks, the share price has ranged from a $17.75 high to a $10.78 low.

Fort Smith-based Arkansas Best Corp., a less-than-truckload freight hauler, is scheduled to report quarterly earnings Friday (April 23) morning.