USA Truck posts $10.77 million loss in 2011

Van Buren-based USA Truck posted a 2011 net income loss of $10.777 million, more than triple the loss during 2010 and in a year when other trucking companies are beginning to see improved financials.

2011 marks the third consecutive year of a losses for USA Truck. In 2010, the company reported a loss of $3.308 million, and a $7.177 million loss in 2009.

Total revenue during 2011 was $519.408 million, up 12.87% compared to 2010. Revenue during the fourth quarter was $126.202 million, just ahead of $122.090 million during the 2010 period.

During the fourth quarter the company posted a loss of $4.354 million, a greater hit than the fourth quarter 2010 loss of $1.797 million.

Also, the per share losses of 42 cents during the fourth quarter and $1.05 for the year were much higher than the 21 cents loss and the 77 cents loss, respectively, expected by Wall Street.

However, the market for the thinly traded shares responded positively. Shares of USA Truck (NASDAQ: USAK) closed trading Monday at $8.94, up 25 cents. In the last 52 weeks, the company’s shares have ranged from a $13.49 high to a $6.75 low.

SERVICE, ACCOUNT PROBLEMS
Continued problems with providing service — resulting from a third quarter disaster in the implementation of new software — and the loss of two major accounts were cited as reasons for the disappointing results. The problems have also created more turnover in the company’s driver corps.

“The service failures and lack of confidence in booking freight caused us to lose a percentage of our loads with many customers, often the most operationally demanding, highest paying loads,” USA Truck CEO Cliff Beckham said in the earnings statement. “Compounding this situation, we phased out service on two major accounts, one due to the end of a project and one due to inadequate pricing. Although we did not expect to have this freight long-term, replacing approximately 6.2% of our loads in one quarter has depressed our utilization and our rate structure while we replace the freight.  These problems and the resulting lower miles also accelerated turnover in our driver base.”

The company, which financially operates primarily through credit agreements, reported $8.9 million available under a revolving agreement with $54 million available for equipment purchases. Darron Ming, chief financial officer for USA Truck, also reported that the company was able to use cash flow to reduce debt by $8.7 million compared to the third quarter. He also reported efforts to secure future credit arrangements.

"(I)n response to the current economic environment, we are currently in discussions with the Administrative Agent of our Credit Agreement in an effort to revise some of our debt covenants, which we believe will allow us more flexibility as we implement our action plan. We expect to have those revisions completed during the first quarter of 2012,” Ming noted in the statement.

WEBS, DIRECTOR ADDITION
Beckham said efforts by David Hartline show results that should help the company once the service and software issues are resolved. Hartline, an industry veteran with more than 20 years experience, was hired as the company’s chief operations officer in August 2011 to help the company execute a new strategic plan. Part of that plan include “Spider Web,” an effort to focus on enhancing and adding routes that generate more revenue per mile.

“Spider Web 2.0 draws on the experience of Mr. Hartline's team to narrow our operational focus to less than 1,000 lanes, targeting specific regional markets in which to build freight density,” Beckham noted. “Under a fresh philosophy and more effective methods introduced by new driver recruiting leadership, we have posted steady improvements in our unmanned tractor count.

Beckham also said Robert A. Peiser has been added to the board of directors. The USA Truck statement touted Peiser as having “broad-based executive, director and management experience with companies in transition in a variety of domestic and international industries” recently joined the board of directors.

Peiser holds an master’s degree in finance and management control from Harvard University and a bachelor’s degree in economics from the University of Pennsylvania.