USA Truck posts loss of $3.153 million for first half of 2016, cuts workforce and fleet size

Following two consecutive years of recovery, 2016 is shaping up to be a rough year for Van Buren-based USA Truck, with the company posting a $1.346 million loss in the second quarter and a $3.153 million loss for the first half of the year.

Company officials reported Wednesday (Aug. 3) the second quarter loss of $1.346 million, well off the $2.77 million gain in the second quarter of 2015. Second quarter operating revenue totaled $109.888 million, down from $133.573 million in the same quarter of 2015.

For the first six months of the year, the company posted a loss of $3.153 million, down from the $4.405 million gain in the same period of 2015. Revenue for the first half totaled $220.506 million, down 17.2% compared to the $266.46 million in the 2015 period.

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 President and CEO Randy Rogers said rapidly falling shipping rates hit the company in the quarter, with base revenue per loaded mile falling 9.1%.

“USA Truck’s results were negatively impacted by a rate environment that deteriorated markedly versus the prior year quarter, and by the lower volumes with certain dedicated customers,” Rogers said in the earnings statement.

Rogers again touted four initiatives announced earlier in the year as making progress toward improving financial results. Those areas 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.

In the high-cost equipment category, the company plans to reduce its fleet size by 130 tractors that are 2012 model trucks, and “accelerate retirement” of 220 2013 model trucks. The company also plans to halt truck purchases beyond existing commitments “until conditions improve.”

With respect to fewer employees, the company’s line item for salaries, wages and benefits fell to $63.201 million in the first half of 2016 from $73.508 million in the same period of 2015 – a 14% drop. Also, the company posted a $697,000 cost for employee severance costs in the second quarter of 2016, with no cost posted in the same quarter of 2015.

The company’s trucking segment posted a first half operating loss of $7.102 million compared to a $4.105 million gain in the same period of 2015. Operating revenue for the division in the first half of the year was $151.206 million, below the $189.214 million in the same period of 2015.

The USAT Logistics division posted operating income of $4.182 million in the first half, below the $6.235 million in the same period of 2015. Operating revenue in the first half was $69.3 million, down from $77.246 million in the same period of 2015.

Company officials said USAT Logistics boosted its load count by 12% despited the tough conditions. The company is also adding staff to the “asset-light” operation.

“In addition to adding eleven highly respected logistics professionals with strong industry relationships, the Company launched several initiatives it expects will drive further market share expansion, including the introduction of an outside sales agent program and expanding its flatbed service offering. The Company intends to aggressively pursue opportunities in this segment and grow the percentage of revenue attributable to the asset-light marketplace,” USA Truck officials noted in the earnings report.

USA Truck shares (NASDAQ: USAK) opened Wednesday at $17.69 and dropped below $16 in morning trading. During the past 52 weeks the share price has ranged from a $23.25 high to an $11.58 low.