USA Truck posts net income loss in 2019, revenue down 2.14%

USA Truck on Thursday (Jan. 30) posted a 2019 net loss of $4.698 million, a wide swing from the $12.204 million gain in 2018. Total revenue in 2019 was $522.631 million, down 2.14% compared to the $534.06 million in 2018.

Fourth-quarter revenue was $124.111 million, below the $141.083 million in the same period of 2018. The Van Buren-based shipping and logistics company posted a fourth quarter income loss of $4.827 million, well off the $5.325 million gain in the same quarter of 2018.

USA Truck President and CEO James Reed said the company’s results are primarily from lower prices and a supply-demand imbalance in the national trucking sector.

“Our results were meaningfully impacted by the difficult freight market during the fourth quarter of 2019. The soft spot market and widely reported supply-demand imbalance affected both our contract and spot market opportunities during the quarter. Market rates remained pressured during the quarter and shippers allocated large portions of their freight spend to the lowest cost alternatives,” Reed said in the earnings report. “Adding to the near term pressures were organizational changes we expect will enhance our business in the long term, but which resulted in our experiencing the effects of a tough market more severely than our peers.”

The company’s trucking segment posted 2019 revenue of $375.657 million, up 8% from $347.729 million in 2018. The segment posted an operating income segment loss of $447,000, compared to an $11.71 million gain in 2018.

Logistics segment revenue for the year totaled $146.974 million, below the $186.331 million in 2018. Net income in the segment during 2019 was $2.762 million, down from $9.509 million in 2018.

Transportation analyst Jack Atkins and associate Wade Schaller, with Little Rock-based Stephens Inc., noted in a Jan. 27 investor note that USA Truck faced setbacks in 2019 because of challenging market conditions and “missteps in the company’s bid strategy early in the year.” The two analysts said they were optimistic the carrier will perform better in 2020 as the company reduces its exposure to spot market pricing and puts more capacity under contract.

The company said it cut the non-driver employee count by 8% in the fourth quarter to control costs “to help offset the significant market headwinds.” The company said it is also closer to opening four regional service centers/terminals. An Atlanta facility will open in the first quarter of this year, a Carlisle, Pa., terminal will open in the second quarter, and a Dallas terminal open later in the year. The company has said the regional terminals will help reduce costs and improve operational efficiencies.

Following are other items mentioned in the earnings report.
• Base revenue per loaded mile decreased 9.1% year over year. This change was the result of increased pressure in the year-over-year spot market and lower participation in expected normal seasonal surge opportunities in the fourth quarter.
• The average seated tractor count for the fourth quarter of 2019 was 1,815, a 2.8% increase compared to the fourth quarter 2018 average of 1,766.
• Average unseated tractor percentage for the fourth quarter 2019 was 6.9%, up from the 6.3% for the fourth quarter of 2018.
• Revenue per load fell 20%, or $326 per load year over year.
• Load count decreased by approximately 5.5%, or 1,500 loads year over year.

Shares of USA Truck (NASDAQ: USAK) closed Thursday at $7.10, down 14 cents or 0.4%. In the past 52 weeks, the stock has ranged between $20.93 and $6.98.