USA Truck net income up 45% despite challenges in logistics segment

Building on positive financial trends in 2018, Van Buren-based USA Truck reported first quarter 2019 net income of $1.501 million, up 45% compared to the $1.035 million in the first quarter of 2018. It was the most profitable quarter for the shipping and logistics company since 2006.

The earnings per share of 18 cents missed the consensus estimate of 21 cents per share. However, adjusted net income related to severance costs and acquisitions pushed earnings per share to 24 cents.

Revenue during the first quarter was $133.974 million, up 7.16% compared to the $125.013 million in the 2018 quarter. The revenue missed the consensus estimate of $142.53 million.

The company posted 2018 net income of $12.204 million, better than what the market expected and ahead of the $7.497 million in 2017. Total 2018 revenue was $534.06 million, up almost 20% compared to $446.533 million in 2017.

“The first quarter of 2019 marks the 2nd consecutive first quarter of profitability and the most profitable first quarter since 2006. Add that to seven consecutive quarters of profitability, and our leadership team can drop the ‘new’ moniker – this team continues to improve results quarter after quarter and year after year,” USA Truck President and CEO James Reed said in the earnings report posted Thursday after the markets closed. “The first quarter was important in the making of USA Truck’s narrative about our ability to compete, our self-help story, and our position in the marketplace.”

The company said challenges in the quarter included falling spot market prices, a “continued challenging driver market,” higher fuel prices, and an “unusually difficult” winter.

Operating revenue in the trucking segment during the quarter was $94.902 million, well ahead of the $78.846 million in the same quarter of 2018. Operating income for the segment was $1.609 million, much better than the loss of $464,000 in the 2018 quarter.

Base revenue per available tractor per week was $129, up 4%, when compared to the first quarter of 2018. Base revenue per loaded mile was $2.244 for the first quarter of 2019, up 11.7% from $2.009 in first quarter 2018.

The average seated tractor count for the first quarter of 2019 was 1,767, up 15.2% compared to the first quarter 2018 average. However, the average number of unseated tractors was 7.8% compared to 5.3% in the first quarter of 2018.

“These changes were primarily related to the increasingly challenging driver recruiting environment, combined with the OEM equipment delays late last year,” the company noted in its statement.

Operating revenue in the logistics segment (USAT Logistics) during the quarter was $41.449 million, down from the $46.775 million in the same quarter of 2018. Operating income for the segment was $2.312 million, down 19% from the $2.856 million in the 2018 quarter.

USA Truck shares (NASDAQ: USAK) closed Thursday at $15.68. During the past 52 weeks the share price has ranged between $27.47 and $13.82.