USA Truck narrows Q4 loss to US$1.8M from year-ago loss of US$2.5M, as revenue rose 19.8% to US$102M on better freight environment, improved compliance with web freight network design
VAN BUREN, Arkansas
January 27, 2011
– USA Truck, Inc. (Nasdaq: USAK) today announced base revenue of $102.0 million for the quarter ended December 31, 2010, an increase of 19.8% from $85.1 million for the same quarter of 2009. We incurred a net loss of $1.8 million ($0.17 per share) for the quarter ended December 31, 2010, compared to a net loss of $2.5 million ($0.24 per share) for the same quarter of 2009.
Base revenue increased 16.7% to $386.9 million for the twelve months ended December 31, 2010 from $331.5 million for the same period of 2009. We incurred a net loss of $3.3 million ($0.32 per share) for the twelve months ended December 31, 2010, compared to a net loss of $7.2 million ($0.70 per share) for the same period of 2009.
In comparing the financial results of the quarter ended December 31, 2010 to the comparable period of 2009, Clifton R. Beckham, President and CEO of the Company, made the following statement:
"Improved operational execution pursuant to our VEVA (Vision for Economic Value Added) strategic plan led to our improved fourth quarter results with base revenue being improved 19.8% and loss per share being reduced 29.2%. For the year, we generated $9.4 million additional free cash flow (cash flow from operations less net cash used in investing activities) and at the end of the year, our balance sheet was strengthened with $4.1 million less debt and a lower total debt less cash to total capitalization ratio (40.8% compared to 42.1% at the end of 2009). We appreciate the commitment and hard work of our employees as we continue to post improved year-over-year results.
"In our Trucking operations, Base Trucking revenue per loaded mile improved $0.09 (6.4%), our empty mile factor declined to 10.1% (down 41 basis points) and loaded miles were up 3.3% (on 2.1% fleet growth, 10.3% load count growth and 0.6% better tractor utilization). We attribute these improvements to a slightly better year-over-year freight environment and to improved compliance with our Spider Web freight network design (46.3% of our fourth quarter 2010 loads moved in Spider Web lanes compared to 37.1% in the fourth quarter 2009). Spider Web loads moved during this quarter yielded an additional $0.23 of revenue per mile in price than loads moved in other lanes.
"We also produced substantial revenue growth in our asset-light services, which represented 15.2% of base revenue during the fourth quarter of 2010 compared to just 7.6% for the comparable period of the prior year. Base revenue in Strategic Capacity Solutions, our brokerage service offering, grew 142.9% to $10.1 million, and Intermodal base revenue increased 135.6% to $5.4 million.
"All of those improvements combined, however, were not enough to overcome three substantial cost headwinds that amounted to nearly $0.23 per share:
1. Increased fuel costs adversely impacted the quarter by approximately $0.05 per share, driven by a $0.41 per gallon increase in our average price at the pump. During the fourth quarter, the national average retail price of diesel fuel as reported by the U.S. Department of Energy rose during nine out of 13 weeks, including four consecutive weeks in December. Pursuant to agreements with our customers, we add a surcharge for excess fuel costs to our freight bills. While most of our contracts allow us to adjust the rate of that surcharge weekly based on the national average retail price of diesel fuel, there is a lag period. For example, this week's fuel surcharge rate is based on last week's national average diesel price. Thus, in periods of rising prices, our fuel surcharge is based on last week's lower diesel price while we are paying this week's higher diesel price at the pump.
2. An increase in claims activity during the quarter resulted in approximately $0.06 per share of additional insurance and claims expense.
3. We also experienced an increase of approximately $0.12 per share in equipment maintenance expense during the quarter. Our maintenance costs remain stubbornly high as a result of (a) our older in-service tractor and trailer fleets, which had an average age of approximately 27 and 66 months, respectively, compared to approximately 27 and 62 months at the end of 2009, (b) the preparation costs we incurred as a result of increased equipment sales, (c) our continuing efforts to improve our safety and compliance performance, and (d) an increase in the costs recorded for tires placed into service.
We have implemented a number of measures that we expect will eventually lower our overall maintenance costs. Several of our initiatives are already showing progress. We are realigning our maintenance network to provide repair and maintenance facilities consistent with our Spider Web freight network. We have also increased our maintenance staff and extended operating hours at high volume terminals in an effort to provide for better coverage of maintenance needs. Additionally, we have advanced our tractor trade cycle in order to retire older equipment and introduce new equipment into the fleet (including approximately 400 to 600 new tractors, as well as approximately 300 new trailers, in 2011).
"Our Trucking division is executing a detailed strategy during this winter's bid season to improve our network density in Spider Web lanes. We enter this bid season with more experience, better technology, more capable personnel and an even sharper focus on winning the right freight with the right customers. Our goal is to add 1,000 weekly Spider Web loads.
"Our Intermodal division has a similar focus. Last fall, we took possession of our first group of private intermodal containers, so we expect to continue to penetrate that market through both our existing customers and new ones. Our efforts are focused on a handful of lanes in which we can build density and minimize costs.
"Overall, we are not satisfied with our absolute results during the fourth quarter of 2010, but we are pleased with our progress. While the pace of that progress is not always as fast or as linear as we would like, our commitment is to long-term results as prescribed by our VEVA strategic plan."