- 3Q17 net income of $0.4 million, or
$0.05 per diluted share, versus 3Q16 net loss of
($0.7) million, or ($0.09) per diluted share; first profitable
quarter since 2015
- 3Q17 consolidated operating revenue
increased 8.3% to $114.2 million from $105.5 million in 3Q16;
first positive year-over-year change in quarterly revenue
since 2014
- Sequential progress in key measures
during 3Q17, including base revenue per loaded mile,
base revenue per seated tractor, deadhead percentage, and
average unseated tractor count
- Company expects sequential and
year-over-year improved financial performance in 4Q17
USA Truck, Inc. (NASDAQ:USAK), a leading capacity solutions
provider, today announced its financial results for the three and
nine months ended September 30, 2017.
For the quarter ended September 30, 2017, consolidated operating
revenue was $114.2 million compared to $105.5 million for the
prior year period. Base revenue, which excludes fuel surcharge
revenue, was $102.4 million compared to $94.7 million for the 2016
period. The Company reported net income of $0.4 million, or
$0.05 per diluted share for the third quarter of 2017, compared to
a net loss of ($0.7) million, or ($0.09) per diluted share,
for the same quarter in 2016. The Company’s third quarter 2017
consolidated operating ratio was 98.4%, improved from 100.0% in the
third quarter 2016.
President and CEO James Reed commented, “We believe these
results show that we are capable of making and keeping our
commitments to progress. I personally thank the whole team at USA
Truck for their shared commitment to these results. We expect to
improve results through disciplined network management and pricing,
enhanced partnership with customers, and improved execution in our
day-to-day operations, in conjunction with our ongoing safety
initiatives. While we are pleased to report positive net income, it
is important for all of us to recognize that the turnaround is
still in its beginning stages and our expectations are for further
improvement throughout 2018.”
Trucking: For the third quarter of 2017, Trucking operating
revenue increased $3.1 million, or 4.2%, year-over-year, to $76.5
million, compared to third quarter of 2016. This was primarily due
to a 7.6% increase in base revenue per loaded mile, partially
offset by a 4.2% decrease in loaded miles. Trucking operating loss
was ($1.2) million for the 2017 period compared to ($1.5) million
for the 2016 period. This loss was primarily driven by the
combination of rising fuel costs throughout the quarter, elevated
driver recruiting expenses, and underutilization of our tractors
relative to desired levels; however, these headwinds were offset by
our improving yield, as we continue to work on refining the
network.
We remain intensely focused on improving Trucking operating
results, and driving operational improvements with the goal of
positioning us for long-term success. The following areas are
specific areas of focus for our Trucking operations:
- Yield improvements: We have seen our
base rate per loaded mile increase 7.6% to $1.856 in 3Q17 from
$1.725 in 3Q16 and a 5.3% increase sequentially over 2Q17,
indicating that our network engineering initiatives have begun to
take hold. The hurricanes in Texas and Florida positively impacted
this rate increase by approximately $0.01, primarily due to
repositioning of empty trucks related to the freight imbalance in
the affected areas.
- Base revenue per seated tractor
increased $130 per week, or 4.3% when compared to 3Q16, and $81 per
week, or 2.7% when compared to 2Q17.
- Miles per seated tractor per week
decreased 82 miles per tractor, or 4.1%, when compared to 3Q16, and
63 miles per tractor, or 3.2%, sequentially over 2Q17. However,
deadhead percentage for 3Q17 improved by 90 basis points when
compared to 3Q16 and 50 basis points sequentially over 2Q17.
- Seated tractors: Our average unseated
tractor percentage for 3Q17 was 6.5%, which represents a 150 basis
point sequential improvement. The average seated tractor count was
1,628, which represented a 5.2% increase over our 4Q16 average of
1,547. The driver market continues to be challenging, and remains a
significant area of emphasis throughout the organization.
Drive gross margin of USAT Logistics: USAT Logistics operational
performance continued to improve throughout 3Q17. Operating revenue
was $37.8 million, up 17.7% versus 3Q16 and up 5.5% sequentially
over 2Q17. Gross margin increased 130 basis points to 20.2%
compared to 18.9% in 3Q16. USAT Logistics saw higher quarterly
volumes when compared to the same period last year, driven
primarily by increased spot market freight due to favorable
movement in industry demand relative to capacity. While this market
dynamic has been a positive one for USAT Logistics, we remain
committed to our plan of building strong long-term customer
relationships through superior service and competitive pricing.
Segment Results
The following table includes key operating results and
statistics by reportable segment:
Three Months Ended Nine Months Ended September 30,
September 30,
Trucking: 2017 2016
2017
2016 Operating revenue (in thousands)
$ 76,450
$ 73,367
$ 218,275 $ 224,573 Operating loss (in
thousands) (1)
$ (1,194 ) $ (1,505 )
$
(13,165 ) $ (8,607 ) Operating ratio (2)
101.6
% 102.1 %
106.0 % 103.8 % Adjusted operating
ratio (3)
101.8 % 102.3 %
106.6 % 101.5
% Total miles (in thousands) (4)
41,081 43,365
122,365 132,216 Deadhead percentage (5)
12.3 %
13.2 %
12.8 % 12.8 % Base revenue per loaded mile
$ 1.856 $ 1.725
$ 1.787 $ 1.743 Average
number of in-service tractors (6)
1,742 1,742
1,722
1,797 Average number of seated tractors (7)
1,628 1,648
1,591 1,717 Average miles per seated tractor per week
1,920 2,002
1,972 1,967 Base revenue per seated
tractor per week
$ 3,127 $ 2,997
$
3,074 $ 2,992 Average loaded miles per trip
546 590
561 582
USAT Logistics: Operating revenue (in
thousands)
$ 37,785 $ 32,091
$ 104,988
$ 101,391 Operating income (in thousands) (1)
$ 2,998
$ 1,547
$ 5,604 $ 5,729 Gross margin (in thousands)
(8)
$ 7,619 $ 6,050
$ 19,598 $ 19,481
Gross margin percentage (9)
20.2 % 18.9 %
18.7
% 19.2 %
(1) Operating income (loss) is calculated by deducting operating
expenses from operating revenue.
(2) Operating ratio is calculated as operating expenses as a
percentage of operating revenue.
(3) Adjusted operating ratio is calculated as operating expenses
less restructuring, impairment and other costs, and severance costs
included in salaries, wages and employee benefits, net of fuel
surcharge revenue, as a percentage of operating revenue excluding
fuel surcharge revenue. See GAAP to non-GAAP reconciliations
below.
(4) Total miles include both loaded and empty miles.
(5) Deadhead percentage is calculated by dividing empty miles
into total miles.
(6) Tractors include company-operated tractors in service, plus
tractors operated by independent contractors.
(7) Seated tractors are those occupied by drivers.
(8) Gross margin is calculated by deducting purchased
transportation expense from USAT Logistics operating revenue.
(9) Gross margin percentage is calculated gross margin divided
by USAT Logistics operating revenue.
Three Months Ended
9/30/2017 6/30/2017
3/31/2017 12/31/2016 9/30/2016 Base loaded rate per
mile
$ 1.856 $ 1.762 $ 1.740 $ 1.754 $ 1.725
Balance Sheet and Liquidity
As of September 30, 2017, our total debt and capital lease
obligations was $120.9 million, our total debt and capital
lease obligations, net of cash (“Net Debt”), was
$120.7 million and our stockholders’ equity was
$51.5 million. Net Debt to Adjusted EBITDA(a) decreased
sequentially to 5.8x compared with 6.4x as of June 30, 2017. The
Company had approximately $45.4 million available under its credit
facility as of September 30, 2017. The Company anticipates a modest
capital expenditure plan for the remainder of 2017; therefore, we
expect free cash flow will be directed toward the repayment of
debt.
Third Quarter 2017 Conference Call Information
USA Truck will hold a conference call to discuss its third
quarter 2017 results on November 3, 2017, at 8:00 AM CT / 9:00 AM
ET. To participate in the call, please dial 1-844-824-3828
(U.S./Canada) or 1-412-317-5138 (International). A live webcast of
the conference call will be broadcast in the Investor Relations
section of the Company’s website, www.usa-truck.com, under the
“Events & Presentations” tab of the “Investor Relations” menu.
For those who cannot listen to the live broadcast, the presentation
materials and an audio replay of the call will be available at our
website, www.usa-truck.com, under the “Events & Presentations”
tab of the “Investor Relations” menu. A telephone replay of the
call will also be available through November 10, 2017, and may be
accessed by calling 1-877-344-7529 (U.S.), 1-855-669-9658 (Canada),
or 1-412-317-0088 (International) and by referencing conference
ID #10113231.
(a) About Non-GAAP Financial Information
In addition to our GAAP results, this press release also
includes certain non-GAAP financial measures, as defined by the
SEC. The terms base revenue, “Net Debt,” “EBITDA,” “Adjusted
EBITDA,” “Adjusted operating ratio,” and “Adjusted earnings (loss)
per diluted share,” as we define them, are not presented in
accordance with GAAP.
The Company defines Net Debt as total debt and capital lease
obligations, net of cash. The Company defines EBITDA as net income
(loss), plus interest expense net of interest income, provision for
income tax expense (benefit) and depreciation and amortization. The
Company defines Adjusted EBITDA as EBITDA plus non-cash equity
compensation, impairments on assets held for sale, and severance
costs included in salaries, wages and employee benefits. Adjusted
operating ratio is calculated as operating expenses less
restructuring, impairment and other costs and severance costs
included in salaries, wages and employee benefits, net of fuel
surcharge revenue, as a percentage of operating revenue excluding
fuel surcharge revenue. Adjusted earnings (loss) per diluted share
is defined as net income (loss) per share plus the per share impact
of restructuring, impairment and other, and severance costs
included in salaries, wages and employee benefits, less the per
share tax impact of those adjustments using a statutory income tax
rate. The per share impact of each item is determined by dividing
it by the weighted average diluted shares outstanding. These
financial measures supplement our GAAP results in evaluating
certain aspects of our business. We believe that using these
measures improves comparability in analyzing our performance
because they remove the impact of items from our operating results
that, in our opinion, do not reflect our core operating
performance. Management and the board of directors focus on Net
Debt, EBITDA, Adjusted EBITDA, Adjusted operating ratio and
Adjusted earnings (loss) per diluted share as key measures of our
performance, all of which are reconciled to the most comparable
GAAP financial measures and further discussed below. We believe our
presentation of these non-GAAP financial measures is useful to
investors and other users because it provides them the same
information that we use internally for purposes of assessing our
core operating performance.
Net Debt, EBITDA, Adjusted EBITDA, Adjusted operating ratio and
Adjusted earnings (loss) per diluted share are not substitutes for
their comparable GAAP financial measures, such as net income, cash
flows from operating activities, operating margin ratio, diluted
earnings per share, or other measures prescribed by GAAP. There are
limitations to using non-GAAP financial measures. Although we
believe that they improve comparability in analyzing our period to
period performance, they could limit comparability to other
companies in our industry if those companies define these measures
differently. Because of these limitations, our non-GAAP financial
measures should not be considered measures of income generated by
our business or discretionary cash available to us to invest in the
growth of our business. Management compensates for these
limitations by primarily relying on GAAP results and using non-GAAP
financial measures on a supplemental basis.
Pursuant to the requirements of Regulation G and Regulation S-K,
we have provided reconciliations of EBITDA, Adjusted EBITDA,
Adjusted operating ratio and Adjusted earnings (loss) per diluted
share to GAAP financial measures at the end of this press
release.
Cautionary Statement Concerning Forward-Looking
Statements
Financial information in this press release is preliminary and
based upon information available to the Company as of the date of
this press release. As such, this information remains subject to
the completion of our quarterly review procedures, and the filing
of the related Form 10-Q, which could result in changes, some of
which could be material, to the preliminary information provided in
this press release.
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements are made pursuant to the
provisions of the Private Securities Litigation Reform Act of 1995.
These statements generally may be identified by their use of terms
or phrases such as “expects,” “estimates,” “anticipates,”
“projects,” “believes,” “hopes,” “plans,” “goals,” “intends,”
“may,” “will,” “should,” “could,” “potential,” “continue,”
“strategy,” “future” and terms or phrases of similar substance.
Forward-looking statements are based upon the current beliefs and
expectations of our management and are inherently subject to risks
and uncertainties, some of which cannot be predicted or quantified,
which could cause future events and actual results to differ
materially from those set forth in, contemplated by, or underlying
the forward-looking statements. Accordingly, actual results may
differ materially from those set forth in the forward-looking
statements. Readers should review and consider the factors that may
affect future results and other disclosures by the Company in its
press releases, Annual Report on Form 10-K and other filings with
the Securities and Exchange Commission. Any forward-looking
statement speaks only as of the date on which it is made. We
disclaim any obligation to update or revise any forward-looking
statements to reflect actual results or changes in the factors
affecting the forward-looking information, except as required by
law. In light of these risks and uncertainties, the forward-looking
events and circumstances discussed in this press release might not
occur. All forward-looking statements attributable to us, or
persons acting on our behalf, are expressly qualified in their
entirety by this cautionary statement.
References to the “Company,” “we,” “us,” “our” and words of
similar import refer to USA Truck, Inc. and its subsidiary.
About USA Truck
USA Truck provides comprehensive capacity solutions to a broad
and diverse customer base throughout North America. Our Trucking
and USAT Logistics divisions blend an extensive portfolio of asset
and asset-light services, offering a balanced approach to supply
chain management including customized truckload, dedicated contract
carriage, intermodal and third-party logistics freight management
services. For more information, visit usa-truck.com or
usatlogistics.com.
This press release and related information will be available to
interested parties at our investor relations website,
http://investor.usa-truck.com.
USA TRUCK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (in thousands,
except per share data) Three Months Ended Nine Months Ended
September 30, September 30,
Revenue 2017 2016
2017 2016 Operating revenue
$ 114,235 $
105,458
$ 323,263 $ 325,964
Operating expenses Salaries, wages and employee
benefits
29,813 29,131
89,674 92,332 Fuel and fuel
taxes
11,759 10,932
33,012 32,512 Depreciation and
amortization
6,790 7,411
21,313 22,282 Insurance and
claims
5,344 5,620
19,236 15,826 Equipment rent
2,703 1,861
7,449 5,582 Operations and maintenance
8,259 8,170
22,780 27,682 Purchased transportation
42,543 37,218
120,951 111,650 Operating taxes and
licenses
972 1,003
2,946 3,384 Communications and
utilities
679 673
1,943 2,404 Gain on disposal of
assets, net
(215 ) (181 )
(551 ) (759 )
Restructuring, impairment and other costs
-- --
--
5,264 Other
3,784 3,578
12,071 10,683 Total operating expenses
112,431 105,416
330,824 328,842
Operating income
(loss) 1,804 42
(7,561 ) (2,878 )
Other expenses
Interest expense, net
970 913
2,922 2,209 Other, net
86 87
311
423 Total other expenses, net
1,056
1,000
3,233 2,632
Income (loss) before income taxes 748 (958 )
(10,794 ) (5,510 )
Income tax expense
(benefit) 339 (224 )
(3,469 ) (1,623 )
Net income (loss)
and comprehensive income (loss) $ 409 $
(734 )
$ (7,325 ) $ (3,887 )
Net
earnings (loss) per share Average shares outstanding (basic)
8,027 8,069
8,029
8,736 Basic earnings (loss) per share
$
0.05 $ (0.09 )
$ (0.91 ) $ (0.44
) Average shares outstanding (diluted)
8,039
8,069
8,029 8,736
Diluted earnings (loss) per share
$ 0.05
$ (0.09 )
$ (0.91 ) $ (0.44 )
GAAP TO NON-GAAP RECONCILIATIONS
(UNAUDITED)
(dollar amounts in thousands, except per
share amounts)
ADJUSTED EARNINGS (LOSS) BEFORE INTEREST, TAXES,
DEPRECIATION AND AMORTIZATION
Three Months Ended
9/30/2017 6/30/2017 3/31/2017 12/31/2016 Net income (loss)
$ 409 $ (2,846 ) $ (4,890 ) $ (3,812 ) Add:
Depreciation and amortization
6,790 6,879 7,644 7,672 Income
tax expense (benefit)
339 (1,198 ) (2,610 ) (1,896 )
Interest expense, net
970 950
1,003 969
EBITDA 8,508
3,785 1,147 2,933 Add: Non-cash equity compensation
137 131
21 281 Impairment on assets held for sale
-- -- -- 2,839
Severance costs included in salaries, wages and employee benefits
31 82 817 142
Adjusted EBITDA
$ 8,676 $ 3,998
$ 1,985 $ 6,195
ADJUSTED EARNINGS (LOSS) PER DILUTED
SHARE RECONCILIATION
Three Months Ended Nine Months Ended September 30, September
30,
2017 2016
2017 2016 Earnings (loss) per diluted
share
$ 0.05 $ (0.09 )
$ (0.91 )
$ (0.44 ) Adjusted for: Severance costs included in salaries, wages
and employee benefits
-- --
0.12 0.08 Restructuring,
impairment and other costs
-- --
-- 0.60 Income tax
effect of adjustments
-- --
(0.04 ) (0.26 ) Adjusted earnings (loss) per
diluted share
$ 0.05 $ (0.09 )
$ (0.83
) $ (0.02 )
ADJUSTED OPERATING RATIO
RECONCILIATION
(UNAUDITED)
(dollar amounts in thousands)
Consolidated Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016
2017 2016
Operating revenue
$ 114,235 $ 105,458
$
323,263 $ 325,964 Less: fuel surcharge revenue
11,849 10,797
35,011
29,773 Base revenue
102,386
94,661
288,252
296,191 Operating expense
112,431 105,416
330,824 328,842 Adjusted for: Restructuring, impairment and
other costs
-- --
-- (5,264 ) Severance costs
included in salaries, wages and employee benefits
(31
) --
(930 ) (697 ) Fuel surcharge revenue
(11,849 ) (10,797 )
(35,011 ) (29,773 ) Adjusted operating expense
$ 100,551 $ 94,619
$
294,883 $ 293,108
Operating ratio
98.4 % 100.0 %
102.3 % 100.9 % Adjusted
operating ratio
98.2 % 100.0 %
102.3 %
99.0 %
Trucking Segment Three Months Ended
Nine Months Ended September 30, September 30,
2017 2016
2017 2016 Revenue
$ 76,811 $ 73,644
$
219,013 $ 225,430 Less: intersegment eliminations
361 277
738
857 Operating revenue
76,450 73,367
218,275
224,573 Less: fuel surcharge revenue
9,540
8,451
27,555 23,499
Base revenue
66,910 64,916
190,720 201,074 Operating
expense
77,644 74,872
231,440 233,180 Adjusted for:
Restructuring, impairment and other costs
-- --
--
(4,848 ) Severance costs included in salaries, wages and employee
benefits
(23 ) --
(665 ) (697 ) Fuel
surcharge revenue
(9,540 ) (8,451 )
(27,555 ) (23,499 ) Adjusted operating
expense
$ 68,081 $ 66,421
$
203,220 $ 204,136
Operating ratio
101.6 % 102.1 %
106.0 % 103.8 %
Adjusted operating ratio
101.8 % 102.3 %
106.6
% 101.5 %
USAT Logistics Segment
Three Months Ended Nine Months Ended September 30, September 30,
2017 2016
2017
2016 Revenue
$ 41,907 $ 33,476
$ 111,435 $ 106,473 Less: intersegment eliminations
4,122 1,385
6,447
5,082 Operating revenue
37,785 32,091
104,988 101,391 Less: fuel surcharge revenue
2,309 2,346
7,456
6,274 Base revenue
35,476
29,745
97,532 95,117
Operating expense
34,787 30,544
99,384 95,662
Adjusted for: Restructuring, impairment and other costs
--
--
-- (416 ) Severance costs included in salaries, wages and
employee benefits
(8 ) --
(265 ) --
Fuel surcharge revenue
(2,309 ) (2,346
)
(7,456 ) (6,274 ) Adjusted operating
expense
$ 32,470 $ 28,198
$
91,663 $ 88,972
Operating ratio
92.1 % 95.2 %
94.7 % 94.3 % Adjusted
operating ratio
91.5 % 94.8 %
94.0 %
93.5 %
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(in thousands, except share data)
September 30, December 31,
Assets 2017
2016 Current assets: Cash
$ 193 $ 122 Accounts
receivable, net of allowance for doubtful accounts of $1,047 and
$608, respectively
58,814 55,127 Other receivables
3,509 6,986 Inventories
427 413 Assets held for sale
622 4,661 Prepaid expenses and other current assets
3,451 6,187 Total current assets
67,016 73,496 Property and equipment:
Land and structures
32,493 31,500 Revenue equipment
254,462 269,953 Service, office and other equipment
25,256 25,295 Property and equipment,
at cost
312,211 326,748 Accumulated depreciation and
amortization
(117,206 ) (106,465 )
Property and equipment, net
195,005 220,283 Other assets
1,024 1,189 Total assets
$ 263,045 $ 294,968
Liabilities and Stockholders’ Equity Current liabilities:
Accounts payable
$ 29,399 $ 18,779 Current portion of
insurance and claims accruals
11,736 10,665 Accrued expenses
7,665 7,533 Current maturities of capital leases
15,021 16,742 Insurance premium financing
--
3,943 Total current liabilities
63,821
57,662 Deferred gain
531 652 Long-term debt
77,500
96,600 Capital leases, less current maturities
28,382 35,133
Deferred income taxes
31,890 37,775 Insurance and claims
accruals, less current portion
9,424
8,558 Total liabilities
211,548 236,380 Commitments
and contingencies Stockholders’ equity: Preferred Stock, $.01 par
value; 1,000,000 shares authorized; none issued --
-- Common
Stock, $.01 par value; 30,000,000 shares authorized; issued
12,149,376 shares, and 12,156,376 shares, respectively
121
122 Additional paid-in capital
68,498 68,375 Retained
earnings
50,638 57,963 Less treasury stock, at cost
(3,853,064 shares, and 3,849,815 shares, respectively)
(67,760 ) (67,872 ) Total stockholders’ equity
51,497 58,588 Total liabilities
and stockholders’ equity
$ 263,045 $ 294,968
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171102006704/en/
USA Truck, Inc.Jason Bates, EVP & CFO,
479-471-2672jason.bates@usa-truck.comorJimmie Acklen, Investor
Relations, 479-471-3430jimmie.acklen@usa-truck.com
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