USA Truck Announces Improved Fourth Quarter Results

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Jan 27, 2011, 08:00 ET

VAN BUREN, Ark., Jan. 27, 2011 /PRNewswire/ --

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.

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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."

The following table summarizes the results of operations information of USA Truck, Inc. ("Company") for the three-month and twelve-month periods indicated:


	(in thousands, except per share data)
	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2010		2009			2010		2009

Revenue:
Trucking revenue (1)	$	86,456	$	78,674	$	338,369	$	310,023
Strategic Capacity Solutions revenue (2)		10,102		4,158		34,917		13,741
Intermodal revenue (2)		5,449		2,313		13,597		7,756
Base revenue		102,007		85,145		386,883		331,520
Fuel surcharge revenue		20,084		15,171		73,278		50,848
Total revenue		122,091		100,316		460,161		382,368

Operating expenses and costs:
Salaries, wages and employee benefits		33,718		33,492		132,445		128,319
Fuel and fuel taxes		31,055		27,012		114,915		93,803
Purchased transportation		24,023		12,515		79,601		44,058
Depreciation and amortization		12,508		12,416		49,754		50,152
Operations and maintenance		10,154		6,715		36,086		26,594
Insurance and claims		5,981		4,500		22,811		21,086
Operating taxes and licenses		1,420		1,210		5,652		5,642
Communications and utilities		979		1,038		3,948		3,951
Gain on disposal of assets, net		(232)		(9)		(320)		(7)
Other		4,246		4,305		15,177		15,377
Total operating expenses and costs		123,852		103,194		460,069		388,975
Operating (loss) income		(1,761)		(2,878)		92		(6,607)
Other expenses (income):
Interest expense		795		768		3,438		3,030
Other, net		(145)		(133)		(45)		(207)
Total other expenses, net		650		635		3,393		2,823
Loss before income taxes		(2,411)		(3,513)		(3,301)		(9,430)
Income tax (benefit) expense		(614)		(1,001)		7		(2,253)
Net loss	$	(1,797)	$	(2,512)	$	(3,308)	$	(7,177)

Per share information:
Average shares outstanding (Basic)		10,297		10,275		10,295		10,240
Basic loss per share	$	(0.17)	$	(0.24)	$	(0.32)	$	(0.70)

Average shares outstanding (Diluted)		10,297		10,275		10,295		10,240
Diluted loss per share	$	(0.17)	$	(0.24)	$	(0.32)	$	(0.70)

The following table reflects the condensed financial position of the Company as of the dates indicated:


	(in thousands)
	December 31,
	2010		2009
Assets
Current assets:
Cash and cash equivalents	$	2,726	$	797
Receivables, net		47,983		48,586
Inventories		2,080		1,541
Deferred income taxes		--		962
Prepaid expenses and other current assets		12,885		7,931
Total current assets		65,674		59,817

Property and equipment, at cost		423,115		426,752
Accumulated depreciation and amortization		(163,867)		(156,331)
Property and equipment, net		259,248		270,421
Note receivable		2,048		--
Other assets		415		462
Total assets	$	327,385	$	330,700

Liabilities and Stockholders' equity
Current liabilities:
Bank drafts payable	$	4,233	$	5,678
Trade accounts payable		16,691		9,847
Current portion of insurance and claims accruals		4,725		4,356
Accrued expenses		8,401		9,008
Note payable		1,009		1,015
Current maturities of long-term debt and capital leases		18,766		63,461
Deferred income taxes		1,094		--
Total current liabilities		54,919		93,365

Deferred gain		618		--
Long-term debt and capital leases, less current maturities		79,750		39,116
Deferred income taxes		50,782		53,073
Insurance and claims accruals, less current portion		3,608		4,600
Total stockholders' equity		137,708		140,546
Total liabilities and stockholders' equity	$	327,385	$	330,700

The following table includes key Trucking operating statistics for the three-month and twelve-month periods indicated:


	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2010			2009			2010			2009
Total miles (in thousands) (3)		62,783			61,088			246,742			240,379
Empty mile factor		10.1	%		10.5	%		10.0	%		10.9	%
Weighted average number of tractors (4)		2,369			2,320			2,347			2,338
Average miles per tractor per period		26,502			26,331			105,131			102,814
Average miles per tractor per week		2,016			2,003			2,016			1,972
Average miles per trip (5)(6)		569			594			560			599
Base Trucking revenue per tractor per week(6)	$	2,777		$	2,580		$	2,765		$	2,543
Number of tractors at end of period (4)		2,363			2,328			2,363			2,328
Operating ratio (7)		101. 7	%		103.4	%		99.9	%		102.0	%

(1)	Trucking revenue includes base revenue generated from our General Freight and Dedicated Freight service offerings.
(2)	We previously included the results of our Brokerage and Container-on-Flat-Car rail intermodal service offerings in Strategic Capacity Solutions. Our Trailer-on-Flat-Car rail intermodal service offering was previously included in our Trucking operating segment. Container-on-Flat-Car rail intermodal and Trailer-on-Flat-Car rail intermodal are now combined and reported as Intermodal and Brokerage is now reported as Strategic Capacity Solutions. Strategic Capacity Solutions and Intermodal are classified as separate operating segments and aggregated into one segment for financial reporting purposes.
(3)	Total miles include both loaded and empty miles.
(4)	Tractors include Company-operated tractors in service plus owner-operator tractors.
(5)	Average miles per trip is based upon loaded miles divided by the number of Trucking shipments.
(6)	Because of the reclassification mentioned in footnote 2 above, previously reported amounts for average miles per trip and base Trucking revenue per tractor per week have been recalculated excluding Trailer-on-Flat-Car rail intermodal from Trucking.
(7)	Operating ratio is based upon total operating expenses, net of fuel surcharge, as a percentage of base revenue.


Selected other financial information:
	(in thousands)
	Twelve Months Ended December 31,
	2010		2009
Net cash provided by operating activities	$	48,245	$	32,851
Capital expenditures, net		38,261		39,694

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. These statements generally may be identified by their use of terms or phrases such as "expects," "estimates," "anticipates," "projects," "believes," "plans," "goals," "intends," "may," "will," "should," "could," "potential," "continue," "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 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. 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. 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.

USA Truck is a dry van truckload carrier transporting general commodities via our General Freight and Dedicated Freight service offerings. We transport commodities throughout the continental United States and into and out of portions of Canada. We also transport general commodities into and out of Mexico by allowing through-trailer service from our terminal in Laredo, Texas. Our Strategic Capacity Solutions and Intermodal operating segments provide customized transportation solutions using our technology and multiple modes of transportation including our assets and the assets of our partner carriers.

This press release and related information will be available to interested parties at our web site, http://www.usa-truck.com under the "News Releases" tab of the "Investors" menu.

SOURCE USA Truck, Inc.