USA Truck Reports Positive Third Quarter 2017 Results

USA Truck, Inc. (NASDAQ:USAK), a leading capacity solutions provider, has announced its financial results for the three and nine months ended September 30, 2017 in which 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, “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 under-utilization of our tractors relative to desired levels; however, these headwinds were offset by improving yield, as the company continues to work on refining the network.

The company further noted that it remains “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.

Category: Featured, General Update, News