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USA Truck, Inc. Announces Record Operating Revenues.

Business Editors

VAN BUREN, Ark.--(BUSINESS WIRE)--Oct. 16, 2002

USA Truck, Inc. (NASDAQ:USAK) today announced record operating revenues, before fuel surcharge, of $70,651,305 for the quarter ended September 30, 2002, an increase of 12.4% from $62,869,859 for the same quarter of 2001. Net income increased 115.7% to $1,271,086 for the third quarter of 2002, compared to $589,287 for the same quarter of 2001. Fully diluted net income per share for the quarter ended September 30, 2002 was $.14 compared to $.06 for the same quarter of 2001, an increase of 133.3%.

The following table summarizes the earnings information of USA Truck, Inc. ("the Company"):

 Quarter Ended Nine Months Ended
 September 30, September 30,
 ------------------------- ---------------------------
 2002 2001 2002 2001
 ------------ ------------ ------------- -------------
Revenue, before
 fuel surcharge $70,651,305 $62,869,859 $201,221,745 $183,035,327
Fuel surcharge 1,671,810 1,997,512 2,936,385 6,961,051
 ------------ ------------ ------------- -------------
Total revenue 72,323,115 64,867,371 204,158,130 189,996,378
 ------------ ------------ ------------- -------------

Operating expenses and costs:
Salaries, wages
 and employee
 benefits 27,138,295 27,349,174 81,009,783 81,082,402
Fuel & fuel taxes 12,569,554 12,605,695 35,099,029 39,009,051
 transportation 7,409,328 3,185,990 18,887,875 6,736,081
Depreciation and
 amortization 7,067,364 6,530,735 20,488,253 19,912,967
Operations and
 maintenance 5,672,101 5,658,856 16,602,598 17,197,950
Insurance and
 claims 4,643,859 3,663,501 12,496,613 9,922,409
Operating taxes
 and licenses 1,131,138 856,117 3,249,394 2,962,626
 and utilities 722,965 669,335 2,110,382 2,029,995
Other 2,553,001 2,068,187 7,137,581 6,706,305
 ------------ ------------ ------------- -------------
Total operating
 expenses and
 costs 68,907,605 62,587,590 197,081,508 185,559,786

 ------------ ------------ ------------- -------------
Operating income 3,415,510 2,279,781 7,076,622 4,436,592

Other expenses,
 net 662,081 1,313,491 2,181,918 3,678,924

 ------------ ------------ ------------- -------------
Income before
 income taxes 2,753,429 966,290 4,894,704 757,668

Income tax
 expense 1,482,343 377,003 2,819,616 294,733

 ------------ ------------ ------------- -------------
Net income $1,271,086 $589,287 $2,075,088 $462,935
 ============ ============ ============= =============

Earnings per
 share (diluted) $0.14 $0.06 $0.22 $0.05

Average shares
 (diluted) 9,359,062 9,277,221 9,341,642 9,281,664

Key Operating Statistics:

 Quarter Ended Nine Months Ended
 September 30, September 30,
 ----------------------- -------------------------
 2002 2001 2002 2001
 ----------- ----------- ------------ ------------
Total miles
 (Loaded & Empty) 57,912,442 53,860,515 168,047,877 159,439,682

Empty mile factor 8.92% 9.48% 9.41% 9.68%

Revenue per mile(1) $1.220 $1.167 $1.197 $1.148

Average number of
 tractors 1,931 1,779 1,870 1,771

Miles per tractor 29,991 30,276 89,865 90,028

Average miles per
 tractor per week 2,343 2,403 2,352 2,369

Miles per trip 804 827 809 832

Number of shipments 65,598 58,979 188,146 173,049

Operating ratio(2) 95.2% 96.4% 96.5% 97.6%

(1) Revenue per mile as reported above is based upon revenue,

before fuel surcharge.

(2) Operating ratio as reported above is based upon total

operating expenses, net of fuel surcharge, as a percentage of

revenue, before fuel surcharge.

In comparing the financial results of the quarter ended September 30, 2002 to the quarter ended September 30, 2001, Robert M. Powell, Chairman and CEO of the Company, made the following statement:

We experienced strong freight demand in the third quarter despite

mixed economic indicators. The combination of that stronger demand

and a noticeable decline in industry capacity allowed us to

increase our rates slightly and reduce our empty mile factor below

9.00% for the first time since the fourth quarter of 1999. We will

continue with our efforts to increase those rates and to improve

equipment utilization, which was off 2.5% this quarter compared to

last year. Our USA Logistics division also continued its pattern

of strong revenue growth, expanding 34% mostly through third party

logistics services.

The improving economic environment and our internal cost-cutting

efforts created more operating margin during the third quarter. In

fact, we posted our lowest operating ratio (95.2%) since the

second quarter of 2000 and continued our encouraging trend of slow

but steady margin improvements. Those improvements are partially

the result of targeted cost-reducing programs and a more favorable

mix of freight that has yielded greater revenue per mile and lower

operating costs (fuel and tolls, for example).

However, the September fuel spike was detrimental to earnings as

was the continued tight insurance market, which forced premiums up

considerably late last year. We were able to renew our insurance

coverage at the end of the third quarter and, though the premiums

remained high, we were successful at reducing our self-insurance

retention and deductibles, thus reducing our risk exposure. We are

also watching the tractor markets closely. Our decision to extend

the lives of our tractor fleet during 2002 instead of trading

during the used tractor market depression has been successful thus

far. While the used tractor market slowly recovers, we are

beginning to see some increased maintenance costs associated with

that older equipment. We intend to begin trading the oldest

tractors in for new ones as soon as the used market prices meet

management expectations and the new EPA-compliant engines are

proven in the field.

While management continues to work diligently to take costs out of

the process at every opportunity, we are focused on four primary

cost areas: revenue mix (rates, utilization, empty miles), driver

pay, insurance/safety and maintenance. We have made progress in

all of these areas and will continue to focus on them until we are

satisfied that we have squeezed every possible penny from them.

This press release contains forward-looking statements and information that are based on management's current beliefs and expectations and assumptions made by it based upon information currently available. Forward-looking statements include statements relating to the Company's plans, strategies, objectives, expectations, intentions, and adequacy of resources, may be identified by words such as "will", "could", "should", "believe", "expect", "intend", "plan", "schedule", "estimate", "project" and similar expressions. These statements are based on current expectations and are subject to uncertainty and change. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will be realized. Should one or more of the risks or uncertainties underlying such expectations materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. Among the key factors that are not within the Company's control and that may have a direct bearing on operating results are increases in diesel prices, adverse weather conditions and the impact of increased rate competition. The Company's results may also be significantly affected by fluctuations in general economic conditions, as the Company's utilization rates are directly related to business levels of shippers in a variety of industries. In addition, shortages of qualified drivers and intense or increased competition for drivers may adversely impact the Company's operating results and its ability to grow. Results for any specific period could also be affected by various unforeseen events, such as unusual levels of equipment failure or vehicle accident claims.

USA Truck is a medium haul, common and contract carrier specializing in truckload quantities of general commodities. The Company operates in the 48 contiguous United States and the Canadian provinces of Ontario and Quebec and in Mexico through the gateway city of Laredo, Texas.
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Publication:Business Wire
Geographic Code:1USA
Date:Oct 16, 2002
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