A $17.54 million net loss during 2012 for Van Buren-based USA Truck begs the question: How much longer can the company operate in the red?
Cliff Beckham, USA Truck president and CEO, said the company is capitalized for the “foreseeable future.”
“We believe our balance sheet and sources of liquidity are adequate to support our operating needs for the foreseeable future,” Beckham noted in the earnings statement released Thursday (Jan. 31). “At December 31, 2012, our outstanding debt, less cash, represented 55.1% of our balance sheet capitalization, compared to 47.4% at December 31, 2011.”
Beckham also said the company remains in compliance with its new, five-year $125 million financing agreement with Wells Fargo Capital and PNC Bank, and has $19.9 million available from which to borrow.
USA Truck was forced in August 2012 to obtain a new line of credit during the third quarter of 2012 after violating covenant agreements with the previous credit arrangement. Poor national freight demand and missteps by USA Truck in implementing new software were factors leading to a string of financial losses for the long-haul carrier that has more than 2,184 tractors and approximately 3,000 employees.
FULL YEAR, QUARTERLY NUMBERS
For the full year, total revenue was $512.428 million, down from the $519.408 million during 2011. The company’s freight brokerage business – Strategic Capacity Solutions – posted $89.831 million, a more than $22 million improvement over 2011.
However, total trucking revenue was $297.624 million, down 7.3% compared to 2011.
The company posted a loss of $17.54 million, marking four years of losses. USA Truck posted a 2011 net income loss of $10.77 million, more than triple the loss during 2010 and in a year when other trucking companies began to see improved financials. Also, 2011 marked the third consecutive year of losses for USA Truck. In 2010, the company reported a loss of $3.308 million, and a $7.177 million loss in 2009.
For the fourth quarter, total revenue was $134.771 million, ahead of the $126.202 million during the 2011 quarter. The company lost $3.11 million during the quarter, an improvement over the $4.354 million loss during 2011.
The 30 cents per share loss was better than the 38 cents per share loss expected by the consensus of analyst estimates.
All segments of the company – trucking, brokerage and intermodal – generated more revenue when compared to the same quarter of 2011. Trucking revenue was $77.891 million, above the $75.309 million during the 2011 quarter.
LATE YEAR GAINS
It was the fourth quarter performance that company officials promoted in the earnings statement.
"Improvement was most evident in our Trucking segment, where we produced year-over-year revenue growth for the first time since the second quarter of 2011. Base Trucking revenue grew 3.4% despite a 3.1% reduction in the average fleet size. Base revenue per tractor per week improved 6.7% to $2,720 on an improved freight mix and a substantially larger manned tractor count,” Beckham said.
Other improvements noted in the statement include:
• Base trucking revenue grew 3.4% despite a 3.1% reduction in the average fleet size. Base revenue per tractor per week improved 6.7% to $2,720 on an improved freight mix and a larger manned tractor count.
• A better freight mix and the operational execution increased miles per manned tractor per week by 1.3% to 1,931 miles.
• The company cut its unmanned tractor count by more than 50%, to 92 from 213 sequentially versus the third quarter of 2012.
• The manned tractor count growth was made possible primarily by lower driver turnover, which improved throughout the quarter to an annualized rate of 83% in December 2012, compared to 107% in December 2011.
• The combination of our manned tractor count and greater miles per manned tractor led to a 5.5% improvement in overall tractor utilization to 1,850 miles per in-service tractor per week."
The company announced in late December the addition of Thomas Glaser to the management team. Glaser, a former president and COO of Celadon Group who has 24 years of trucking industry experience, is the second attempt to bring experience into USA Truck operations. The company hired David Hartline in August 2011 as the executive vice president and chief operations officer.
Link here for the company’s fourth quarter financial report.
Shares of USA Truck (NASDAQ: USAK) closed Wednesday at $5.57. The price of the thinly traded shares fell in early Thursday trading to $4.66. During the past 52 weeks, the share price has ranged from a $9.24 high to a $2.65 low.