USA Truck Inc. today, July 16, announced base revenue of $81.2 million for the quarter ended June 30, a decrease of 21.8 percent from $103.8 million for the same quarter of 2008. The company incurred a net loss of $1.1 million as compared to net income of $2.1 million.
For the six months ended June 30, base revenue decreased 18.4 percent to $164.1 million from $201.0 million for the same period of 2008. The company incurred a net loss of $3.0 million as compared to net income of $0.2 million.
“Freight conditions have steadily deteriorated since the current freight depression began in the second half of 2006,” said Clifton Beckham, president and chief executive officer of the Van Buren, Ark.-based company. “Freight availability remains at historically low levels, and pricing competition has been fierce as excess tractor capacity, buoyed by lenient lenders and lower fuel prices, continues to exist in the marketplace.”
Beckham said that since the beginning of 2008, USA Truck has reduced its nondriver headcount by about 200 employees, or 24.4 percent. “At the same time, we have taken advantage of opportunities presented by this economic environment to attract and hire talent in key areas such as intermodal, brokerage, sales, operations, pricing and engineering,” he said. The company also has achieved its goal of making owner-operators 5 to 10 percent of its total fleet. “Our owner-operator fleet grew 68.9 percent to 152, which is 6.5 percent of our total tractor fleet,” Beckham said. “However, until freight conditions improve, we have temporarily halted the growth of our owner-operator fleet.”
Beckham said the company believes it now has implemented the broad organizational changes necessary to reposition its business model to produce more robust earnings and growth in the future. Improved cash flow from operations and a reduced level of capital expenditures combined to produce positive free cash flow that helped strengthen USA Truck’s balance sheet, he said. “We have reduced our debt approximately $10.6 million, to $87.0 million, year-to-date, which has provided us with ample working capital availability and reduced our debt to total capitalization to 36.6 percent. We expect capital expenditures to remain light for the remainder of the year as we project that our average tractor age will only be 2.2 years by yearend. We are not projecting a material increase in capital expenditures until the second half of 2010.
“We do not anticipate a meaningful recovery in freight demand during the remainder of 2009,” Beckham said. “We believe that the truckload industry’s prospects for recovery are heavily tied to business inventories, which remain well above their historical inventory-to-sales ratio. Once inventory destocking ends, then we believe that inventory replenishment will provide a boost to trucking volumes. However, such an event seems unlikely in the near term based on current sales and inventory trends.”