USA Truck Inc. on Thursday, Jan. 28, announced base revenue of $85.1 million for the three months ended Dec. 31, 2009, a decrease of 8.3 percent from $92.9 million for the same quarter of 2008. The company incurred a net loss of $2.5 million compared to net income of $0.6 million.
For the full year ended Dec. 31, 2009, base revenue decreased 16.6 percent to $331.5 million from $397.6 million for the same period of 2008. The company incurred a net loss of $7.2 million compared to net income of $3.1 million.
“Despite rising fuel costs and the ongoing depression in freight volumes that began in 2006, our operational performance trended positively,” said Clifton R. Beckham, president and chief executive officer of the Van Buren, Ark.-based company. “Near the end of 2008, we reduced the size of our fleet in response to dramatic reductions in freight volumes due to the economic recession. That fleet reduction resulted in a 7.6 percent decline in our tractor count and helped us reduce the decline in our year-over-year tractor utilization (miles per tractor per week) to 4.8 percent from much larger declines earlier in 2009.”
Beckham said USA Truck has completed the bulk of the structural changes it believes will be necessary to reposition its business model to more effectively compete in today’s truckload industry. “We are now concentrating on execution,” he said. “Holding the line on costs, improving operational efficiency and winning Spider Web lane freight are dominating our time. Our goal is to have enough of the right freight in our network to be profitable by the second quarter of 2010, assuming no further deteriorations in the freight market. Longer-term, we expect the transition to the Spider Web network to take a full business cycle.”
Beckham said the company’s balance sheet remains strong. “ Our debt to total capitalization ratio is at 42.1 percent, we produced positive free cash flow during 2009, and we have kept the age of our tractor fleet relatively young at 2.25 years,” he said. “We believe we have adequate liquidity available on our revolving credit facility, which matures on September 1, 2010. As we previously reported, we anticipate that the pricing spreads on any new facility will be materially higher than our current spreads due to widely reported dislocations in the credit markets. We recently signed a term sheet, containing higher pricing spreads, with a bank to replace the facility, and we are now working on definitive documents.
“We believe industry conditions have bottomed,” Beckham said. “However, tractor capacity remains abundant and pricing pressure remains severe. We anticipate our first-quarter results will be similar to our recent quarters, and there will likely be sequential downward pressure on industry pricing as lower-priced third and fourth quarter bids take effect. However, we also believe the imbalance between industry tractor capacity and freight demand will gradually improve throughout 2010 as businesses begin restocking inventories and as unsustainably low freight pricing and rising fuel prices begin thinning industry capacity.”
