USA Truck logs another loss

Trucker notes one-time costs, says revenue on upswing

Wednesday, February 12, 2014

USA Truck reported a $4.69 million loss Tuesday for the fourth quarter of 2013.

The number was larger than the $3.7 million loss posted by the company in 2012. USA Truck has failed to log a profitable quarter for more than two years. Per-share losses for the quarter were 45 cents, down from 31 cents last year.

Still, the company posted quarterly revenue of $141.4 million, up from $134.8 million.

Operating income was $1.3 million excluding one-time charges of $5.97 million related to USA Truck’s liability claims reserves and $1.5 million in recent legal expenses. Chief Executive Officer John Simone noted that without those expenses, this would have been the first positive operating-income report for the company since 2011.

“Progress has been consistent. It continues to gain momentum,” Simone said during a call with investors. “At the same time, there is much to be done to continue USA Truck to reaching its full potential.”

Simone was hopeful during a fall investment conference that USA Truck might post positive results over the final three months of 2013. USA Truck cut its third-quarter losses from $6.1 million to $602,000. It was the best quarter for the company since 2011 and gave Simone hope that a positive quarterly report would be on the way.

While the company didn’t post a profit, Simone did point to a number of metrics that he said illustrated the positive momentum. He said the fourth quarter was “a turning point” for the company, which has struggled financially the past five years.

USA Truck increased its yearly revenue from $512.4 million to $555 million. It managed to cut its overall losses from $17.6 million in 2012 to $9.1 million.

Trucking revenue was up more than 6 percent to $113.6 million for the fourth quarter. Gains in trucking have come at a time when USA Truck’s competitors have reported little gain or losses in the segment, Simone said.

USA Truck paid down $12 million in debt during the fourth quarter, and the company reduced outstanding debt to $128.9 million.

“We’ve turned in another quarter of significantly improved financial results,” Simone said. “Our turnaround has really taken hold. These results show the momentum and execution of our plan.”

Holding the company back from profitability in the final quarter of 2013 were legal fees associated with a takeover attempt by competitor and suitor Knight Transportation of Phoenix. Company executives did not address the company’s dealings with Knight, other than referring to the legal fees and noting a recent agreement between the two companies. USA Truck has offered to drop a lawsuit against Knight, in exchange for several provisions in place through Sept. 30.

Knight, as part of a standstill agreement, will not purchase USA Truck securities or assets over the next seven-plus months. Knight also won’t seek representation on the USA Truck board of directors.

USA Truck has asked Knight not to vote or influence board of director decisions through Sept. 30. Knight agreed, neutralizing the influence it would ordinarily enjoy through ownership of 1.3 million shares.

“We will not be taking questions about our recent settlement agreement,” Simone said. “We are pleased to eliminate this distraction.”

Despite the uncertainty surrounding the acquisition attempt, USA Truck stock has performed well since September. Before Knight’s interest in USA Truck, shares were valued near $6. Trading ended Tuesday at $13.87, down 83 cents from Monday.

Business, Pages 25 on 02/12/2014