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President and CEO James Reed commented-The third quarter of 2020 was the tale of two freight markets. The first half of the quarter was similar to the second quarter of 2020, with unpredictable week to week swings in freight, pricing and seasonally softer demand. The market turned toward the middle of August as capacity constraints emerged and demand strengthened "
More About USA Truck
USA Truck provides comprehensive capacity solutions to a broad and diverse customer base throughout North America. Our Trucking and USAT Logistics divisions blend an extensive portfolio of asset and asset-light services, offering a balanced approach for our customers’ supply chain management, including customized truckload, dedicated contract carriage, intermodal and third-party logistics freight management services.
Overview of USA Truck's 3rd quarter 2020 earnings report
VAN BUREN, Ark.--(BUSINESS WIRE)-- USA Truck Inc. (NASDAQ: USAK), a leading capacity solutions provider, today announced its financial results for the three and nine months ended September 30, 2020.
For the quarter ended September 30, 2020, consolidated operating revenue was $141.8 million compared to $130.9 million for the prior-year period. Base revenue(a), which excludes fuel surcharge revenue, was $131.5 million compared to $114.9 million for the 2019 period. The Company reported net income of $2.3 million, or $0.26 per diluted share for the third quarter 2020 and adjusted net income(a) of $2.6 million, or $0.29 per diluted share, compared to a net loss of $1.4 million, or $0.16 per diluted share and adjusted net loss(a) of $1.1 million, or $0.13 per diluted share for the same quarter in 2019. The Company’s third quarter 2020 consolidated operating ratio was 96.9%, compared to 100.0% in the comparable 2019 quarter.
President and CEO James Reed commented, “The third quarter of 2020 was the tale of two freight markets. The first half of the quarter was similar to the second quarter of 2020, with unpredictable week to week swings in freight, pricing and seasonally softer demand. The market turned toward the middle of August as capacity constraints emerged and demand strengthened. The tightening capacity was driven by many factors including the implementation of the new Drug and Alcohol Clearinghouse screening requirements, driver school shut downs in the face of COVID-19 concerns, general COVID-19 cautiousness among drivers, and expanded unemployment insurance and federal and state relief programs.
Despite the difficult driver market, during the quarter we were able to improve our Trucking segment operating ratio and adjusted operating ratio(a) by 380 basis points and 410 basis points year over year and 220 basis points and 200 basis points sequentially to 96.5% and 95.8%, respectively. We were able to drive the improved results through a disciplined approach to our network, targeted repricing efforts with customers, moderating truck counts by reducing our average available tractor count by 94 tractors sequentially, and by executing our previously discussed self-help initiatives through our migration to a more regionalized business model.
USAT Logistics capitalized on the increasing market rates and executed through increased volume during the quarter, which generated the two highest revenue months in the history of this operating segment during this quarter. This powerful combination of volume and rate helped grow the overall gross margin, return to operating profitability and improve the segment operating ratio and adjusted operating ratio(a) by 130 basis points year over year and 250 basis points sequentially to 98.1% and 98.0%, respectively. We expect the combination of tighter supply and traction gained on self-help initiatives will set us up well for the fourth quarter of 2020 and beyond.
Trucking: For the third quarter of 2020, Trucking operating revenue (before intersegment eliminations) increased $3.8 million, or 4.1%, to $97.4 million, compared to the third quarter of 2019. Trucking operating income of $3.5 million for the 2020 period, reflected an operating ratio of 96.5%, compared to an operating loss of $0.3 million and an operating ratio of 100.3% for the third quarter of 2019. This represents an increase of $3.7 million year over year in operating income and a 380 basis point improvement in operating ratio. Trucking adjusted operating income(a) was $3.8 million for the 2020 period, reflecting an adjusted operating ratio(a) of 95.8%, compared to adjusted operating income(a) of $0.1 million and an adjusted operating ratio(a) of 99.9% for the comparable 2019 period. This represents an increase of $3.7 million year over year in adjusted operating income(a) and a 410 basis point improvement in adjusted operating ratio(a).
Trucking operations delivered the following results during the third quarter:
USAT Logistics: Operating revenue (before intersegment eliminations) was $52.1 million for the third quarter of 2020, an increase of $12.7 million, or 32.2% year over year. Both operating income and adjusted operating income(a) were $1.0 million for the third quarter of 2020, reflecting an operating ratio of 98.1% and an adjusted operating ratio(a) of 98.0%, compared to operating income and adjusted operating income(a) of $0.2 million and an operating ratio of 99.4% and an adjusted operating ratio(a) of 99.3% for the comparable 2019 period. This change represented an increase of $0.7 million year over year in operating income and adjusted operating income(a) and an improvement of 130 basis points in both operating ratio and adjusted operating ratio(a) compared to the third quarter of 2019.
USAT Logistics operations delivered the following results during the third quarter:
For the quarter ended September 30, 2020, consolidated operating revenue was $141.8 million compared to $130.9 million for the prior-year period. Base revenue(a), which excludes fuel surcharge revenue, was $131.5 million compared to $114.9 million for the 2019 period. The Company reported net income of $2.3 million, or $0.26 per diluted share for the third quarter 2020 and adjusted net income(a) of $2.6 million, or $0.29 per diluted share, compared to a net loss of $1.4 million, or $0.16 per diluted share and adjusted net loss(a) of $1.1 million, or $0.13 per diluted share for the same quarter in 2019. The Company’s third quarter 2020 consolidated operating ratio was 96.9%, compared to 100.0% in the comparable 2019 quarter.
President and CEO James Reed commented, “The third quarter of 2020 was the tale of two freight markets. The first half of the quarter was similar to the second quarter of 2020, with unpredictable week to week swings in freight, pricing and seasonally softer demand. The market turned toward the middle of August as capacity constraints emerged and demand strengthened. The tightening capacity was driven by many factors including the implementation of the new Drug and Alcohol Clearinghouse screening requirements, driver school shut downs in the face of COVID-19 concerns, general COVID-19 cautiousness among drivers, and expanded unemployment insurance and federal and state relief programs.
Despite the difficult driver market, during the quarter we were able to improve our Trucking segment operating ratio and adjusted operating ratio(a) by 380 basis points and 410 basis points year over year and 220 basis points and 200 basis points sequentially to 96.5% and 95.8%, respectively. We were able to drive the improved results through a disciplined approach to our network, targeted repricing efforts with customers, moderating truck counts by reducing our average available tractor count by 94 tractors sequentially, and by executing our previously discussed self-help initiatives through our migration to a more regionalized business model.
USAT Logistics capitalized on the increasing market rates and executed through increased volume during the quarter, which generated the two highest revenue months in the history of this operating segment during this quarter. This powerful combination of volume and rate helped grow the overall gross margin, return to operating profitability and improve the segment operating ratio and adjusted operating ratio(a) by 130 basis points year over year and 250 basis points sequentially to 98.1% and 98.0%, respectively. We expect the combination of tighter supply and traction gained on self-help initiatives will set us up well for the fourth quarter of 2020 and beyond.
Trucking: For the third quarter of 2020, Trucking operating revenue (before intersegment eliminations) increased $3.8 million, or 4.1%, to $97.4 million, compared to the third quarter of 2019. Trucking operating income of $3.5 million for the 2020 period, reflected an operating ratio of 96.5%, compared to an operating loss of $0.3 million and an operating ratio of 100.3% for the third quarter of 2019. This represents an increase of $3.7 million year over year in operating income and a 380 basis point improvement in operating ratio. Trucking adjusted operating income(a) was $3.8 million for the 2020 period, reflecting an adjusted operating ratio(a) of 95.8%, compared to adjusted operating income(a) of $0.1 million and an adjusted operating ratio(a) of 99.9% for the comparable 2019 period. This represents an increase of $3.7 million year over year in adjusted operating income(a) and a 410 basis point improvement in adjusted operating ratio(a).
Trucking operations delivered the following results during the third quarter:
- Base revenue per available tractor per week increased $318, or 10.1%, compared to the third quarter of 2019, and $457, or 15.2% sequentially, primarily due to an increase in base revenue per loaded mile and a decrease in tractor count.
- Base revenue per loaded mile increased $0.191, or 9.1% year over year and $0.271, or 13.4%, sequentially. This change was the result of increased demand and tightening supply resulting in higher rate realizations.
- Loaded miles per available tractor per week increased 14 miles, or 0.9%, compared to the third quarter of 2019, and by 23 miles, or 1.5% sequentially.
- Deadhead percentage for third quarter 2020 improved 110 basis points year over year and 70 basis points sequentially.
- The average seated tractor count for the third quarter of 2020 was 1,827, which represented a decrease of 1.9% over the third quarter 2019 average of 1,862, and a 6.0% decrease over the sequential average of 1,943. Average unseated tractor percentage for third quarter 2020 was 7.2%, an unfavorable change from 6.5% for the third quarter of 2019 and 5.8% sequentially.
USAT Logistics: Operating revenue (before intersegment eliminations) was $52.1 million for the third quarter of 2020, an increase of $12.7 million, or 32.2% year over year. Both operating income and adjusted operating income(a) were $1.0 million for the third quarter of 2020, reflecting an operating ratio of 98.1% and an adjusted operating ratio(a) of 98.0%, compared to operating income and adjusted operating income(a) of $0.2 million and an operating ratio of 99.4% and an adjusted operating ratio(a) of 99.3% for the comparable 2019 period. This change represented an increase of $0.7 million year over year in operating income and adjusted operating income(a) and an improvement of 130 basis points in both operating ratio and adjusted operating ratio(a) compared to the third quarter of 2019.
USAT Logistics operations delivered the following results during the third quarter:
- Gross margin dollars increased 21.9%, or $1.1 million year over year, to $5.9 million for the third quarter 2020, and 24.8%, or $1.2 million, sequentially.
- Gross margin percentage for the third quarter of 2020 decreased 90 basis points to 11.3% compared to 12.2% in both the third quarter of 2019 and sequentially.
- Revenue per load increased 27.2%, or $347 per load year over year, and 39.6%, or $460 per load, sequentially.
- Load count increased by 1,224 loads, or 4.0%, year over year, but decreased by 1,238 loads, or 3.7%, sequentially.
Stock price of USA Truck (USAK) over the last 5 years
The image below shows the stock price history of USA Truck (USAK) over the last 5 years. And its not been a good time for investors as their stock price declined by -58.11% over the last 5 years. Not the type of returns any investor would want.
Next earnings release of USA Truck (USAK)
It is expected that USA Truck will release their 4th quarter 2020 earnings report in late Janaury 2021
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