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Exhibit 99.1

 

 

USA Truck Reports Second Quarter 2015 Results

 

Board of Directors Authorizes One Million Share Repurchase Program

 

Van Buren, AR – August 4, 2015 – USA Truck, Inc. (NASDAQ: USAK), a leading capacity solutions provider headquartered in Van Buren, AR, today announced its financial results for the three and six months ended June 30, 2015.

 

Operating revenue for the quarter ended June 30, 2015 decreased 12.9% to $133.6 million from $153.3 million for the prior-year period. Base revenue, which excludes fuel surcharges, decreased 6.2% to $117.2 million in the June 2015 quarter from $125.0 million in the June 2014 quarter. Net income increased $1.7 million to $2.5 million in the second quarter of 2015 from $0.8 million for the 2014 quarter. Earnings per diluted share increased to $0.23 in the June 2015 quarter from $0.07 for the same quarter last year. The 2014 quarter included approximately $2.2 million, or $0.13 per diluted share, related to defense costs.

 

Tom Glaser, USA Truck’s President and CEO, said, “USA Truck continued to deliver profitability in the second quarter. Our trucking segment’s adjusted operating ratio was 97.5%(a) for the second quarter, representing a 460 basis-point improvement over last year’s period. Pricing and fuel efficiency were better than last year, while other areas still have significant room to improve, including maintenance, risk management and, importantly, driver retention. In SCS, gross margin remained solid, reflecting steady pricing and lower fuel costs compared to the prior-year period; however, operating income declined due to lower revenue, higher purchased transportation costs and start-up expenses to support our growth plans.

 

“Accordingly, we have taken a comprehensive look at our organization to determine where and how to accelerate the pace of improvement and have developed a series of strategic, leadership and tactical actions that are either already underway or to be implemented. Among the most important trucking initiatives are:

 

 

Employing network planning tools to more efficiently utilize our revenue equipment and deploy our driver team members;

 

Strict adherence to pricing and operational standards, prioritizing return on capital employed and network density over the absolute size of our operations;

 

Increasing driver take home pay and home time through the aforementioned planning actions and an optimized scheduling and dispatch protocol;

 

Streamlining the size of our tractor fleet by 400 in 2015 through retirement of 800 high-cost tractors while maintaining purchases of new tractors at 400. These combined actions will further improve fleet fuel economy, significantly reduce maintenance costs, and increase the reliability of our equipment for the benefit of our customers and drivers;

 

Rationalizing fixed costs and SG&A to better align the Company’s overhead with a net 400 unit reduction in our tractor fleet; and

 

Completing a comprehensive review of our maintenance facilities and approach to managing preventative maintenance expenses and over the road repairs.

 

 
 

 

 

“Our goal in trucking is to realize operating income improvements of approximately $50 million over the next several years through these and other high leverage opportunities. We also expect these efforts to position the Company to respond faster and more favorably to new business opportunities and changes in market conditions.

 

“Our goal in SCS is to more fully capitalize on this scalable, asset-light complement to our trucking operation. We intend to restore the pace of growth and improve the profitability of SCS through initiatives that include the following:

 

 

Increasing load volume through further centralization of our customer service organization and roll out of technology better enabling customers to leverage our carrier partners within their enterprise;

 

Introducing additional capacity solutions and value added services to capture additional revenue streams and accelerating organic growth by expanding our footprint for both mode of service and multiple trailer types, which today is predominantly dry van trailers. This includes increasing the number of loads with our carrier partners related to intermodal, refrigerated, flatbed, expedited, and LTL;

 

Investing in branch office expansion, including through acquisitions, while critically reviewing productivity at existing branches to ensure maximum leverage of our current resources.”

 

Chairman of the Board Robert A. Peiser commented, “We are determined to energize our Company’s turnaround in the second half of 2015. We are currently pursuing all possibilities, including, but not limited to, reviewing the composition, roles and responsibilities of our senior management team; optimizing the locations and uses of our terminal and other facilities; reviewing our investments in technology; and effectively sizing our business segments based on expected financial returns. I would like to thank all of our team members for their continued hard work and dedication as we restore our momentum.”

 

Stock Repurchase Program

The Company also announced today that its Board of Directors has authorized the repurchase of up to one million shares of the Company’s common stock. Addressing this action, Mr. Peiser noted, “In recognizing the value and potential of USA Truck’s operations, I am pleased that the Board of Directors has authorized this repurchase program. Returning capital to shareholders is an important element of our capital allocation philosophy as we look to create value both organically from operations and through strategic use of our balance sheet and strong liquidity position.”

 

Share repurchases, if any, will be made using a variety of methods, which may include open market purchases, privately negotiated transactions or block trades, or any combination of such methods, in accordance with applicable insider trading and other securities laws and regulations. Share repurchases may commence as early as August 6, 2015, and the repurchase program will expire on July 28, 2018 unless earlier terminated or extended by the Board of Directors. The repurchased shares will be held as treasury stock and may be used for reissuance under the Company’s Employee Stock Purchase Plan or the Company’s 2014 Omnibus Incentive Plan, or for general corporate purposes as the Board of Directors may determine. The proposed repurchases are permitted under the Company’s primary credit facility and other contractual arrangements, subject to customary conditions.

 

The specific number of shares the Company ultimately repurchases, and the actual timing and amount of share repurchases, will depend on market conditions and other factors, as well as the applicable requirements of federal securities law. In addition, the stock repurchase program may be suspended, extended or terminated by the Company at any time without prior notice, and the Company is not obligated to purchase a specific number of shares.

 

 
 

 

  

 

Six-Month Results

For the six months ended June 30, 2015, operating revenue decreased 10.8% to $266.5 million from $298.8 million for last year’s period. Base revenue, which excludes fuel surcharges, decreased 4.1% to $232.7 million for the 2015 period from $242.6 million for the 2014 period. Net income increased $4.4 million to $3.6 million in the 2015 period from a loss of $0.9 million for the same period last year. Earnings per diluted share increased to $0.34 in 2015 from a loss of ($0.08) for the 2014 year. Included in net income and earnings per share was approximately $2.5 million, or $0.15 per diluted share, related to defense costs in the prior year period.

 

The following table includes key operating results and statistics by reportable segment:

  

   

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2015

 

2014

 

2015

 

2014

Trucking:

                               

Operating revenue (in thousands)

  $ 93,427     $ 106,146     $ 189,214     $ 208,912  

Operating income (loss) (in thousands) (1)

  $ 2,025     $ (1,734 )   $ 2,640     $ (7,855 )

Adjusted operating ratio (2)

    97.5

%

    102.1

%

    98.4

%

    104.8

%

Total miles (in thousands) (3)

    48,777       54,796       99,368       108,409  

Deadhead percentage (4)

    12.5

%

    13.0

%

    12.2

%

    12.3

%

Base revenue per loaded mile

  $ 1.883     $ 1.745     $ 1.857     $ 1.720  

Average number of in-service tractors (5)

    2,059       2,196       2,119       2,218  

Average number of seated tractors (6)

    1,869       2,019       1,929       2,040  

Average miles per seated tractor per week

    2,008       2,088       1,992       2,055  

Base revenue per seated tractor per week

  $ 3,307     $ 3,170     $ 3,246     $ 3,098  

Average loaded miles per trip

    593       614       605       618  
                                 

Strategic Capacity Solutions (7):

                               

Operating revenue (in thousands)

  $ 40,146     $ 47,152     $ 77,246     $ 89,875  

Operating income (in thousands) (1)

  $ 3,259     $ 5,991     $ 6,235     $ 11,069  

Gross margin percentage (8)

    18.1

%

    18.4

%

    17.8

%

    18.0

%

 

(1)

Operating income or loss is calculated by deducting total operating expenses from operating revenues.

(2)

Adjusted operating ratio is calculated as total operating expenses, net of fuel surcharge revenue, as a percentage of operating revenue excluding fuel surcharge revenue. See GAAP to non-GAAP reconciliation below.

(3) Total miles include both loaded and empty miles.

(4)

Deadhead percentage is calculated by dividing empty miles into total miles.

(5)

Tractors include company-operated tractors in service, plus tractors operated by independent contractors.

(6) Seated tractors are those occupied by drivers.
(7) Includes results of our rail intermodal operating business.
(8)

Gross margin percentage is calculated by taking revenue less purchased transportation expense and dividing that amount by revenue. This calculation includes intercompany revenues and expenses.

 

 
 

 

 

Balance Sheet and Liquidity

Executive Vice President and CFO Michael Borrows said, “Our balance sheet is solid and we have the liquidity to support our continuous improvement initiatives and exploit profitable growth strategies. As of June 30, 2015, our total debt and capital lease obligations, net of cash, was $85.1 million and our stockholders’ equity was $109.7 million. Our debt to Adjusted EBITDA(a) ratio continues to decrease and was 1.3x, compared with 1.9x as of December 31, 2014. Since the end of 2014, the Company's balance sheet debt and capital lease obligations, net of cash, have decreased by $32.2 million, while the outstanding obligations of financing provided by operating leases decreased by approximately $2.0 million. As of June 30, 2015, we had approximately $112.7 million of borrowing availability under our revolving line of credit. During the quarter, we also realized a $21.1 million increase in cash flow from operations, reflecting improved profitability and working capital management.”

 

Second-Quarter 2015 Conference Call Information

USA Truck will hold a conference call to discuss its second-quarter 2015 results on August 4, 2015 at 8:00 AM CT / 9:00 AM ET. To participate in the call, please dial 1-800-351-6807 (U.S. / Canada) or 1-334-323-7224 (International), access code 541247. The slide presentation that will accompany the call may be accessed using the following link:

https://www.yourcall.com/webecho/GuestLogin.aspx?ConfRef=78215399&Pin=1533.

 

For those who cannot listen to the live broadcast, the presentation materials and an audio replay of the call will be available at our website, www.usa-truck.com, under the “Presentations” tab of the “Investors” menu. A telephone replay of the call will also be available for 30 days following the call at 1-877-919-4059, access code 49596184.

 

(a)About Non-GAAP Financial Information

In addition to our GAAP results, this press release also includes certain non-GAAP financial measures, as defined by the SEC. The terms “EBITDA”, “Adjusted EBITDA”, “Adjusted operating ratio”, and “Adjusted earnings (loss) per diluted share”, as we define them, are not presented in accordance with GAAP.

 

The Company defines EBITDA as net income, plus interest expense net of interest income, provision for income taxes, and depreciation and amortization. It defines Adjusted EBITDA as these items plus non-cash equity compensation, loss on extinguishment of debt and defense costs incurred primarily in connection with the unsolicited proposal to acquire USA Truck. Adjusted operating ratio is calculated as total operating expenses, net of fuel surcharges, as a percentage of operating revenue excluding fuel surcharge revenue. Adjusted earnings (loss) per diluted share is defined as income (loss) before income taxes plus long-term claims liability reserve adjustment, loss on extinguishment of debt, and defense costs reduced by income taxes, divided by weighted average diluted shares outstanding. These financial measures supplement our GAAP results in evaluating certain aspects of our business. We believe that using these measures improves comparability in analyzing our performance because they remove the impact of items from our operating results that, in our opinion, do not reflect our core operating performance. Management and the board of directors focus on EBITDA, Adjusted EBITDA, Adjusted operating ratio and Adjusted earnings (loss) per diluted share as key measures of our performance, all of which are reconciled to the most comparable GAAP financial measures and further discussed below. We believe our presentation of these non-GAAP financial measures is useful because it provides investors and securities analysts the same information that we use internally for purposes of assessing our core operating performance.

 

 
 

 

 

EBITDA, Adjusted EBITDA, Adjusted operating ratio and Adjusted earnings (loss) per diluted share are not substitutes for their comparable GAAP financial measures, such as net income, cash flows from operating activities, operating margin, or other measures prescribed by GAAP. There are limitations to using non-GAAP financial measures. Although we believe that they improve comparability in analyzing our period to period performance, they could limit comparability to other companies in our industry if those companies define these measures differently. Because of these limitations, our non-GAAP financial measures should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis.

 

Pursuant to the requirements of Regulation G, we have provided reconciliations of EBITDA, Adjusted EBITDA, Adjusted earnings (loss) per diluted share and Adjusted operating ratio to GAAP financial measures at the end of this press release.

 

Cautionary Statement Concerning Forward-Looking Statements

Financial information in this press release is preliminary and based upon information available to the Company as of the date of this press release. As such, this information remains subject to the completion of normal quarter-end closing and interim review procedures, which could result in changes, some of which could be material, to the preliminary information provided in this press release.

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. These statements generally may be identified by their use of terms or phrases such as “expects,” “estimates,” “anticipates,” “projects,” “believes,” “plans,” “goals,” “intends,” “may,” “will,” “should,” “could,” “potential,” “continue,” “strategy,” “future” and terms or phrases of similar substance. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Accordingly, actual results may differ materially from those set forth in the forward-looking statements. Readers should review and consider the factors that may affect future results and other disclosures by the Company in its press releases, Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.  In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release might not occur.

 

All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by this cautionary statement.

 

References to the “Company,” “we,” “us,” “our” and words of similar import refer to USA Truck, Inc. and its subsidiary.

 

About USA Truck

USA Truck is a capacity solutions provider of transportation and logistics services that include truckload, dedicated contract carriage, intermodal and brokerage spot market throughout the continental United States, Mexico and Canada.

 

This press release and related information will be available to interested parties at our web site, www.usa-truck.com, under the "News Releases" tab of the "Investors" menu.

 

 
 

 

  

Company Contact

Michael Borrows, EVP & CFO

USA Truck, Inc.

(479) 471-3523

Michael.Borrows@usa-truck.com 

 

Investor Relations Contact

Harriet Fried / Jody Burfening

LHA

(212) 838-3777

hfried@lhai.com

 

 
 

 

 

USA TRUCK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(in thousands, except per share data)

 

   

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2015

 

2014

 

2015

 

2014

Revenue:

                               

Operating revenue

  $ 133,573     $ 153,298     $ 266,460     $ 298,787  
                                 

Operating expenses:

                               

Salaries, wages and employee benefits

    35,636       38,703       73,508       74,542  

Fuel expense

    16,257       30,704       34,235       63,707  

Depreciation and amortization

    10,277       11,148       20,948       22,603  

Insurance and claims

    5,903       5,903       12,097       11,887  

Operations and maintenance

    12,176       11,629       24,316       24,691  

Purchased transportation

    42,646       44,538       81,416       85,788  

Operating taxes and licenses

    1,462       1,355       2,782       2,801  

Communications and utilities

    880       1,094       1,743       2,133  

Gain on disposal of assets, net

    (2,255 )     (179 )     (2,758 )     (522 )

Other

    5,307       4,146       9,298       7,943  

Total operating expenses

    128,289       149,041       257,585       295,573  

Operating income

    5,284       4,257       8,875       3,214  
                                 

Other expenses (income):

                               

Interest expense, net

    549       744       1,179       1,455  

Defense costs

    --       2,163       --       2,528  

Loss on extinguishment of debt

    --       --       750       --  

Other, net

    370       (16 )     572       48  

Total other expenses, net

    919       2,891       2,501       4,031  

Income (loss) before income taxes

    4,365       1,366       6,374       (817 )

Income tax expense

    1,905       644       2,798       50  
                                 

Net income (loss) and comprehensive income (loss)

  $ 2,460     $ 722     $ 3,576     $ (867 )
                                 

Net income (loss) per share information:

                               

Average shares outstanding (basic)

    10,435       10,346       10,423       10,343  

Basic earnings (loss) per share

  $ 0.24     $ 0.07     $ 0.34     $ (0.08 )
                                 

Average shares outstanding (diluted)

    10,516       10,478       10,524       10,343  

Diluted earnings (loss) per share

  $ 0.23     $ 0.07     $ 0.34     $ (0.08 )

 

 
 

 

 

GAAP TO NON-GAAP RECONCILIATIONS

(UNAUDITED)

(in thousands)

 

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION

 

   

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2015

 

2014

 

2015

 

2014

                                 

Net income (loss)

  $ 2,460     $ 722     $ 3,576     $ (867 )

Add:

                               

Depreciation and amortization

    10,277       11,148       20,948       22,603  

Income tax expense

    1,905       644       2,798       50  

Interest, net

    549       744       1,179       1,455  
                                 

EBITDA

  $ 15,191     $ 13,258     $ 28,501     $ 23,241  

Add:

                               

Non-cash equity compensation

    130       103       356       219  

Legal and related defense costs, pretax

    --       2,163       --       2,528  

Loss on debt extinguishment, pretax

    --       --       750       --  
                                 

Adjusted EBITDA

  $ 15,321     $ 15,524     $ 29,607     $ 25,988  

 

  

 

ADJUSTED EARNINGS PER SHARE RECONCILIATION

 

   

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2015

 

2014

 

2015

 

2014

                                 

Earnings (loss) per diluted share

  $ 0.23     $ 0.07     $ 0.34     $ (0.08 )

Adjusted for:

                               

Loss on debt extinguishment, net of tax

    --       --       0.04       --  

Defense costs, net of tax

    --       0.13       --       0.15  

Adjusted earnings per diluted share

  $ 0.23     $ 0.20     $ 0.38     $ 0.07  

 

 

 
 

 

 

ADJUSTED OPERATING RATIO RECONCILIATION

 

Trucking Segment

 

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2015

 

2014

 

2015

 

2014

Revenue

  $ 93,846     $ 106,310     $ 190,248     $ 209,224  

Less: intersegment eliminations

    419       164       1,034       312  

Operating revenue

    93,427       106,146       189,214       208,912  

Less: fuel surcharge revenue

    13,075       22,939       27,318       45,498  

Base revenue

    80,352       83,207       161,896       163,414  

Operating expense

    91,402       107,880       186,574       216,767  

Adjusted for:

                               

Fuel surcharge revenue

    (13,075 )     (22,939 )     (27,318 )     (45,498 )

Adjusted operating expense

  $ 78,327     $ 84,941     $ 159,256     $ 171,269  

Operating ratio

    97.8

%

    101.6

%

    98.6

%

    103.8

%

Adjusted operating ratio

    97.5

%

    102.1

%

    98.4

%

    104.8

%

 

SCS Segment

 

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2015

 

2014

 

2015

 

2014

Revenue

  $ 41,605     $ 49,896     $ 80,276     $ 95,148  

Less: intersegment eliminations

    1,459       2,744       3,030       5,273  

Operating revenue

    40,146       47,152       77,246       89,875  

Less: fuel surcharge revenue

    3,275       5,390       6,450       10,709  

Base revenue

    36,871       41,762       70,796       79,166  

Operating expense

    36,887       41,161       71,011       78,806  

Adjusted for:

                               

Fuel surcharge revenue

    (3,275 )     (5,390 )     (6,450 )     (10,709 )

Adjusted operating expense

  $ 33,612     $ 35,771     $ 64,561     $ 68,097  

Operating ratio

    91.9

%

    87.3

%

    91.9

%

    87.7

%

Adjusted operating ratio

    91.2

%

    85.6

%

    91.2

%

    86.0

%

 

 
 

 

 

USA TRUCK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share data)

 

   

June 30,

 

December 31,

   

2015

 

2014

Assets

               

Current assets:

               

Cash

  $ 704     $ 205  

Accounts receivable, net of allowance for doubtful accounts of $731 and $1,020, respectively

    62,772       71,186  

Other receivables

    8,192       5,639  

Inventories

    1,944       1,863  

Assets held for sale

    7,079       3,536  

Deferred income taxes

    2,682       7,707  

Prepaid expenses and other current assets

    16,986       17,318  

Total current assets

    100,359       107,454  

Property and equipment:

               

Land and structures

    32,138       31,596  

Revenue equipment

    324,768       348,216  

Service, office and other equipment

    16,801       16,648  

Property and equipment, at cost

    373,707       396,460  

Accumulated depreciation and amortization

    (169,034 )     (182,724 )

Property and equipment, net

    204,673       213,736  

Other assets

    1,492       658  

Total assets

  $ 306,524     $ 321,848  

Liabilities and Stockholders’ Equity

               

Current liabilities:

               

Accounts payable

  $ 35,063     $ 23,582  

Current portion of insurance and claims accruals

    14,636       10,230  

Accrued expenses

    16,302       8,252  

Current maturities of long-term debt and capital leases

    18,272       24,048  

Total current liabilities

    84,273       66,112  

Deferred gain

    585       589  

Long-term debt and capital leases, less current maturities

    67,563       93,464  

Deferred income taxes

    38,081       46,688  

Insurance and claims accruals, less current portion

    6,322       9,647  

Total liabilities

    196,824       216,500  

Commitments and contingencies

           

Stockholders’ equity:

               

Preferred Stock, $.01 par value; 1,000,000 shares authorized; none issued

           

Common Stock, $.01 par value; 30,000,000 shares authorized; issued 11,985,653 shares, and 11,873,071 shares, respectively

    120       119  

Additional paid-in capital

    66,606       65,850  

Retained earnings

    64,658       61,082  

Less treasury stock, at cost (1,336,456 shares, and 1,340,438 shares, respectively)

    (21,684 )     (21,703 )

Total stockholders’ equity

    109,700       105,348  

Total liabilities and stockholders’ equity

  $ 306,524     $ 321,848