USA Truck Posts Net Loss on Declining Revenue in Q1
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USA Truck reported a net loss on decreased revenue during the first quarter, the company reported May 7.
The Van Buren, Ark.-based motor carrier posted a net loss of $2.6 million, or minus 30 cents per diluted share, for the three months ending March 31. That compared with a profit of $1.5 million, or 18 cents per diluted share, during the 2019 period. Operating revenue decreased by 5.4% to $126.8 million from $134 million.
The results were close to expectations by investment analysts on Wall Street, which had been looking for a loss of 31 cents per share and quarterly revenue of $126.3 million, according to Zacks Consensus Estimate.
USA Truck CEO James Reed noted in the report the impact of operational improvements was muted by a tough pricing environment early on. That was further complicated by the coronavirus pandemic later in the quarter. Still, he praised his team for rising to the challenges.
Reed
“We had expected the first quarter of this year to look a lot like the fourth quarter of last year,” Reed said during a conference call after the report was released. “Freight trends were consistent, rate pressure continued to carry over, and January and February, seasonality was in line with normal demand cycles. Then the impact of the COVID-19 pandemic came into clearer focus, and our business implications likewise became clearer.”
Reed noted the results for the quarter were not at the levels they were hoping for, but were notably better than what was seen during the previous quarter. Last year was tough for many in the trucking industry with the market being soft.
“While there was no way to fully anticipate the arc of the virus’ impact, our team was able to respond capably and decisively,” Reed said. “This was a direct result of the experience we had in the 500-year flood just last year, and through our enterprise risk assessment and emergency response planning that we perform annually.”
Reed detailed how that prior experience required overnight relocation of assets, remote work arrangements and emergency communication protocols. All of which translated as useful actions during the currently ongoing coronavirus pandemic.
“Looking at the segment performance within the quarter, it was generally encouraging,” Reed said. “The trucking segment continued progress towards our self-help improvement plan on a few different vectors. On the cost front, and in a continuing effort to manage our costs lower
Reed also said in the earnings report that many of their operational initiatives took hold during the quarter. He pointed to loaded miles per available truck increased, empty miles decreased and unseated truck-count metrics improved.
The trucking segment saw revenue decrease 1% during the quarter to $93.9 million from $94.9 million during the same time last year. The operating loss was $1.7 million compared with an operating income of $1.6 million.
The USAT Logistics segment saw operating revenue decrease 13.6% for the quarter to $35.8 million from $41.4 million during the year-ago quarter. The operating loss was $624,000 compared with an operating income of $2.3 million.
Stifel noted in a report management was constructive on quarter-to-date trends during the earnings call. The company cited positive earnings before interest and taxes in April. That implies numbers should be better than previously anticipated in the second quarter.
RELATED: USA Truck Appoints New Senior Vice President, Chief Financial Officer
“Much will depend on the timeline and magnitude of the economic reopening, of course, but in almost any scenario, May and June should be better than April,” David Ross, research managing director at Stifel, said in the report. “While we have concerns about the aging tractor fleet, we believe there is still significant long-term opportunity here when the truckload market becomes favorable.”
USA Truck started with fewer than 10 tractors when it was founded in 1983 as Crawford Produce. The company has expanded to include more than 2,000 driving team members.
USA Truck ranks No. 64 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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