USA Truck Reports Earnings, Revenue Growth for Q1
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USA Truck posted increased year-over-year profits and revenue during the first quarter, the company reported April 28.
The Van Buren, Ark.-based motor carrier posted net income of $13.1 million, or $1.45 a diluted share, for the three months ended March 31. That represents a 265% improvement over $3.6 million, or 40 cents, during the 2021 period.
Total operating revenue increased by 26.8% to $201.1 million from $158.5 million.
“The first-quarter performance at USA Truck represents the seventh consecutive quarter of record-setting results,” USA Truck CEO James Reed said during a call with investors April 29. “Our team delivered the best Q1 adjusted operating income and adjusted earnings per share in our company history and the highest revenue quarter in the history of USA Truck. The first quarter was also our fourth consecutive record-setting revenue quarter.”
Reed
Reed added the company needed an operational and financial overhaul. He noted the task was to bring industry-level results with more consistency and predictability over time. But now he is confident that has been achieved.
“USA Truck now has among the highest performing businesses in this sector with a trailing 12-month return on invested capital of 14.1% and a trailing 12-month adjusted earnings per share of $3.93,” Reed said. “The approach has never changed as we took specific measures to de-risk and bring resilience to the business that we feel will endure through all cycles.”
USA Truck re-engineered its network to optimize profitability while growing its dedicated and quasi-dedicated portfolio to just under 40% of the trucking segment. This was done because those operations are less volatile, more cycle-resistant and predictably profitable. The company also stayed focused on contract rate over spot as well.
“We have shifted our revenue in asset-light and nonasset businesses to approximately 65% of the business,” Reed said. “This creates higher returns on capital and a more consistent margin construct, especially in our owner-operator business, which makes up 27% of the trucking segment. Each of these constructs reduce the inherent risk of downward pressure on financial results.”
Consolidated operating ratio increased to 90.7 during the recent quarter from 96.2 last year. Reed noted management has focused on executing an operating strategy and strategic initiatives that helped drive the results.
Salaries, wages and employee benefits marked the biggest operating expense, increasing 14.6% to $41.9 million from $36.6 million a year earlier. That was followed by fuel expenses, which increased 49% to $17 million from $11.4 million. Depreciation and amortization came next, decreasing 16% to $8.02 million from $9.57 million.
The trucking segment reported operating revenue for first quarter increased 12.6% to $116.1 million from $103.1 million during the same time last year. Operating income surged 259% to $12.6 million from $3.52 million. This primarily was driven by an improved operating ratio.
Base revenue per available tractor per week in the trucking segment increased 11.8% year-over-year, while base revenue per loaded mile increased 16.7%. But loaded miles per available tractor per week decreased 4.2%, while the average number of seated tractors decreased 3.7%.
The USAT Logistics segment reported operating revenue increased 42.5% to $97.4 million from $68.4 million the prior year. Operating income increased 140% to $6.06 million from $2.52 million. The segment results reflected an operating ratio improvement. The logistics segment saw gross margin dollars increase 61.2% year-over-year to $13.3 million. Revenue per load increased 14.2%, while load count increased by 24.8%.
Cowen and Co. said the adjusted earnings per share of $1.48 more than doubled its estimate of 72 cents and the consensus of 76 cents. The investment bank and financial services company noted sequential operating ratio improvements in both business units led to higher than anticipated profits in the quarter.
“USAK saw continued strength in both its trucking and logistics division, with impressive margin expansion as pricing trends hold, driving profitability to produce an adjusted EPS 1Q record,” Cowen analyst Jason Seidl wrote in a report. “[Second-quarter] trends remain strong and growth within its dedicated segment should aid USAK in the event of freight softness.”
USA Truck ranks No. 65 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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