Posted 8/22/2011 05:11 pm
Updated 1 year ago
Cliff Beckham, president and CEO of USA Truck Inc. of Van Buren, on Monday announced that the company was expecting a net loss for third-quarter 2011, pointing primarily to difficulties implementing new management software.
"It is too early in the quarter to predict a range of expected net loss," Beckham said in a company statement. "This compares with net income of $600,000, or 6 cents per share, for the third quarter of 2010. We believe the main factor is a temporary but significant decrease in the efficiency of our truckload operations associated with our efforts in implementing our new enterprise management software. We are actively addressing this issue and expect the negative impact to be short-term."
In July, the trucking company reported a return to profitability in the second quarter, but that profit was down 33 percent compared with the second quarter of 2010.
USA Truck reported a profit of $600,000, or 6 cents per share, during the second quarter of this year compared with profit of $900,000, or 9 cents per share, during the same quarter last year.
The company last month said earnings during the second quarter came on base revenue of $108.5 million, up 14.3 percent from $94.9 million during the same quarter last year.
On a six-month basis, however, the company's net loss deepened, growing to $2.12 million, or 21 cents per share, from a net loss of $2.10 million, 20 cents per share, during the same period in 2010. But base revenue increased 13 percent to $208.1 million for the six-month period.
Beckham said in his statement Monday, regarding the company's third-quarter expectations, that "On July 7, 2011, after several months of planning and testing, we implemented live usage of the new operating system across our Trucking operations. We had previously implemented the software for our Strategic Capacity Solutions and Intermodal operations.
"During the month of July and continuing into the first part of August, we have experienced unanticipated difficulties with load visibility, load planning, and load dispatching associated with the transition," Beckham said. "These issues became apparent upon live cutover because of the huge transactional volume in comparison with the volumes experienced during testing. We had planned for a modest reduction of efficiency during July associated with initial live usage and refinement of the new system. The magnitude and duration of the reduction in efficiency have been greater than we anticipated.
"We also believe the drop in efficiency is related in part to a deterioration in general truckload market conditions. Our average loaded rate per mile and the percentage of loads moved in our Spider Web network remain within our range of expectations. But our velocity, miles per tractor per week, and empty mile factor have been impacted. Revenue miles were approximately 15% below those experienced in July 2010 but they are trending somewhat better during the first half of August.
"Our entire executive and operations teams are dedicated to correcting these problems, and we are gaining some improvement in August."