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USA Truck 2Q Profit Up as Executives Streamline, Focus on Safety

3 min read

USA Truck Inc. of Van Buren on Tuesday reported second-quarter income of $2.4 million, up from $722,000 in the same quarter of 2014.

Earnings per share rose to 23 cents compared to 7 cents in the same quarter last year. Quarterly revenue was $133.5 million, down from $153.2 million in the second quarter last year.

Revenue for the company’s trucking division was $93 million, down from $106 million in the same quarter last year, as USA Truck streamlined operations. Executives said the company plans to reduce its tractor count by a net 400 — selling off 800 used tractors and buying 400 new ones.

Total miles for the quarter dropped to 48.7 million from 54.7 million, and the average number of seated tractors dropped to 1,869 from 2,019. USA Truck raised driver pay June 1 and has concentrated on hiring more experienced drivers rather than recent graduates.

“As you’ve heard we’re implementing a lot of actions to energize USA Truck’s turnaround and get back on track,” CEO Tom Glaser said. “The efforts of all of team members are key to restoring that momentum, and we know they are dedicated to that new game plan. There is a high sense of urgency throughout the organization and we’re looking forward to our progress in the third and fourth quarters.”

The company’s Strategic Capacity Solutions business reported revenue of $40 million, down from $47 million in the second quarter of 2014. Glaser said USA Truck wanted to expand SCS through more volume and better technology and by adding segments such as intermodal, refrigerated and flatbed shipping.

Glaser said he wants to focus on maintenance and safety costs in the trucking division. The company is working on a program to improve the efficiency of its maintenance facilities, which Glaser believes will help lower costs, as will using new tractors.

Safety costs should go down with more experienced drivers — earning improved pay — since experienced drivers generally have much lower accident rates and other difficulties.

“We are going to have a better base of drivers to give better service to our customers and help us grow the business going into the future,” Glaser said. “Drivers follow trucking companies with good reputations. In the past, our reputation has not been that good. In the last 2 ½ years, we have reenergized ourselves and are building a reputation as a better carrier, which is attracting better drivers. We’ve kind of taken a step backward in order to go forward.”

CFO Michael Borrows said the company’s financials are strong enough to buy new tractors and up to 1,200 new trailers. USA Truck also announced it would initiate a program this week to buy back one million shares of its outstanding stock.

Borrows said an agent of the company would execute the purchases over time but declined to give any specific strategy or time frame of the buyback. In May, Baker Street Capital and Stone House Capital, who together owned more than one-quarter of USA Truck’s stock, sold a combined 2 million shares $19 per share in a secondary sale.

Shares of USA Truck (Nasdaq: USAK) closed at $19.62 per share Monday. On Tuesday, it traded up about 11 percent at $21.74.

“We are going to be moderately aggressive and somewhat indifference to price within our thresholds,” Borrows said. “Our intention is to acquire the full million shares over time.”

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