[Stay on top of transportation news: Get TTNews in your inbox.]
USA Truck was able to achieve a third-quarter record for revenue amid ongoing efforts to improve its culture and performance, the company reported Oct. 28.
The Van Buren, Ark.-based motor carrier posted net income of $4.8 million, or 54 cents per diluted share, for the three months ending Sept. 30. That compared with $2.3 million, 26 cents, during the same time the previous year.
Consolidated operating revenue increased 27.7%, to a quarterly record of $181 million from $141.8 million. Adjusted operating income reached a third-quarter best, increasing 71.3% to $8.19 million from $4.78 million.
“The third-quarter performance of USA Truck represents the fifth consecutive quarter of record-setting results,” CEO James Reed said during a call with investors Oct. 29. “Our team delivered the best Q3 adjusted operating income and adjusted earnings per share in our company’s history and the highest revenue quarter in the history of USA Truck. The third quarter was our second consecutive record-setting revenue quarter.”
Reed noted much of the improvements are due to continuing efforts to transform the company culture. He said the carrier remains focused on improving its asset business and logistics. It also continues to cement a culture that focuses on delivering value to shareholders.
“Our self-help story hasn’t changed since we first rolled it out just over four years ago,” Reed said. “The ingredients remain unchanged. We have refined our network, we’ve worked tirelessly to keep trucks seated and have been relentless about growing revenue per tractor.”
The trucking segment revenue for Q3 increased 16.2%, to $113.2 million from $97.3 million during the same time last year. Operating income increased 29.1%, to $4.5 million from $3.5 million. Base revenue per available tractor per week increased 19.9%. This primarily was due to an increase in base revenue per loaded mile, which increased 22% as a result of higher spot and contract pricing driven by market pressures.
Revenue in the USAT Logistics segment rose 56.7%, to $81.6 million from $52.1 million last year. Operating income increased 247.8% to $3.4 million from $981,000. The segment results reflected revenue per load increasing 37% from the prior-year quarter. Load count increased by 14.4%. Gross margin dollars increased 61.4% from last year.
“On the logistics side, we committed early on to creating a market-leading volume engine that can thrive in up and down markets alike,” Reed said. “Now that we have cracked that code, we’re now growing the team. And if the company observer looked back over that time horizon, they would see that this team does exactly what we said we would do.”
In this episode, host Michael Freeze asks, how are companies saving money by leasing trucks rather than owning? For answers, we speak with Jim Lager of Penske Truck Leasing and Al Barner of strategic fleet solutions at Fleet Advantage. Hear a snippet above, and get the full program by going to RoadSigns.TTNews.com.
Reed recalled that he said on an earnings call years ago the company culture and the people had learned to lose. Much a mindset, he noted, meant people only saw roadblocks and challenges to their aspirations. Today, there is progress that has resulted in records. Yet he noted the company is looking to make even greater strides.
“We believe that there is still great margin for growth,” Reed said. “There’s something funny about winners. They’re never satisfied. Even though we are in a period of the highest revenues and earnings in the company’s history, the tone of our internal reviews is more hungry, more opportunistic and more frustrated with the missed opportunities, then we are relishing in results.”
Cowen and Co. gave USA Truck a favorable review and noted that it is outperforming. The investment bank and financial services company focused on continued improvements for trucking segment operating ratios and logistics segment load growth as the carrier ramps up hiring. Trucking segment OR went from 95.3 from 96.4 last quarter.
“USAK posted a third quarter above our expectations as the company continues to exceed its financial objectives,” Cowen analyst Jason Seidl wrote in a report. “We see the guidance as very achievable and see room for upside if trucking initiatives continue to play out. Price target to $30 and reiterate ‘Outperform.’ ”
USA Truck ranks No. 65 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
Want more news? Listen to today's daily briefing below or go here for more info: