[ X ]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
USA TRUCK, INC.
|
||
(Exact
Name of Registrant as Specified in Its Charter)
|
Delaware
|
71-0556971
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
employer identification no.)
|
|
3200 Industrial Park Road
|
||
Van Buren, Arkansas
|
72956
|
|
(Address
of principal executive offices)
|
(Zip
code)
|
(479)
471-2500
|
||||||
(Registrant’s
telephone number, including area code)
|
||||||
Not
applicable
|
||||||
(Former
name, former address and former fiscal year, if changed since last
report)
|
|
USA
TRUCK, INC.
|
|
||
|
TABLE
OF CONTENTS
|
|
||
|
|
|||
Item
No.
|
|
Caption
|
|
Page
|
1.
|
Financial Statements
|
|||
Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009
(unaudited)
|
3
|
|||
Consolidated Statements of Operations (unaudited) – Three Months Ended
March 31, 2010 and March 31, 2009
|
4
|
|||
Consolidated Statement of Stockholders’ Equity (unaudited) – Three Months
Ended March 31, 2010
|
5
|
|||
Consolidated Statements of Cash Flows (unaudited) – Three Months Ended
March 31, 2010 and March 31, 2009
|
6
|
|||
Notes to Consolidated Financial Statements (unaudited)
|
7
|
|||
2.
|
Management’s Discussion and Analysis of Financial Condition and Results of
Operations
|
17
|
||
3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
29
|
||
4.
|
Controls and Procedures
|
29
|
||
PART
II – OTHER INFORMATION
|
||||
1.
|
Legal
Proceedings
|
30
|
||
1A.
|
Risk Factors
|
30
|
||
2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
31
|
||
3.
|
Defaults Upon Senior Securities
|
32
|
||
4.
|
|
Removed
and Reserved
|
32
|
|
5.
|
Other Information
|
32
|
||
6.
|
Exhibits
|
33
|
||
Signatures
|
34
|
ITEM
1.
|
FINANCIAL
STATEMENTS
|
USA
TRUCK, INC.
|
|||||
CONSOLIDATED
BALANCE SHEETS
|
|||||
(UNAUDITED)
|
|||||
(in
thousands, except share amounts)
|
|||||
March
31,
|
December
31,
|
||||
2010
|
2009
|
||||
Assets
|
|||||
Current
assets:
|
|||||
Cash
and cash equivalents
|
$
|
828
|
$
|
797
|
|
Accounts
receivable:
|
|||||
Trade,
less allowance for doubtful accounts of $478 in 2010 and $443 in 2009
|
43,312
|
37,018
|
|||
Income
tax
receivable
|
10,163
|
10,498
|
|||
Other
|
2,557
|
1,070
|
|||
Inventories
|
1,663
|
1,541
|
|||
Deferred
income
taxes
|
--
|
962
|
|||
Prepaid
expenses and other current
assets
|
11,164
|
7,931
|
|||
Total
current
assets
|
69,687
|
59,817
|
|||
Property
and equipment:
|
|||||
Land
and
structures
|
33,896
|
33,819
|
|||
Revenue
equipment
|
369,087
|
364,087
|
|||
Service,
office and other
equipment
|
31,774
|
28,846
|
|||
434,757
|
426,752
|
||||
Accumulated
depreciation and
amortization
|
(157,584)
|
(156,331)
|
|||
277,173
|
270,421
|
||||
Other
assets
|
462
|
462
|
|||
Total
assets
|
$
|
347,322
|
$
|
330,700
|
|
Liabilities
and Stockholders’ equity
|
|||||
Current
liabilities:
|
|||||
Bank
drafts
payable
|
$
|
4,628
|
$
|
5,678
|
|
Trade
accounts
payable
|
15,617
|
9,847
|
|||
Current
portion of insurance and claims
accruals
|
4,981
|
4,356
|
|||
Accrued
expenses
|
11,399
|
9,008
|
|||
Note
payable
|
679
|
1,015
|
|||
Current
maturities of long-term debt and capital leases
|
16,242
|
63,461
|
|||
Deferred
income
taxes
|
45
|
--
|
|||
Total
current liabilities
|
53,591
|
93,365
|
|||
Long-term
debt and capital leases, less current
maturities
|
101,079
|
39,116
|
|||
Deferred
income
taxes
|
50,355
|
53,073
|
|||
Insurance
and claims accruals, less current
portion
|
4,631
|
4,600
|
|||
Stockholders’
equity:
|
|||||
Preferred
Stock, $0.01 par value; 1,000,000 shares authorized; none
issued
|
--
|
--
|
|||
Common
Stock, $0.01 par value; authorized 30,000,000 shares; issued 11,837,662
shares in 2010 and 11,834,285 shares in 2009
|
118
|
118
|
|||
Additional
paid-in
capital
|
64,693
|
64,627
|
|||
Retained
earnings
|
94,527
|
97,523
|
|||
Less
treasury stock, at cost (1,328,500 shares in 2010 and 1,332,500
shares in 2009)
|
(21,610)
|
(21,661)
|
|||
Accumulated
other comprehensive
loss
|
(62)
|
(61)
|
|||
Total
stockholders’
equity
|
137,666
|
140,546
|
|||
Total
liabilities and stockholders’
equity
|
$
|
347,322
|
$
|
330,700
|
USA
TRUCK, INC.
|
|||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||||
(UNAUDITED)
|
|||||
(in
thousands, except per share data)
|
|||||
Three
Months Ended
|
|||||
March
31,
|
|||||
2010
|
2009
|
||||
Revenue:
|
|||||
Trucking
revenue
|
$
|
82,962
|
$
|
79,992
|
|
Strategic
Capacity Solutions revenue
|
6,264
|
2,849
|
|||
Base
revenue
|
89,226
|
82,841
|
|||
Fuel
surcharge revenue
|
16,408
|
10,655
|
|||
Total
revenue
|
105,634
|
93,496
|
|||
Operating
expenses and costs:
|
|||||
Salaries,
wages and employee benefits
|
33,227
|
32,764
|
|||
Fuel
and fuel taxes
|
28,395
|
20,836
|
|||
Purchased
transportation
|
15,605
|
9,647
|
|||
Depreciation
and amortization
|
12,499
|
12,548
|
|||
Operations
and maintenance
|
7,664
|
7,430
|
|||
Insurance
and claims
|
6,070
|
5,637
|
|||
Operating
taxes and licenses
|
1,393
|
1,603
|
|||
Communications
and utilities
|
946
|
1,006
|
|||
(Gain)
loss on disposal of revenue equipment, net
|
(7)
|
19
|
|||
Other
|
3,340
|
3,640
|
|||
Total
operating expenses and costs
|
109,132
|
95,130
|
|||
Operating
loss
|
(3,498)
|
(1,634)
|
|||
Other
expenses (income):
|
|||||
Interest
expense
|
769
|
881
|
|||
Other,
net
|
51
|
(19)
|
|||
Total
other expenses, net
|
820
|
862
|
|||
Loss
before income taxes
|
(4,318)
|
(2,496)
|
|||
Income
tax benefit
|
(1,322)
|
(616)
|
|||
Net
loss
|
$
|
(2,996)
|
$
|
(1,880)
|
|
Per
share information:
|
|||||
Average
shares outstanding (Basic)
|
10,277
|
10,213
|
|||
Basic
loss per share
|
$
|
(0.29)
|
$
|
(0.18)
|
|
Average
shares outstanding (Diluted)
|
10,277
|
10,213
|
|||
Diluted
loss per share
|
$
|
(0.29)
|
$
|
(0.18)
|
USA
TRUCK, INC.
|
||||||||||||||||||||||
CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||||
(UNAUDITED)
|
||||||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||
Common
|
Accumulated
|
|||||||||||||||||||||
Stock
|
Additional
Paid-in
Capital
|
Other
|
||||||||||||||||||||
Par
|
Retained
|
Treasury
|
Comprehensive
|
|||||||||||||||||||
Shares
|
Value
|
Earnings
|
Stock
|
Loss
|
Total
|
|||||||||||||||||
Balance at December 31, 2009
|
11,834
|
$
|
118
|
$
|
64,627
|
$
|
97,523
|
$
|
(21,661)
|
$
|
(61)
|
$
|
140,546
|
|||||||||
Exercise
of stock options
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Excess tax benefit on exercise of stock options
|
--
|
--
|
8
|
--
|
--
|
--
|
8
|
|||||||||||||||
Stock-based compensation
|
--
|
--
|
109
|
--
|
--
|
--
|
109
|
|||||||||||||||
Restricted
stock award grant
|
3
|
--
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Retirement of forfeited restricted stock
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Change in fair value of interest rate swap, net of income tax benefit of
$(14)
|
--
|
--
|
--
|
--
|
--
|
(22)
|
(22)
|
|||||||||||||||
Reclassification of derivative net losses to statement of operations, net
of income tax of $13
|
--
|
--
|
--
|
--
|
--
|
21
|
21
|
|||||||||||||||
Return of forfeited restricted stock upon termination of the
2003 Restricted Stock Award Plan
|
--
|
--
|
(51)
|
--
|
51
|
--
|
--
|
|||||||||||||||
Net loss
|
--
|
--
|
--
|
(2,996)
|
--
|
--
|
(2,996)
|
|||||||||||||||
Balance at March 31, 2010
|
11,837
|
$
|
118
|
$
|
64,693
|
$
|
94,527
|
$
|
(21,610)
|
$
|
(62)
|
$
|
137,666
|
USA
TRUCK, INC.
|
||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||
(UNAUDITED)
|
||||||
(in
thousands)
|
||||||
Three
Months Ended
|
||||||
March
31,
|
||||||
2010
|
2009
|
|||||
Operating
activities
|
||||||
Net
loss
|
$
|
(2,996)
|
$
|
(1,880)
|
||
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||||
Depreciation
and
amortization
|
12,499
|
12,548
|
||||
Provision
for doubtful
accounts
|
45
|
59
|
||||
Deferred
income
taxes
|
(1,711)
|
(150)
|
||||
Stock-based
compensation
|
109
|
112
|
||||
(Gain)
loss on disposal of revenue equipment,
net
|
(7)
|
19
|
||||
Changes
in operating assets and liabilities:
|
||||||
Accounts
receivable
|
(7,491)
|
(107)
|
||||
Inventories
and prepaid
expenses
|
(3,355)
|
(1,850)
|
||||
Trade
accounts payable and accrued
expenses
|
6,839
|
(2,764)
|
||||
Insurance
and claims
accruals
|
656
|
(1,571)
|
||||
Net
cash provided by operating
activities
|
4,588
|
4,416
|
||||
Investing
activities
|
||||||
Purchases
of property and equipment
|
(22,160)
|
(10,578)
|
||||
Proceeds
from sale of property and equipment
|
4,237
|
933
|
||||
Change
in other assets
|
--
|
5
|
||||
Net
cash used in investing
activities
|
(17,923)
|
(9,640)
|
||||
Financing
activities
|
||||||
Borrowings
under long-term debt
|
38,694
|
22,685
|
||||
Principal
payments on long-term debt
|
(20,912)
|
(9,685)
|
||||
Principal
payments on capitalized lease obligations
|
(3,038)
|
(8,842)
|
||||
Principal
payments on note payable
|
(336)
|
(424)
|
||||
Net
(decrease) increase in bank drafts payable
|
(1,050)
|
1,808
|
||||
Proceeds
from exercise of stock options
|
--
|
39
|
||||
Excess
tax benefit from exercise of stock options
|
8
|
--
|
||||
Net
cash provided by financing
activities
|
13,366
|
5,581
|
||||
Increase
in cash and cash
equivalents
|
31
|
357
|
||||
Cash
and cash equivalents:
|
||||||
Beginning
of
period
|
797
|
1,541
|
||||
End
of
period
|
$
|
828
|
$
|
1,898
|
||
Supplemental
disclosure of cash flow information:
|
||||||
Cash
paid during the period for:
|
||||||
Interest
|
$
|
753
|
$
|
599
|
||
Income
taxes
|
--
|
1,999
|
||||
Supplemental
disclosure of non-cash investing activities:
|
||||||
Liability
incurred for leases on revenue equipment
|
--
|
--
|
||||
Purchases
of revenue equipment included in accounts payable
|
1,321
|
--
|
Grant
Date
|
Restricted
Shares
|
Number
of shares under options
|
Value
(1)
|
||||
2009:
|
|||||||
February
2
|
5,196
|
12,482
|
$
|
14.18
|
|||
May
1
|
5,307
|
16,740
|
13.88
|
||||
August
3
|
4,997
|
15,291
|
14.50
|
||||
November
2
|
6,478
|
20,949
|
11.19
|
||||
2010:
|
|||||||
February
1
|
3,250
|
11,222
|
12.21
|
(1)
|
The
shares were valued at the closing price of the Company’s Common Stock on
the date of grant.
|
2010
|
2009
|
||
Dividend
yield
|
0%
|
0%
|
|
Expected
volatility
|
32.8%
|
36.5
- 53.1%
|
|
Risk-free
interest rate
|
1.6%
|
1.4%
|
|
Expected
life (in years)
|
4.25
|
4.13
- 4.25
|
Number
of Options
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Life (in years)
|
Aggregate
Intrinsic Value (1)
|
|||||||
Outstanding
- beginning of year
|
201,446
|
$
|
16.25
|
|||||||
Granted
|
11,222
|
12.21
|
||||||||
Exercised
|
(600)
|
11.47
|
$
|
1,860
|
||||||
Cancelled/forfeited
|
(1,159)
|
13.08
|
||||||||
Expired
|
(3,000)
|
19.62
|
||||||||
Outstanding
at March 31, 2010
|
207,909
|
$
|
16.01
|
2.7
|
$
|
438,428
|
||||
Exercisable
at March 31, 2010 (2)
|
81,500
|
$
|
16.02
|
0.6
|
$
|
201,822
|
||||
(1)
|
The
intrinsic value of outstanding and exercisable stock options is determined
based on the amount by which the market value of the underlying stock
exceeds the exercise price of the option. The per share market
value of our Common Stock, as determined by the closing price on March 31,
2010 (the last trading day of the quarter) was
$16.16.
|
(2)
|
The
fair value of options exercisable at March 31, 2010 was approximately $0.5
million.
|
Number
of Shares Under Options
|
Weighted
Average Fair Value
|
|||
Nonvested
options – December 31, 2009
|
117,096
|
$
|
6.87
|
|
Granted
|
11,222
|
3.54
|
||
Forfeited
|
(1,159)
|
4.37
|
||
Vested
|
(750)
|
13.19
|
||
Nonvested
options – March 31, 2010
|
126,409
|
$
|
6.56
|
Exercise
Price
|
Number
of Options Outstanding
|
Weighted-Average
Remaining Contractual Life (in years)
|
Number
of Options Exercisable
|
||||
$
|
11.19
|
20,626
|
4.3
|
--
|
|||
11.47
|
39,800
|
0.6
|
39,800
|
||||
12.21
|
11,064
|
5.3
|
--
|
||||
12.66
|
4,000
|
0.8
|
4,000
|
||||
13.88
|
16,219
|
4.3
|
--
|
||||
14.18
|
12,094
|
4.3
|
--
|
||||
14.50
|
17,456
|
4.4
|
500
|
||||
15.83
|
5,000
|
4.4
|
1,000
|
||||
17.06
|
24,000
|
2.3
|
9,600
|
||||
22.54
|
52,400
|
1.8
|
23,600
|
||||
22.93
|
3,000
|
0.6
|
1,500
|
||||
30.22
|
2,250
|
1.8
|
1,500
|
||||
207,909
|
2.7
|
81,500
|
|||||
Number
of Shares
|
Weighted
Average Fair Value
|
|||
Nonvested
shares – December 31, 2009
|
4,000
|
$
|
27.66
|
|
Granted
|
--
|
--
|
||
Forfeited
|
--
|
--
|
||
Vested
|
--
|
--
|
||
Nonvested
shares – March 31, 2010
|
4,000
|
$
|
27.66
|
Number
of Shares
|
Weighted
Average Fair Value
|
|||
Nonvested
shares – December 31, 2009
|
221,810
|
$
|
12.24
|
|
Granted
|
3,250
|
12.21
|
||
Forfeited
|
(382)
|
13.16
|
||
Vested
|
--
|
--
|
||
Nonvested
shares – March 31, 2010
|
224,678
|
$
|
12.24
|
(in
thousands)
|
|||||
Three
Months
|
Three Months
|
||||
Ended
|
Ended
|
||||
March
31, 2010
|
March 31, 2009
|
||||
Net
loss
|
$
|
(2,996)
|
$
|
(1,880)
|
|
Change
in fair value of interest rate swap, net of income tax benefit of $(14)
for the three months ended March 31, 2010, and net of income tax benefit
of $(44) for the three months ended March 31, 2009
|
(22)
|
(71)
|
|||
Reclassification
of derivative net losses to statement of operations, net of income tax of
$13 for the three months ended March 31, 2010, and net of income tax of
$39 for the three months ended March 31, 2009
|
21
|
63
|
|||
Total
comprehensive
loss
|
$
|
(2,997)
|
$
|
(1,888)
|
(in
thousands)
|
|||||||||||
Total
Fair Value Assets (Liabilities) at
March
31, 2010
|
Quoted
Prices in Active Markets for Identical Assets
(Level
1)
|
Significant
Other Observable Inputs
(Level
2)
|
Significant
Unobservable Inputs
(Level
3)
|
||||||||
Derivative
Liabilities
|
$
|
(62)
|
$
|
--
|
$
|
(62)
|
$
|
--
|
(in
thousands)
|
||||||
March
31,
|
December
31,
|
|||||
2010
|
2009
|
|||||
Salaries,
wages and employee
benefits
|
$
|
5,168
|
$
|
3,966
|
||
Other
(1)
|
6,231
|
5,042
|
||||
Total
accrued
expenses
|
$
|
11,399
|
$
|
9,008
|
|
(1)
|
As
of March 31, 2010 and December 31, 2009, no single item included within
other accrued expenses exceeded 5.0% of our total current
liabilities.
|
NOTE
10 – NOTE PAYABLE
|
|
(in
thousands)
|
|||||||
March
31,
|
December
31,
|
||||||
2010
|
2009
|
||||||
Revolving
credit agreement (1)
|
$
|
64,500
|
$
|
46,718
|
|||
Capitalized
lease obligations (2)
|
52,821
|
55,859
|
|||||
117,321
|
102,577
|
||||||
Less
current maturities
|
(16,242)
|
(63,461)
|
|||||
Long-term
debt and capital leases, less current maturities
|
$
|
101,079
|
$
|
39,116
|
|||
(1)
|
Our
Amended and Restated Senior Credit Facility provides for available
borrowings of $100.0 million, including letters of credit not exceeding
$25.0 million. Availability may be reduced by a borrowing base
limit as defined in the Facility. At March 31, 2010, we had
approximately $64.5 million in borrowings and $1.8 million in letters of
credit outstanding, with $33.7 million available under the
Facility. The Facility is scheduled to mature on September 1,
2010. The Facility provides an accordion feature allowing us to
increase the maximum borrowing amount by up to an additional $75.0 million
in the aggregate in one or more increases no less than nine months prior
to the maturity date, subject to certain
conditions. Accordingly, the Facility can be increased to
$175.0 million at our option, with the additional availability provided by
the current lenders, at their election, or by other lenders. At
this time, the Company does not anticipate the need to exercise the
accordion feature or, if needed, we do not expect to encounter any
difficulties in doing so. The Facility bears variable interest
based on the type of borrowing and on the agent bank’s prime rate, or
federal funds rate plus a certain percentage, or the London Interbank
Offered Rate plus a certain percentage, which is determined based on our
attainment of certain financial ratios. The interest rate on
our overnight borrowings under the Facility at March 31, 2010 was
3.25%. The interest rate including all borrowings made under
this facility at March 31, 2010 was 1.6%. The interest rate on
the Company’s borrowings under the facility for the three months ended
March 31, 2010 was 1.7%. A quarterly commitment fee is payable
on the unused portion of the credit line and bears a rate which is
determined based on our attainment of certain financial
ratios. At March 31, 2010, the rate was 0.25% per
annum. The Facility is collateralized by revenue equipment
having a net book value of $175.0 million at March 31, 2010, and all trade
and other accounts receivable. The Facility requires us to meet
certain financial covenants and to maintain a minimum tangible net worth
of approximately $133.9 million at March 31, 2010. We were in
compliance with these covenants at March 31, 2010. The
covenants would prohibit the payment of dividends by us if such payment
would cause us to be in violation of any of the covenants. The
carrying amount reported in the balance sheet for borrowings under the
Facility approximates its fair value as the applicable interest rates
fluctuate with changes in current market
conditions.
|
|
(2)
|
Our
capitalized lease obligations have various termination dates extending
through March 2013 and contain renewal or fixed price purchase
options. The effective interest rates on the leases range from
3.2% to 4.8% at March 31, 2010. The lease agreements require us
to pay property taxes, maintenance and operating
expenses.
|
NOTE
14 –
CHANGE IN ACCOUNTING ESTIMATE
|
|
(in
thousands, except per share amounts)
|
|||||
Three
Months Ended
|
|||||
March
31,
|
|||||
2010
|
2009
|
||||
Numerator:
|
|||||
Net
loss
|
$
|
(2,996)
|
$
|
(1,880)
|
|
Denominator:
|
|||||
Denominator
for basic loss per share – weighted average shares
|
10,277
|
10,213
|
|||
Effect
of dilutive securities:
|
|||||
Employee
stock
options
|
--
|
--
|
|||
Denominator
for diluted loss per share – adjusted weighted average shares and assumed
conversions
|
10,277
|
10,213
|
|||
Basic
loss per
share
|
$
|
(0.29)
|
$
|
(0.18)
|
|
Diluted
loss per
share
|
$
|
(0.29)
|
$
|
(0.18)
|
|
Weighted
average anti-dilutive employee stock
options
|
156
|
113
|
ITEM
2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
|
|
·
|
General
Freight. Our General Freight service offering provides
truckload freight services as a short- to medium-haul common
carrier. We have provided General Freight services since our
inception and we derive the largest portion of our revenue from these
services.
|
·
|
Dedicated
Freight. Our Dedicated Freight service offering is a
variation of our General Freight service, whereby we agree to make our
equipment and drivers available to a specific customer for shipments over
particular routes at specified times. In addition to serving
specific customer needs, our Dedicated Freight service offering also aids
in driver recruitment and
retention.
|
·
|
Trailer-on-Flat-Car. Our
Trailer-on-Flat-Car service offering uses Company-owned trailers via rail
intermodal service to provide our customers cost savings over General
Freight with a slightly slower transit speed. It also allows us
to reposition our equipment to maximize our freight network
yield.
|
·
|
Freight Brokerage. Our
Freight Brokerage service offering matches customer shipments with
available equipment of other carriers when it is not feasible to use our
own equipment.
|
·
|
Container-on-Flat-Car. Our
Container-on-Flat-Car service offering is a rail intermodal service which
matches customer shipments with available containers of other carriers
when it is not feasible to use our own
equipment.
|
·
|
Our
organizational structure, non-driver headcount, depth of talent, cost
structure, overall safety program and technology platforms have improved
immensely over the past two years.
|
·
|
The
diversification of our service offerings is gaining
traction. Base revenue from Freight Brokerage services grew
133.9% to $6.2 million, and Intermodal base revenue (Trailer-on-Flat-Car
and Container-on-Flat-Car) grew 44.8% to $2.3 million. These
services, representing 9.6% of our base revenue during the quarter, are
making more significant contributions to our results today than ever
before. Our efforts to integrate and cross-sell these
asset-light services with our traditional Trucking services are also
gaining traction. During the quarter, 16 of our top 25
customers by revenue utilized multiple
services.
|
·
|
The
most significant VEVA initiatives involve the complete makeover of our
General Freight Trucking services, which accounted for 86.1% of our base
revenue during the quarter. The focus of the makeover is our
Spider Web freight network, which is designed to optimize lane density and
pricing within a specific mix of traffic lanes. The Spider Web
design was completed and introduced during the third quarter of
2009. Our progress since then has been
promising.
|
o
|
Only
33.8% of our loads moved in Spider Web lanes during the first half of
2009. That number increased slightly to 35.0% during the fourth
quarter of 2009. However, we have focused intensely on winning
Spider Web lane volume during the current customer freight bidding
season. To support our strategy, we developed proprietary
pricing software and implemented a more effective process to price
customer bids. While we have only received the results on a
handful of the approximately 100 bids in which we have participated since
late 2009, we have been very pleased with our success, as our Spider Web
compliance rate improved to 38.1% during the first quarter and is above
40% in April.
|
o
|
The
effects of that Spider Web freight are evident in our operational
data. Our length-of-haul declined 13.1% to 566 miles this
quarter, and our revenue per loaded mile increased 2.4% to $1.50, the
highest in our history.
|
·
|
We
experienced the highest load count in our history during the quarter which
drove our Velocity (loads per truck per week) to a new high of 3.24
turns.
|
·
|
Tractor
utilization, as measured by miles per truck per week, improved slightly
(1.5% to 2,040 miles), but remains too low. We expect
utilization to continue improving as we build density in Spider Web
lanes.
|
·
|
Empty
miles as a percentage of total miles improved 1.3 percentage
points. Coupled with our elevated base revenue per loaded mile,
the lower empty mile factor helped push our base revenue per total mile up
3.9% to $1.35, another all-time Company
high.
|
·
|
We
have internally developed several technology tools and measurements to aid
our operating personnel in the daily execution of their job functions and
we continue to work closely with our people to improve their performance
capabilities. We have divided our Trucking operations into nine
geographic regions, and several of them produced at a seven to eleven
percent operating margin during March. Our most profitable
regions have the highest rates of Spider Web lane
compliance.
|
·
|
Fuel
prices increased steadily throughout the quarter. Our cost per
gallon, net of fuel surcharge recoveries, increased 20.6%. The
surcharge is designed to approximately offset increases above an
agreed-upon baseline price per gallon. However, because our
fuel surcharge recovery lags behind changes in actual diesel prices, we
generally do not recover the increased costs we are paying for fuel when
actual prices are rising, as in the current quarter. That, in
addition to a nearly one percent reduction in miles per gallon caused by
unusually cold weather, created a $0.14 per share increase in net fuel
cost this quarter compared to the first quarter of
2009.
|
·
|
Severe
winter weather also caused an increase in our accident frequencies beyond
typical seasonality. After several quarters of improving
insurance and claims experience, we incurred a substantial increase during
the first quarter of 2010, which we estimate cost approximately $0.06 per
share. Thus far in April, accident frequencies and related
costs have decreased to expected
levels.
|
Three
Months Ended
|
|||||
March
31,
|
|||||
2010
|
2009
|
||||
Base
revenue
|
100.0
|
%
|
100.0
|
%
|
|
Operating
expenses and costs:
|
|||||
Salaries,
wages and employee
benefits
|
37.2
|
39.6
|
|||
Fuel
and fuel taxes
(1)
|
14.7
|
12.6
|
|||
Purchased
transportation
(2)
|
16.3
|
11.4
|
|||
Depreciation
and
amortization
|
14.0
|
15.1
|
|||
Operations
and
maintenance
|
8.6
|
9.0
|
|||
Insurance
and
claims
|
6.8
|
6.8
|
|||
Operating
taxes and
licenses
|
1.5
|
1.9
|
|||
Communications
and
utilities
|
1.1
|
1.2
|
|||
Gain
on disposal of revenue equipment,
net
|
--
|
--
|
|||
Other
|
3.7
|
4.4
|
|||
Total
operating expenses and
costs
|
103.9
|
102.0
|
|||
Operating
loss
|
(3.9)
|
(2.0)
|
|||
Other
expenses (income):
|
|||||
Interest
expense
|
0.8
|
1.0
|
|||
Other,
net
|
0.1
|
--
|
|||
Total
other expenses,
net
|
0.9
|
1.0
|
|||
Loss
before income
taxes
|
(4.8)
|
(3.0)
|
|||
Income
tax benefit
|
(1.4)
|
(0.7)
|
|||
Net
loss
|
(3.4)
|
%
|
(2.3)
|
%
|
(1)
|
Net
of fuel surcharge revenue from Trucking
operations.
|
(2)
|
Net
of fuel surcharge revenue from Strategic Capacity Solutions
operations.
|
·
|
Salaries,
wages and employee benefits decreased by 2.4 percentage points of base
revenue due in large part to a 61.8% increase in purchased transportation,
a 3.9% increase in Trucking base revenue per mile and to a lesser extent a
decrease of 11.4% in uncompensated miles (empty miles). If we
continue to increase our Strategic Capacity Solutions revenue, we would
expect salaries, wages and employee benefits to continue to decrease as a
percentage of base revenue absent offsetting increases in those
expenses.
|
·
|
Fuel
and fuel taxes increased by 2.1 percentage points of base revenue despite
an improvement in our fuel surcharge recovery per gallon this quarter as
compared to the same quarter of the prior year. Fuel prices
increased 32.7% per gallon and our fuel economy decreased 0.8% due in part
to the harsh winter weather experienced in the first quarter of
2010. During periods of rising fuel prices, a lag occurs
between the timing of the fuel cost increases and the delayed recovery of
fuel surcharge revenue. This was partially offset by the
above-mentioned increase in purchased transportation. Fuel
costs may continue to be affected in the future by price fluctuations, the
terms and collectability of fuel surcharge revenue, the percentage of
total miles driven by owner operators, the diversification of our business
model into less asset-intensive operations and fuel
efficiency.
|
·
|
Purchased
transportation, which is comprised of owner-operator compensation and fees
paid to external transportation providers such as railroads, drayage
carriers, broker carriers and Mexican carriers, increased by 4.9
percentage points of base revenue due primarily to a 127.3% increase in
carrier expense associated with our Strategic Capacity Solutions’ revenue
growth. We expect this expense would continue to increase when
compared to prior periods if we can achieve our long-term goals to
increase the revenue of our Strategic Capacity Solutions operating segment
to grow our owner-operator fleet.
|
·
|
Depreciation
and amortization decreased 1.1 percentage points of base revenue due to
the above-mentioned increase in Trucking base revenue per mile, a 1.5%
increase in miles per tractor per week and an increase in the percentage
of our fleet comprised of owner-operators. Prices for new
tractors have risen in recent years due to Environmental Protection Agency
mandates on engine emissions, and they are expected to increase with the
introduction of the 2010 emission standards. Depreciation and
amortization expense may be affected in the future as original equipment
manufacturers increase prices.
|
·
|
Operations
and maintenance expense decreased 0.4 percentage points of base revenue
primarily due to a 15.8% decrease in direct repair costs and the
above-mentioned increase in Trucking base revenue per mile and purchased
transportation. This decrease was partially offset by a 40.9%
increase in tolls and weight tickets. For the three months
ended March 31, 2010, the change in estimate effected by a change in
principle relating to our method of accounting for tires, which became
effective April 1, 2009, resulted in a reduction of operations and
maintenance expense on a pre-tax basis of approximately $1.5 million and
on a net of tax basis of approximately $0.9 million ($0.09 per
share).
|
·
|
Insurance
and claims expense remained consistent as a percentage of base revenue as
compared to the first quarter of 2009. However, we experienced
a substantial sequential increase in insurance and claims expense from the
fourth quarter of 2009 primarily due to severe winter weather causing an
increase in the frequency of accidents beyond the typical seasonal
increase. If we are able to continue to successfully execute
our “War on Accidents” safety initiative we would expect insurance and
claims expense to gradually decrease over the long term, though remaining
volatile from period-to-period.
|
·
|
Operating
taxes and licenses expense decreased 0.4 percentage points of base revenue
primarily due to a 2.5% decrease in Company-owned
tractors.
|
·
|
Other
expense decreased 0.7 percentage points of base revenue due to cost
controls implemented in several areas of the Company and a reduction in
software conversion costs.
|
·
|
Our
effective tax rate increased from 24.7% in 2009 to 30.6% in
2010. Income tax expense varies from the amount computed by
applying the federal tax rate to income before income taxes primarily due
to state income taxes, net of federal income tax effect, adjusted for
permanent differences, the most significant of which is the effect of the
per diem pay structure for drivers. Due to the partially
nondeductible effect of per diem payments, our tax rate will vary in
future periods based on fluctuations in earnings and in the number of
drivers who elect to receive this pay
structure.
|
Three
Months Ended March 31,
|
|||||||
2010
|
2009
|
||||||
Total
miles (in
thousands) (1)
|
61,481
|
61,617
|
|||||
Empty
mile factor (2)
|
10.2
|
%
|
11.5
|
%
|
|||
Weighted
average number of tractors (3)
|
2,344
|
2,386
|
|||||
Average
miles per tractor per period
|
26,229
|
25,824
|
|||||
Average
miles per tractor per week
|
2,040
|
2,009
|
|||||
Average
miles per trip (4)
|
566
|
651
|
|||||
Base
Trucking revenue per tractor per week
|
$
|
2,753
|
$
|
2,608
|
|||
Number
of tractors at end of period (3)
|
2,349
|
2,376
|
|||||
Operating
ratio (5)
|
103.9
|
%
|
102.0
|
%
|
|
(1)
|
Total
miles include both loaded and empty
miles.
|
|
(2)
|
The
empty mile factor is the number of miles traveled for which we are not
typically compensated by any customer as a percent of total miles
traveled.
|
|
(3)
|
Tractors
include Company-operated tractors in-service plus owner-operator
tractors.
|
|
(4)
|
Average
miles per trip is based upon loaded miles divided by the number of
Trucking shipments.
|
|
(5)
|
Operating
ratio is based upon total operating expenses, net of fuel surcharge
revenue, as a percentage of base
revenue.
|
|
Base
Revenue
|
Cash
Flows
|
|
||||
|
(in
thousands)
|
||||
|
Three
Months Ended March 31,
|
||||
|
2010
|
|
2009
|
||
Net
cash provided by operating activities
|
$
|
4,588
|
|
$
|
4,416
|
Net
cash used in investing activities
|
|
(17,923)
|
|
|
(9,640)
|
Net
cash provided by financing activities
|
|
13,366
|
|
|
5,581
|
·
|
A
$9.6 million reduction of cash used in trade accounts payable and accrued
expenses due to timing of carrier expense, annual registrations, and
equipment purchases;
|
·
|
A
$2.2 million increase in insurance and claims accruals due to timing of
hospital and insurance claims;
|
·
|
An
increase in net loss of $1.1
million;
|
·
|
A
decrease in cash provided from accounts receivable of $7.4 million
resulting from improved revenue for
March;
|
·
|
An
increase of $1.5 million in cash used for prepaids due primarily to our
change in accounting for tires, and an increase in income taxes of $1.6
million.
|
(in
thousands)
|
||||||||||||||
Payments
Due By Period
|
||||||||||||||
Total
|
Less
than 1 year
|
1-3
years
|
3-5
years
|
More
than 5 years
|
||||||||||
Contractual
Obligations:
|
||||||||||||||
Long-term
debt obligations (1)
|
$
|
64,500
|
$
|
--
|
$
|
--
|
$
|
64,500
|
$
|
--
|
||||
Capital
lease obligations (2)
|
55,862
|
17,901
|
35,572
|
2,389
|
--
|
|||||||||
Purchase
obligations (3)
|
12,441
|
12,441
|
--
|
--
|
--
|
|||||||||
Rental
obligations
|
3,185
|
972
|
1,150
|
743
|
320
|
|||||||||
Total
|
$
|
135,988
|
$
|
31,314
|
$
|
36,722
|
$
|
67,632
|
$
|
320
|
||||
(1)
|
Long-term
debt obligations, excluding letters of credit in the amount of $1.8
million, consist of our recently consummated credit agreement, which
matures on April 19, 2014. The primary purpose of this agreement is to
provide working capital for the Company; however, the agreement is also
used, as appropriate, to minimize interest expense on other Company
purchases that could be obtained through other more expensive capital
purchase financing sources. Because the borrowing amounts
fluctuate and the interest rates vary, they are subject to various factors
that will cause actual interest payments to fluctuate over
time. Based on these factors, we have not included in this line
item an estimate of future interest
payments.
|
(2)
|
Includes
interest payments not included in the balance
sheet.
|
(3)
|
The
purchase obligations amount represents commitments to purchase
approximately $12.1 million of revenue equipment, none of which is
cancelable by us upon advance written
notice.
|
·
|
Revenue recognition and
related direct expenses based on relative transit time in each
period. Revenue generated by Trucking is recognized in
full upon completion of delivery of freight to the receiver’s
location. For freight in transit at the end of a reporting
period, we recognize revenue pro rata based on relative transit time
completed as a portion of the estimated total transit
time. Expenses are recognized as
incurred.
|
·
|
Selections of estimated useful
lives and salvage values for purposes of depreciating tractors and
trailers. We operate a significant number of tractors
and trailers in connection with our business. We may purchase
this equipment or acquire it under leases. We depreciate
purchased equipment on the straight-line method over the estimated useful
life down to an estimated salvage or trade-in value. We
initially record equipment acquired under capital leases at the net
present value of the minimum lease payments and amortize it on the
straight-line method over the lease term. Depreciable lives of
tractors and trailers range from three years to ten years. We
estimate the salvage value at the expected date of trade-in or sale based
on the expected market values of equipment at the time of
disposal.
|
·
|
Estimates of accrued
liabilities for claims involving bodily injury, physical damage losses,
employee health benefits and workers’ compensation. We
record both current and long-term claims accruals at the estimated
ultimate payment amounts based on information such as individual case
estimates, historical claims experience and an estimate of claims incurred
but not reported. The current portion of the accrual reflects
the amounts of claims expected to be paid in the next twelve
months. In making the estimates, we rely on past experience
with similar claims, negative or positive developments in the case and
similar factors. We do not discount our claims
liabilities.
|
·
|
Stock option
valuation. The assumptions used to value stock options
are dividend yield, expected volatility, risk-free interest rate, expected
life and anticipated forfeitures. As we have not paid any
dividends on our Common Stock, the dividend yield is
zero. Expected volatility represents the measure used to
project the expected fluctuation in our share price. We use the
historical method to calculate volatility with the historical period being
equal to the expected life of each option. This calculation is
then used to determine the potential for our share price to increase over
the expected life of the option. The risk-free interest rate is
based on an implied yield on United States zero-coupon treasury bonds with
a remaining term equal to the expected life of the outstanding
options. Expected life represents the length of time we
anticipate the options to be outstanding before being
exercised. Based on historical experience, that time period is
best represented by the option’s contractual life. Anticipated
forfeitures represent the number of shares under options we expect to be
forfeited over the expected life of the
options.
|
·
|
Accounting for income
taxes. Our deferred tax
assets and liabilities represent items that will result in taxable income
or a tax deduction in future years for which we have already recorded the
related tax expense or benefit in our consolidated statements of
operations. Deferred tax accounts arise as a result of timing
differences between when items are recognized in our consolidated
financial statements compared to when they are recognized in our tax
returns. Significant management judgment is required in
determining our provision for income taxes and in determining whether
deferred tax assets will be realized in full or in
part. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled. We periodically assess the likelihood that all or some
portion of deferred tax assets will be recovered from future taxable
income. To the extent we believe recovery is not probable, a
valuation allowance is established for the amount determined not to be
realizable. We have not recorded a valuation allowance at March
31, 2010, as all deferred tax assets are more likely than not to be
realized.
|
·
|
Prepaid
tires. Effective April 1, 2009, we changed our method of
accounting for tires. Commencing when the tires, including
recaps, are placed into service, we account for them as prepaid expenses
and amortize their cost over varying time periods, ranging from 18 to 30
months depending on the type of tire. Prior to April 1, 2009,
the cost of tires was fully expensed when they were placed into
service. We believe the new accounting method more
appropriately matches the tire costs to the period during which the tire
is being used to generate revenue. For the three months ended
March 31, 2010, this change in estimate effected by a change in principle
resulted in a reduction of operations and maintenance expense on a pre-tax
basis of approximately $1.5 million and on a net of tax basis of
approximately $0.9 million ($0.09 per
share).
|
ITEM
3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
|
ITEM
1.
|
LEGAL
PROCEEDINGS
|
ITEM
1A.
|
RISK
FACTORS
|
ITEM
2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
|
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plans or
Programs
|
|||||
January
1 – January 24
|
--
|
$
|
--
|
--
|
3,165,901
|
||||
January
25 – January 31
|
--
|
--
|
--
|
2,000,000
|
|||||
February
1 – February 28
|
--
|
--
|
--
|
2,000,000
|
|||||
March
1 – March 31
|
--
|
--
|
--
|
2,000,000
|
|||||
Total
|
--
|
$
|
--
|
--
|
2,000,000
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
|
None.
|
ITEM
4.
|
(REMOVED
AND RESERVED)
|
|
None.
|
(a)
|
Exhibits
|
3.01
|
Restated
and Amended Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company’s Registration Statement on Form
S-1, Registration No. 33-45682, filed with the Securities and Exchange
Commission on February 13, 1992 [the “Form S-1”]).
|
3.02
|
Amended
Bylaws of the Company as currently in effect (incorporated by reference to
Exhibit 3.2 to the Company’s annual report on Form 10-K for the year ended
December 31, 2001).
|
3.03
|
Certificate
of Amendment to Certificate of Incorporation of the Company filed March
17, 1992 (incorporated by reference to Exhibit 3.3 to Amendment No. 1 to
the Form S-1 filed with the Securities and Exchange Commission on
March 19, 1992).
|
3.04
|
Certificate
of Amendment to Certificate of Incorporation of the Company filed April
29, 1993 (incorporated by reference to Exhibit 5 to the Company’s
Registration Statement on Form 8-A/A filed with the Securities and
Exchange Commission on June 2, 1997 [the “Form 8-A/A”]).
|
3.05
|
Certificate
of Amendment to Certificate of Incorporation of the Company filed May 13,
1994 (incorporated by reference to Exhibit 6 to the Form
8-A/A).
|
4.01
|
Specimen
certificate evidencing shares of the Common Stock, $.01 par value, of the
Company (incorporated by reference to Exhibit 4.1 to the Form
S-1).
|
4.02
|
Instruments
with respect to long-term debt not exceeding 10.0% of the total assets of
the Company have not been filed. The Company agrees to furnish
a copy of such instruments to the Securities and Exchange Commission upon
request.
|
4.03
|
Amended
and Restated Senior Credit Facility dated September 1, 2005, between the
Company and Bank of America, N.A., U.S. Bank, N.A., SunTrust Bank,
BancorpSouth and Regions Bank collectively as the Lenders (incorporated by
reference to Exhibit 10.1 to the Company’s Form 8-K dated September 8,
2005).
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
|
SIGNATURES
|
USA
Truck, Inc.
|
||||
(Registrant)
|
||||
Date:
|
April
30, 2010
|
By:
|
/s/
Clifton R.
Beckham
|
|
Clifton
R. Beckham
|
||||
President
and Chief Executive Officer
|
||||
Date:
|
April
30, 2010
|
By:
|
/s/
Darron R.
Ming
|
|
Darron
R. Ming
|
||||
Vice
President, Finance and Chief
|
||||
Financial
Officer
|
Exhibit
Number
|
Exhibit
|
||
3.01
|
Restated
and Amended Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company’s Registration Statement on Form
S-1, Registration No. 33-45682, filed with the Securities and Exchange
Commission on February 13, 1992 [the “Form S-1”]).
|
||
3.02
|
Amended
Bylaws of the Company as currently in effect (incorporated by reference to
Exhibit 3.2 to the Company’s annual report on Form 10-K for the year ended
December 31, 2001).
|
||
3.03
|
Certificate
of Amendment to Certificate of Incorporation of the Company filed March
17, 1992 (incorporated by reference to Exhibit 3.3 to Amendment No. 1 to
the Form S-1 filed with the Securities and Exchange Commission on
March 19, 1992).
|
||
3.04
|
Certificate
of Amendment to Certificate of Incorporation of the Company filed April
29, 1993 (incorporated by reference to Exhibit 5 to the Company’s
Registration Statement on Form 8-A/A filed with the Securities and
Exchange Commission on June 2, 1997 [the “Form 8-A/A”]).
|
||
3.05
|
Certificate
of Amendment to Certificate of Incorporation of the Company filed May 13,
1994 (incorporated by reference to Exhibit 6 to the Form
8-A/A).
|
||
4.01
|
Specimen
certificate evidencing shares of the Common Stock, $.01 par value, of the
Company (incorporated by reference to Exhibit 4.1 to the Form
S-1).
|
||
4.02
|
Instruments
with respect to long-term debt not exceeding 10.0% of the total assets of
the Company have not been filed. The Company agrees to furnish
a copy of such instruments to the Securities and Exchange Commission upon
request.
|
||
4.03
|
Amended
and Restated Senior Credit Facility dated September 1, 2005, between the
Company and Bank of America, N.A., U.S. Bank, N.A., SunTrust Bank,
BancorpSouth and Regions Bank collectively as the Lenders (incorporated by
reference to Exhibit 10.1 to the Company’s Form 8-K dated September 8,
2005).
|
||
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
||
31.2
|
Certification of Chief Financial Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of
2002.
|
||
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
||
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|