WEB NEWS Research
Usa Truck, Inc. (NASDAQ:USAK)($18.75; $166.7M market cap) operates as a truckload carrier in the United States, Mexico, and Canada. On September 27, 2021 we added USAK to our select long disclosure list based on a podcast pitch by Egor Romanyuk, @Maverick_UAE, to GeoInvesting's Premium members and our bullish interview with management.
The company announced Q3 2021 results:
Sales of $180.9 million vs $141.7 million in the prior year and ahead of analyst estimates of $176.6 million.
EPS of $0.57 vs $0.29 in the prior year and above analyst estimates of $0.50
“We continue to transform the culture of our Company and in doing so we have delivered five straight quarters of record quarterly adjusted earnings per share. Our team set a second consecutive quarterly operating revenue record at $181.0 million and posted a 140 basis point improvement in adjusted operating ratio(a) year over year.”
We were on the company’s conference call. It was a very bullish call with management maintaining its goals of $1 billion in revenue and EPS of $4.20 to $4.50 for 2024. They commented that it is ahead of schedule on these goals. Comments for Q4 were also very bullish.
Comments & Business Outlook
Fourth Quarter 2014 Results
Total base revenue increased 10.7% to $125.8 million for the quarter ended December 31, 2014, from $113.6 million for the same quarter of 2013.
Consolidated net income was $4.2 million, or $0.40 per diluted share, for the fourth quarter of 2014 compared to a net loss of ($4.6) million, or ($0.44) per diluted share, for the same quarter of 2013.
“Our robust fourth quarter capped a transformative year for USA Truck,” said President and CEO John Simone. “As a result of our company-wide focus on operational execution, profitable growth and cost effectiveness, we delivered our ninth consecutive quarter of improved results, our third consecutive quarter of positive operating income, and the Company’s highest quarterly earnings per share in more than nine years. For the full year, we achieved the goals we had set, delivering profitable consolidated operating income and positive earnings per share. In fact, on an adjusted basis, 2014 diluted earnings per share totaled $0.74 compared to a loss of $0.44 per share in 2013. This is our first full year of positive EPS since 2008.
“Both our Trucking and asset-light Strategic Capacity Solutions businesses performed well in the fourth quarter. While their strong performance was aided by the robust demand environment and favorable fuel prices, significant improvement in revenue per tractor in our Trucking business, including operational improvements such as improved fuel efficiency and lower maintenance costs, made important contributions. Our consolidated operating ratio improved by 1,090 basis points to 93.2%.”
Mr. Simone continued, “In our Trucking business, we generated year over year base revenue growth of 4.2% but, more importantly, our base trucking revenue per seated tractor per week of $3,233 exceeded $3,000 for the fourth consecutive quarter and grew 9.1% over last year, driven by a 13.5% increase in our base revenue per loaded mile. We improved our Trucking operating ratio to 95.1%, a 1,400 basis-point improvement over the fourth quarter of 2013. Our fleet fuel efficiency initiatives, which included investments in new equipment and enhancements to our existing fleet, produced a 10.4% improvement in miles-per-gallon, or $2.9 million.
“We continue to seek opportunities to increase volume through improved productivity of our existing assets by streamlining our internal processes to more effectively utilize our drivers’ available hours and to actively manage our network. In the near term, our plan is to continue our strong focus on cost efficiencies, particularly with respect to maintenance, and insurance and claims costs, and to increase the asset productivity of our owned tractors through continued improvements in our network, which may include a reduction in our average number of owned tractors in favor of growing our owner-operator and dedicated fleet. We believe these efforts as well as the ongoing execution of other strategic and operational initiatives will drive further improvement in our Trucking business.
“In our SCS business, base revenue rose 28.5% year over year to $39.0 million on higher load volumes and operating income jumped by almost 50%. SCS’ operating ratio improved 160 basis points to 88.8%. Recognizing the contributions SCS will continue to make to our business, we recently expanded our offering, opening an office in Jacksonville, Fla. and relocating our Chicago site to larger quarters.”
Mr. Simone concluded, “We are pleased to have ended 2014 on such a strong note and believe our results for the year demonstrate that we continue to make strong progress on the execution of our turnaround plan. We will continue to focus on further improving the utilization of our resources, streamlining our processes and more fully achieving the potential of our business model, where we have substantial leverage still to realize.
“In 2015, we believe USA Truck is well positioned to deliver another year of growth and continued operating improvements. We are sharpening our focus on enhancing the Company’s ability to provide capacity solutions by growing our dedicated business, growing our SCS footprint and our owner-operator fleet. In addition, we will continue to refine our Truckload network.
“The steady progress we are making would not be possible without the many contributions and dedication of USA Truck’s team members, whose efforts we greatly appreciate. All of us will be working together to make 2015 ‘Even Better.’ ”
Comments & Business Outlook
Third Quarter 2014 Results
Reported Q3 2014 revenues of $153.6 million vs $141.8 million in the prior year.
Consolidated net income was $2.7 million, or $0.26 per diluted share, for the third quarter of 2014 compared to a net loss of ($0.6) million, or ($0.06) per share, for the same quarter of 2013.
"Both our Trucking and asset-light Strategic Capacity Solutions (SCS) businesses realized revenue gains and positive operating income, a direct outcome of our intense focus on operational effectiveness, while also benefiting from today's strong demand environment. We continued to lower our consolidated operating ratio, this quarter by 450 basis points. Our strong operating cash flow of $19.6 million positioned us to pay down almost $11 million in debt. For the year to date, we have reduced debt by a total of $14.5 million; over the past 12 months, we have reduced debt by $26.5 million.
"Our third-quarter results were driven by a 10.6% increase in base revenue while operating expenses rose only 5.7% (net of fuel surcharge recoveries). In our Trucking business, our operating improvement initiatives enabled us to sustain the asset utilization gains we have realized since beginning our turnaround and achieve a 370 basis-point improvement in Trucking's operating ratio. We reached a key milestone in our turnaround plan by bringing Trucking's operating ratio under 100, and we intend to continue that trend."
Mr. Simone continued, "Trucking rate per loaded mile increased 9.4%, a sequential improvement from 2Q14's 7.1% increase as a result of our ongoing and comprehensive yield and network management initiatives. Our fleet fuel efficiency initiatives produced a 10.5% improvement in miles-per-gallon, or $3.2 million, while offsetting higher driver-related costs. Our focus on unseated truck count continues to be a top priority and we believe our driver recruitment and retention efforts are making incremental inroads in this important area. We believe these efforts, as well as our strategic and operational initiatives, will continue to drive improvement in our truckload business.
"Our SCS business was the strongest contributor to 3Q's positive results even as our truckload business continued to experience improvement and turned profitable this quarter. SCS' base revenue rose 24.2% to $39.9 million, accounting for about one-third of our consolidated base revenue. Operating expenses net of fuel surcharge increased only 17.7%, reflecting ongoing productivity gains that helped improve SCS' operating ratio by 480 basis points. We believe the overall freight market's tight capacity underscores the importance of this strategic aspect of our Company's integrated business model."
USA Truck Chairman Robert A. Peiser added, "We are pleased that the fundamentals of the business have remained robust in the fourth quarter and the USAK team is continuing to execute well on the Company's operations strategy. Our goal is to end the year on a strong note, deliver positive consolidated operating income and positive EPS for 2014, and position USA Truck for continuing operating improvements next year. Towards this end, the Board of Directors, following an extensive operational review to identify both immediate and long-term steps to enhance performance, has recently endorsed a strategy of continuing to increase the emphasis on growing SCS, our dedicated business and our owner-operator fleet. We also believe that improved financial performance will be achieved through continued refinement of the Company's truckload network in addition to the many other initiatives that are being pursued."
Mr. Peiser concluded, "John and I particularly want to acknowledge the hard work and focus of all the USA Truck team members, who have been key to improving our Company's performance. We appreciate all their contributions and look forward to continued progress."
Comments & Business Outlook
Second Quarer 2014 Results
Total base revenue increased 12.1% to $125.0 million for the quarter ended June 30, 2014, from $111.5 million for the same quarter of 2013.
Adjusted EPS of $0.20 compared to loss of ($0.14) in 2Q13
"The Company's improved second-quarter performance was driven by a 12.1% increase in base revenue, while operating expenses net of fuel surcharge collections increased only 7.4%, yielding a 410-basis point improvement in operating margin – a testament to the multiple revenue growth, operational and cost-efficiency initiatives we have implemented.
"Our asset-light Strategic Capacity Solutions (SCS) business was an especially important contributor, turning in a second consecutive record quarter. Base revenue increased 39.1% to $41.8 million and operating margin expanded by 700 basis points. This performance was made possible by crisp execution within this highly efficient service against the backdrop of a market characterized by strengthening demand and tight capacity. Our SCS segment accounted for over one-third of our consolidated base revenue during the quarter, substantially strengthening and diversifying our integrated business model."
Mr. Simone continued, "Trucking continued to improve its performance, with base revenue growth of 2.2% and a 170-basis-point improvement in operating ratio. In the quarter, we increased revenue per total mile by 5.7% and grew miles per seated tractor per week by 1.3% to their highest level in more than three years. Although fixed costs were pressured during the quarter by elevated employee medical benefit plan costs, we achieved improvements in critical areas such as insurance and claims, fuel and maintenance costs. We also took steps we believe will increase our seated truck count, which remains one of management's top priorities as the availability of qualified drivers continues to be problematic across the truckload industry.
"We are encouraged by the accomplishments made possible by the disciplined execution of our strategic plan. Although the shortage of drivers and more restrictive hours-of-service rules continue to present challenges for our industry, the demand and pricing environment in the truckload marketplace is healthy and we believe our 2014 goals of positive consolidated operating income and adjusted EPS are achievable.
"I particularly want to acknowledge the hard work and commitment of all the USA Truck team members, who have been instrumental in improving our performance. We appreciate their many contributions and look forward to continued progress in the second half of the year."
Maximization of Shareholder Value
VAN BUREN, Ark. , May 23, 2014 /PRNewswire / -- USA Truck, Inc. (NASDAQ: USAK ), a leading North American transportation and logistics provider, today announced that it has reached an agreement (the "Cooperation Agreement") with United Shareholders for the Benefit of USAK, as well as its constituent stakeholders, Baker Street Capital Management, LLC and Stone House Capital Management, LLC (collectively, "United Shareholders"). United Shareholders are collectively the largest shareholder of USA Truck with an approximate equity stake of 28% of the Company's shares.
Under the terms of the Cooperation Agreement, the Company has agreed to appoint Vadim Perelman , Managing Partner and Chief Investment Officer of Baker Street Capital, and Thomas Glaser to the Company's Board of Directors. With the addition of Messrs. Perelman and Glaser, the USA Truck Board expands to nine members.
The United Shareholders have agreed to vote all of their shares for the election of William H. Hanna and James D. Simpson, III as directors and in favor of the other proposals submitted for stockholder approval at the 2014 Annual Meeting. The United Shareholders have also agreed to certain customary standstill provisions through the date that is 10 days prior to the deadline for submission of stockholder nominations for the 2015 Annual Meeting.
USA Truck Chairman Robert A. Peiser commented, "As always, the USA Truck Board is dedicated to creating value for our shareholders and we appreciate the constructive input that Baker Street Capital and Stone House Capital have provided towards our mutual goal over the past several months. We welcome both Vadim Perelman and Tom Glaser to the Board. We expect Vadim to be a constructive member of our Board who will add valuable financial and strategic expertise that will help us accelerate the execution of our turnaround plan. Tom has been a senior transportation executive for almost three decades and served as a consultant to USA Truck in 2012 and as interim Chief Operating Officer in 2013. His deep knowledge of the trucking industry and USA Truck, combined with his sound judgment and professionalism, will also further the Company's turnaround plan."
Vadim Perelman and Thomas Glaser jointly remarked, "We are pleased to join USA Truck's Board of Directors. We look forward to working with management and the Board to improve operational and financial performance. Having met with the Company's management team and Board, we believe the greatest opportunity for maximizing shareholder value over the long term is the successful execution of the Company's standalone plan to restore USA Truck to a best-in-class, profitable truckload and logistics company."
Comments & Business Outlook
First Quarter 2014 Results
Revenues for Q1 2014 were $145.5 million vs $132.0 million in the prior year period and in-line with analyst Q1 2014 revenue estimates.
Non-Gaap loss per share for Q1 2014 was $0.13 vs a loss of $0.23 in the prior year and ahead of analyst Q1 2014 estimates of a loss of $0.20.
"Despite the most severe winter weather we have experienced in decades across our operating geography, we posted another quarter of strong year-over-year progress towards our operational improvement goals," said President and CEO John Simone. "Our business model proved resilient with our asset-light Strategic Capacity Solutions (SCS) business delivering record performance even as the harsh weather impeded our Trucking operations.
"Highlights of the quarter included an increase in consolidated base revenue of more than 12.0%, a 170-basis-point improvement in consolidated operating ratio and a 27.1% improvement in adjusted EBITDA to $10.3 million, each compared with the first quarter of 2013. In addition, we reduced debt sequentially for the third consecutive quarter, this time by $4.4 million. Since June 2013, we have reduced debt by a total of $21.5 million.
"The unusual frequency and severity of winter storms disrupted our Trucking operations throughout January, February and the first week of March. The final three weeks of March, however, were characterized by unusually strong freight volumes, which outstripped both our and the industry's supply of trucks, creating widespread dislocations in the marketplace as pent-up shipping demand from the severe winter met a worsening shortage of drivers in the industry.
"These industry pressures led to mixed results in our Trucking segment. We increased our revenue per loaded mile 3.2% and modestly improved our miles per seated tractor per week and fuel economy. We believe these improvements indicate that our turnaround efforts continue to yield positive results. In several areas, however, including maintenance, we experienced higher operating costs due to the weather, and we believe that weather conditions significantly suppressed improvement in miles per seated truck per week. Most of those metrics returned to normal in April, but we believe it will take several months to correct the increase in our unseated truck count, which averaged 8.0% during the quarter compared to 4.1% in the prior-year period.
"Less encumbered than our Trucking segment by weather-related constraints, SCS posted its strongest quarter ever, accounting for 31.8% of our consolidated base revenue and more than quadrupling operating income to $5.1 million on strong volumes and margins compared to the 2013 period. With an integrated product portfolio, focus on delivering customized solutions to our deep and diverse customer base, and industry-leading ability to source capacity effectively, SCS was well positioned to help our customers solve the disruptions the severe weather created. During the first quarter, 96 of our top 100 customers used multiple USA Truck product offerings, further illustrating how SCS complements our asset-based service offering."
Mr. Simone added, " We are continuing to execute our turnaround plan, focusing on the same high-leverage activities that drove significant improvement in our results throughout 2013. We are pleased with our progress in many areas. One obstacle facing the entire industry is the shortage of drivers brought on by more restrictive federal hours-of-service rules, increasing opportunities in other industry verticals such as housing and energy, and long-term demographic trends in which more drivers are leaving our industry each year than are entering it. We have taken steps we believe will improve recruiting and retention over the course of the year and allow us to capitalize fully on the healthy demand and pricing environment in the truckload marketplace. Therefore, assuming our seated truck count recovers and our SCS business continues to perform well, we believe we still have the opportunity to achieve positive consolidated operating income and positive EPS for the full year 2014."
Maximization of Shareholder Value
VAN BUREN, Ark. , April 10, 2014 /PRNewswire / -- USA Truck, Inc. (NASDAQ: USAK ), a leading North American transportation and logistics solutions provider, today announced that its Board of Directors has unanimously voted to terminate the Company's Stockholders' Rights Plan (the "Plan") effective April 11, 2014.
Chairman of the Board Robert A. Peiser commented, "We adopted the Stockholders' Rights Plan in November 2012 as we began implementing a comprehensive turnaround program, designed to bring increased value to USA Truck's stockholders and increased opportunities for our employees. The Plan was designed to give the Company time to execute our turnaround without unnecessary distractions, including unsolicited and inadequate takeover offers.
"Over the past 18 months, under the leadership of President and CEO John Simone , we expanded our senior management team and began capitalizing on USA Truck's blue-chip customer base, dedicated employees and substantial assets. With the turnaround well underway, and with our stock price having appreciated well above the price existing at the time of the Plan's adoption, the Plan has served its intended purpose. The Board's decision to terminate the Plan demonstrates our confidence in the Company's management team, ongoing strategy and employees."
The termination will be effected by amending the Plan, commonly known as a "poison pill," to accelerate its expiration date to the close of business on April 11, 2014. Stockholders are not required to take any action as a result of the termination. USA Truck will be taking routine actions to terminate, deregister and delist the related preferred share purchase rights under applicable law, including the Securities Exchange Act of 1934. USA Truck has not arranged for listing and/or registration of the preferred share purchase rights on another national securities exchange or for quotation of the preferred share purchase rights in a quotation medium. These actions are administrative in nature and will have no effect on USA Truck's common stock, which continues to be listed on NASDAQ.
Comments & Business Outlook
Fourth Quarter 2013 Results
Total base revenue growth of 6.2% to $113.6 million from $107.1 million for the same quarter of 2012.
Adjusted EPS of $0.00, compared to a loss of $0.31 in 4Q12.
"The fourth quarter capped a turning point year for USA Truck, with improvements in virtually every area of our business," said President and CEO John Simone. "Our results reflect the growing positive momentum of our strategic plan, which focuses on three critical areas – operational execution, profitable revenue growth and cost effectiveness.
"In addition to generating base revenue growth of more than 6% from last year's period, these initiatives led to our first quarter of positive operating income since the second quarter of 2011, after adjusting for the non-cash charge described below. In another clear sign of progress, continued improvement in our cash flow from operations enabled us to reduce debt sequentially for the second consecutive quarter, this time by $12 million, while maintaining a consistent fleet age of 2.5 years, well below industry average. Our strengthening operating results represent another solid step towards returning to profitability and further enhancing shareholder value. We are especially encouraged by our sustained sequential quarterly improvements throughout 2013, which ran counter to the historical seasonal patterns in our business."
Mr. Simone continued, "Throughout 2013, our Trucking segment made steady progress, improving its adjusted operating ratio by 503 basis points quarter over quarter and by 644 basis points for the full year. The fourth quarter of 2013 was our fifth consecutive quarter of improvement. For both the quarter and the year, we extended our length of haul while simultaneously increasing our pricing, and we added drivers while simultaneously increasing productivity per driver. These are impressive accomplishments, and demonstrate the fundamental nature of our improving performance.
"Our asset-light Strategic Capacity Solutions (SCS) business also turned in another strong quarter, growing operating income by 74.4% year over year on base revenue growth of 4.1%. SCS, which accounted for $30.4 million, or 26.7%, of our consolidated base revenue, actually reduced its year-over-year operating expenses by 4.0%, leading to a 390 basis-point improvement in operating margin."
Mr. Simone concluded, "We are very pleased with our fourth-quarter performance, especially since we are still in the early stages of implementing our turnaround plan and see many opportunities for continued improvement. In 2014, we expect to continue to execute on our key initiatives and high-leverage activities, including increasing tractor utilization and fuel efficiency, reducing insurance claims expense and controlling maintenance costs. Given the substantial headway we have made over the past year and the momentum we carry into 2014, we believe our goal of returning USA Truck to profitability is achievable for the full year 2014."
Legal Insights
VAN BUREN, Ark. , Feb. 4, 2014 /PRNewswire / -- USA Truck, Inc. (NASDAQ: USAK), a leading truckload transportation and logistics solutions provider, has entered into a settlement agreement with Knight Transportation, Inc.(NYSE: KNX) that dismisses all claims between the two parties arising from the litigation it filed against Knight Transportation on October 10, 2013.
In connection with the settlement, USA Truck and Knight Transportation have entered into a standstill agreement and a voting agreement effective through September 30, 2014. The standstill agreement contains customary terms, including that, through September 30, 2014, Knight Transportation will not acquire any securities or assets of USA Truck, propose any tender or exchange offer to acquire USA Truck securities or any consent solicitation, or seek representation on the Board of Directors of USA Truck. In addition, pursuant to the voting agreement, Knight Transportation has agreed not to vote the USA Truck shares it beneficially owns at the Company's 2014 shareholder meeting.
USA Truck issued the following statement regarding the settlement:
We are pleased that the parties have reached a settlement. USA Truck's management team and employees have been focused on executing plans to restore the Company's profitability and unlock its earnings leverage potential through improved operational excellence, profitable revenue growth and cost effectiveness. Nevertheless, by eliminating any of the distractions that have been created by this litigation, the settlement is a positive outcome for USA Truck's employees, customers and shareholders.
In conjunction with the settlement, USA Truck and Knight Transportation will file a joint stipulation to dismiss the lawsuit in its entirety with prejudice.
Research
We believe trucking company USA Truck (USAK) is a prime candidate for an eventual acquisition. Valuing USAK at 1.5x Book Value per Share would value the stock at around $15.00. However, as we will explain, we believe meaningful upside exists to this price target. The market seems to already be casting its vote in agreement since the stock is already trading above $15.00.
Please see the reasons why we feel that USAK is slated to go even higher.
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13D and 13G Activity
13D Filed on November 7, 2013
Baker Street Capital disclosed a 13.3% stake
Purpose of transaction:
Item 4.The Reporting Persons purchased the Shares based on the Reporting Persons’ belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of Shares at prices that would make the purchase of additional Shares desirable, the Reporting Persons may endeavor to increase their position in the Issuer through, among other things, the purchase of Shares on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable.
Comments & Business Outlook
Third Quarter 2013 Results
Total base revenues increased 13.5% to $113.9 million for the quarter ended September 30, 2013 from $100.3 million for the same quarter of 2012.
Diluted net loss per share improved 90.1% from ($0.59) in the third quarter of 2012 to ($0.06) in the third quarter of 2013. "We are pleased with our sequential and year-over-year progress and expect to build even further on the strong business momentum we have established. The sustainability of this momentum is demonstrated by the increasing rate of improvement in our bottom-line results – up 49% in the first quarter of 2013, 60% in the second quarter, and 90% in the third quarter. With meaningful opportunities for improvement in several areas of our business, including insurance and claims, maintenance costs and tractor utilization, we expect to continue to show significantly improved quarter-over-quarter results in the fourth quarter irrespective of industry conditions and seasonality."
