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USA Truck Widens Loss From Third Quarter

January 28, 2010

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Dry van truckload carrier USA Truck incurred a net loss of $2.5 million, or 24 cents per share, during the fourth quarter, a wider loss than the third quarter of 2009.
Despite several cost-savings efforts, USA Truck swung to a loss during the fourth quarter.
Despite several cost-savings efforts, USA Truck swung to a loss during the fourth quarter.
This compares to a net income of $0.6 million, or 6 cents a share, during the same quarter of 2008.

Base revenue for the quarter was $85.1 million, down 8.3 percent from $92.9 million for the year-ago quarter.

"Progress made this quarter on our VEVA (Vision for Economic Value Added) strategic plan was overshadowed by difficult year-over-year fuel cost comparisons," said Clifton R. Beckham, president and CEO of the company. "However, despite rising fuel costs and the ongoing depression in freight volumes that began in 2006, our operational performance trended positively."

USA Truck's VEVA initiative included several cost-saving measures, such as reducing fixed costs, lowering insurance and claims expense, yield management, cutting staff and boosting revenue in the intermodal and brokerage sectors. The company also continued to transition technology platforms as part of its Project Tech initiative.

In addition, the company managed to start transitioning its trucking operations to shorter length-of-haul lanes, where freight is more abundant. This resulted in a year-over-year decrease in length-of-haul by 14.2 percent to 594 miles.

"We have completed the bulk of the structural changes we believe will be necessary to reposition our business model to more effectively compete in today's truckload industry," said Beckham. "We are now concentrating on execution.

"We believe industry conditions have bottomed," he continued. "However, tractor capacity remains abundant and pricing pressure remains severe. We anticipate our first quarter results will be similar to our recent quarters and there will likely be sequential downward pressure on industry pricing as lower priced third and fourth quarter bids take
effect."

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