The trucking company USA Truck reported on Friday that its financial picture turned slightly negative in the third quarter of the year as it continues to move to a more asset-light business.
Its net loss was $700,000 million, or 9 cents per share, compared to net income of $2.7 million, or earnings of 26 per share, a year earlier.
Revenue in the most recent quarter totaled $105.5 million compared to $123.5 million for the prior-year period. Revenue, which excludes fuel surcharges, was $94.7 million compared to $109.8 million for the 2015 period.
“We marked significant progress toward our goals of expanding the scope of USAT Logistics, improving service levels in our truckload business and reducing operating costs in the third quarter,” said President and CEO Randy Rogers. “Those gains were, and for the near term will likely be, offset by a weak freight environment and unfavorable comparisons versus prior periods due to the loss of certain dedicated account customers earlier this year.”
He said that while he’s encouraged by the company’s progress, USA recognizes the results have fallen short of goals and hopes to achieve substantial improvements in profitability as the Arkansas-based company moves into the 2017 bid season.
“One of our principal goals is for our higher margin, asset-light brokerage operations to contribute 50% of the company’s consolidated revenue,” Rogers said. “In support of this objective, during the quarter we expanded its sales channels to include agents in secondary markets and since have consolidated operations from smaller, inefficient offices into our larger regional centers while maintaining existing client manager relationships.”
USA Truck said it achieved a modest improvement in loaded rate per mile to $1.725 despite the difficult rate environment. The company also said it posted a 4.3% decrease in operating expenses from the previous quarter to the lowest in more than four years.
“In light of market conditions, we reduced company-owned tractors by 6.3% through the elimination of our 2012 and 30% of our 2013 tractors, which were high cost, challenging for our drivers and placed significant burdens on our maintenance operations,” Rogers said.
Looking ahead, Rogers said as USA Truck moves into the 2017 bid season, he expects improved service performance and a more focused network to drive meaningful rate improvement.
“We have identified pricing and utilization opportunities throughout our network and expect our enhanced support programs and more efficient and aligned compensation structures to increase the number of independent contractors and help offset the phase-out of our older tractor fleet,” he said. “We are confident that our planned transition to an increasingly asset-light model is the right one for our organization and we expect to achieve positive earnings per share for the full year 2017.”