USA Truck, Van Buren, Ark., announced record operating revenues, before fuel surcharge, of $70,651,305 for the quarter ended Sept. 30, 2002, an increase of 12.4% from $62,869,859 for the same quarter of 2001.
Net income increased 115.7% to $1,271,086 for the third quarter of 2002, compared to $589,287 for the same quarter of 2001. Fully diluted net income per share for the quarter ended Sept. 30, 2002 was $.14 compared to $.06 for the same quarter of 2001, an increase of 133.3%.
In comparing the financial results of the quarter ended Sept. 30, 2002 to the same quarter last year, Robert M. Powell, chairman and CEO of the company said, "We experienced strong freight demand in the third quarter despite mixed economic indicators. The combination of that stronger demand and a noticeable decline in industry capacity allowed us to increase our rates slightly and reduce our empty mile factor below 9% for the first time since the fourth quarter of 1999. We will continue with our efforts to increase those rates and to improve equipment utilization, which was off 2.5% this quarter compared to last year. Our USA Logistics division also continued its pattern of strong revenue growth, expanding 34% mostly through third party logistics services."
Powell also said, "The improving economic environment and our internal cost-cutting efforts created more operating margin during the third quarter. In fact, we posted our lowest operating ratio (95.2%) since the second quarter of 2000 and continued our encouraging trend of slow but steady margin improvements. Those improvements are partially the result of targeted cost-reducing programs and a more favorable mix of freight that has yielded greater revenue per mile and lower operating costs."
However, according to Powell, the September fuel spike was detrimental to earnings as was the continued tight insurance market, which forced premiums up considerably late last year. "We were able to renew our insurance coverage at the end of the third quarter and, though the premiums remained high, we were successful at reducing our self-insurance retention and deductibles, thus reducing our risk exposure. We are also watching the tractor markets closely. Our decision to extend the lives of our tractor fleet during 2002 instead of trading during the used tractor market depression has been successful thus far. While the used tractor market slowly recovers, we are beginning to see some increased maintenance costs associated with that older equipment. We intend to begin trading the oldest tractors in for new ones as soon as the used market prices meet management expectations and the new EPA-compliant engines are proven in the field."
Powell emphasized that while management continues to work diligently to take costs out of the process at every opportunity, "We are focused on four primary cost areas: revenue mix (rates, utilization, empty miles), driver pay, insurance/safety and maintenance. We have made progress in all of these areas and will continue to focus on them until we are satisfied that we have squeezed every possible penny from them."
USA Truck is a medium haul, common and contract carrier specializing in truckload quantities of general commodities. The company operates in the 48 contiguous United States and the Canadian provinces of Ontario and Quebec and in Mexico through the gateway city of Laredo, Texas.