Truckload carrier USA Truck (NASDAQ: USAK), whose stock over the past 12 months has soared more than 200%, turned in a solid performance for the first quarter.
Net income at the company on a GAAP basis was a 70-cents-per-share reversal, climbing to 40 cents per share compared to a first-quarter 2020 loss of 30 cents per share. The improvement in performance on an adjusted basis was about the same, an increase of 69 cents per share to earnings of 43 cents from a loss of 26 cents.
In the statement released with the earnings, CEO and President James Reed said the numbers marked the best first quarter in USA history.
Like many truckload carriers that have reported earnings for the first quarter, the improved bottom line at USA Truck rose at a rate faster than that of revenue. That sort of trend is why USA Truck’s operating ratio improved to 95.8% on an adjusted basis, up from a money-losing OR in the first quarter of last year of 101.5%.
Operating revenue in the trucking segment was up to $103.1 million from $94 million last year. The actual dollar figure on the increase in GAAP operating income was positive $3.52 million in 2021’s first quarter compared to an operating loss of $1.69 million last year. The adjusted shift was $3.87 million compared to an adjusted loss of $1.26 million last year.
USA Truck actually drove fewer miles in the quarter, declining to 42.14 million miles from 45.71 million. Loaded miles per available tractor per week was also down slightly, to 1,532 from 1,546. But base revenue per loaded mile improved to $2,490 from $2,085 last year.
USA Truck continued a trend seen at several companies this quarter: improved profits even as the number of trucks dropped. The company said it had 1,782 seated tractors in the quarter, down from 1,871, and available tractors declined to 1,892 from 1,974. The average number of in-service tractors also was down, to 1,923 from 2,003.
Another trend seen at several companies is that even with all the attention on higher wages, the salary expenses line has been mostly flat. It was $36.6 million in 2021’s first quarter compared to $35.8 million last year. But USA Truck needed to spend a significant amount on the services of independent owner-operators, with purchased transportation soaring to $74.1 million, up from $47.8 million. That increase was more than the overall rise in operating expenses, increasing to $152.45 million, up from $129 million.
A significant turnaround was also reported at USA Truck’s brokerage division, USAT Logistics. Operating revenue rose to $68.4 million from $35.8 million in the first quarter of 2020. Adjusted operating income rose to $2.53 million from a loss of $624,000 last year. But the gross margin percentage rose by a relatively small 90 basis points to 12%.
“Much of this quarter’s improvement is due to the continued transformation of the Trucking segment through regionalization, optimization, pricing discipline, and a continued focus on safety and cost control,” Reed said in his statement.
He added that driver retention was marked by “lower turnover and reduced costs in the most difficult driver hiring environment in recent memory.” The retention rate was “much improved,” he said.
There were two stronger areas for USA Truck on its balance sheet. Net debt fell to $145.55 million, down from $154.2 million last year. But cash on hand, which was down to just $325,000 a year ago, came in at $2.92 million.