USA Truck plans to grow top-line revenue to $1 billion and earnings per share by up to $4.50 by the end of 2024, the company said on a call with analysts Friday.
“As we consider this strategic plan in the context of recent results, we expect to see corresponding value creation for shareholders,” James Reed, president and CEO, said during an earnings call. “In our opinion, USA Truck remains one of the best stories in this space.”
Van Buren, Arkansas-based USA Truck (NASDAQ: USAK) reported adjusted earnings per share of $1.38 during the fourth quarter, 60 cents better than the consensus estimate and 100% higher year-over-year.
The company reported revenue of $710.3 million for full-year 2021. Shares of USA Truck closed at $19.80 on Thursday.
The majority of revenue and earnings-per-share growth at USA Truck over the next two years will come from expanding its asset business network east of Interstate 35, doubling its logistics business and reducing the age of its tractor fleet, Reed said.
“Pricing is healthy and customers are more interested than ever in finding innovative solutions that address their cost headwinds, while allowing us to optimize our network,” Reed said. “The combined effect of the strategic outlook is an organization with top line revenues of just over a billion dollars, a blended operating ratio of 93% to 94%, and an earnings per share of $4.25 to $4.50 by the end of 2024.”
During the fourth quarter, the trucking segment recorded an adjusted operating ratio improvement of 440 basis points year-over-year to 88.7% and revenue of $119.4 million.
“The headline in our trucking segment is we got to sub-90 operating ratio in the quarter, on the combined effect of a strong market [and] equally strong execution by our team,” Reed said.
USA Truck’s owner-operator fleet has grown 9% year-over-year. That fleet currently represents 30% of USA Truck’s available tractor fleet.
“This group performs at a predictably low-90s operating ratio in almost any market condition,” Reed said. “Roughly 64% of our company’s revenues are now derived from nonasset or asset-light businesses, where someone else provides the tractor in capital.”
The company’s logistics segment, USAT Logistics, provided a 23.4% increase in load volume with operating revenue up 44.9% year-over-year to $94.6 million.
“We have strong momentum and what we believe is one of the best logistics businesses in North America and … by doubling our revenues we can add significant earnings growth with little corresponding capital investment,” Reed said. “This is a high return-on-invested-capital investment stream, and we expect the logistics business to grow to $400 million in top-line revenue by 2024.”
USA Truck increased truck availability to 1,875 units during the fourth quarter.
“Driver retention has become a strength that allows our team to become even better operators,” Reed said. “As we season associates who know our business, we get out of constant training mode and into a constant productivity mode.”
The company also plans on buying new tractors, but like other carriers across the country is being impacted by a shortage of new trucks. The average age of its company tractors was 2.9 years.
“There’s a meaningful operating income impact from a younger fleet; we exited 2021 at 2.9 years average for fleet age but expect to get to just over two years by the end of 2022,” Reed said. “Getting there is a risk that is consistent across the industry and not unique to USA Truck. We will do all we can to get back on track and partnering with our OEMs.”
The FREIGHTWAVES TOP 500 For-Hire Carriers list includes USA Truck (No. 51).
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