Another tough quarter for USA Truck Inc. (NASDAQ: USAK) has prompted the company to announce more organizational changes, including an 8% reduction in nondriver staff.
In an earnings release filed after the market close on Thursday, USA Truck reported a fourth-quarter 2019 adjusted loss of $0.52 per share or $4.5 million, compared to analysts’ expectations of a $0.08-per-share loss.
The company’s relatively small share count of 8.6 million magnifies the loss on a per-share amount. In total, the company’s loss was more than $3.5 million worse than expected and outpaces the $1.1 million loss it reported in the third quarter of 2019.
The Arkansas-based truckload (TL) carrier reported an 8% year-over-year decline in TL revenue and revenue per truck per week, which declined to $3,163. Loaded miles per tractor per week increased 1% as the average seated truck count increased by 49 units. However, revenue per loaded mile declined 9% year-over-year to $2.15.
“The soft spot market and widely reported supply-demand imbalance affected both our contract and spot market opportunities during the quarter. Market rates remained pressured during the quarter and shippers allocated large portions of their freight spend to the lowest cost alternatives,” stated USA Truck President and CEO James Reed.
The TL division reported an adjusted operating loss of $2.2 million in the period, considerably lower than the $7.6 million adjusted operating profit reported from the group in the fourth quarter of 2018. The press release cited “lower volumes on committed lanes coupled with spot market pricing pressure and lower participation in expected seasonal surge opportunities” as the culprits.
The company’s logistics division, USAT Logistics, fared no better. Revenue was down 24% year-over-year in the fourth quarter as loads declined 6% and gross margin declined 310 basis points (bps) to 11.5%. The increase of participants — well-funded digital brokers as well as asset-based TL carriers — in truck brokerage markets looking to take share, lower spot and contractual rates and softer demand has resulted in significant margin compression for the group. The result for USAT Logistics was a 20% year-over-year decline in revenue per load to $1,303.
The division did report a slightly more than 2% sequential increase in revenue per load from third quarter to fourth.
Further, the release noted some improvement in recent weeks.
“January has begun with what we believe is a positive market inflection — customer bid activity and freight volumes are improved over recent trends. We have also increased our win percentage in the bid process including recent dedicated contracts, which speaks to our customers’ confidence in the changes we are making,” Reed continued.
The company will host a conference call with analysts and investors Friday at 10:30 a.m. EDT to discuss these results.
Shares of USAK are off 9% in after-hours trading.
Noble1
Quote:
Further, the release noted some improvement in recent weeks.
“January has begun with what we believe is a positive market inflection — customer bid activity and freight volumes are improved over recent trends. We have also increased our win percentage in the bid process including recent dedicated contracts, which speaks to our customers’ confidence in the changes we are making,” Reed continued.
Not worried for them . Current loses pale in comparison to those released in October 2012 . Then look what followed , price reversed from a $2.65 low up to a $32.14 high in February 2015
They’re certainly feeling the cyclical pinch . In regards to their O/S , Look at the float instead . A small float contributes to the volatility in their share price in either direction . It doesn’t take much to move it ! Short positions have been slowly decreasing since August , however, I consider 10.5% of the float shorted to be high on a stock with such a low float on a very low daily share trading average . That being said , short volume increased a little yesterday by almost 13k shares, raising the short ratio to 10.92% compared to the short interest recorded on the 15th .
Based on the negative earnings release , and the stock being in a narrow low volatility range , one would expect volatility to increase .. After hours trading gave it away and price dropped 9% . That means the stock will open with a gap down increasing volatility in the process . This could potentially turn into a selling climax and paint a bullish exhaustion gap .
I’d keep an eye on it for the next 2 weeks and watch for any news releases very closely or any spike in volume and price that would appear out of the ordinary . Anything remotely positive could engender a short squeeze on this one and price could thrust like a spark would cause on a firework , LOL !
Best of luck !
In my humble opinion .
Noble1
Well would you look at that , LOL !
What occurred since the open ? LOL !
Quote myself !
“This could potentially turn into a selling climax and paint a bullish exhaustion gap . ”
Told ya !
Best of luck !
In my humble opinion ……….
Elvis Durant
I expect this one to go under soon. Been saying that for a while…..Nothing but misery in this industry overall!
Dave
They need to ramp up new and proven trucking and brokerage technology and slash labor costs to survive. The entire market is killing them with technology while USAT plods along like nothing is wrong.