<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to ________________.
Commission file number 0-19858
USA TRUCK, INC.
- - --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 71-0556971
- - ------------------------------------- --------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3108 INDUSTRIAL PARK ROAD
VAN BUREN, ARKANSAS 72956
- - ------------------------------------- --------------------------------------
(Address of principal executive offices) (Zip Code)
(501) 471-2500
- - --------------------------------------------------------------------------------
Registrant's telephone number, including area code
Not applicable
- - --------------------------------------------------------------------------------
Former name, address and former fiscal year, if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
9,498,928 shares of common stock, $.01 par value, were outstanding on July
25, 1996.
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INDEX
USA TRUCK, INC.
PART I. FINANCIAL INFORMATION
<TABLE>
<S> <C> <C>
Item 1. Financial Statements (unaudited) Page
----
Condensed Balance Sheets -- June 30, 1996 and December 31, 1995 3
Condensed Statements of Income -- Three months and six months ended
June 30, 1996 and 1995 4
Condensed Statements of Cash Flows -- Six months ended June 30, 1996
and 1995 5
Notes to Condensed Financial Statements -- June 30, 1996 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders. 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K. 13
</TABLE>
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
USA TRUCK, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30 December 31
1996 1995
------------ ------------
(unaudited) (note)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,058,994 $ 1,656,392
Accounts receivable:
Trade, less allowance for doubtful accounts
(1996 - $ 113,000; 1995 - $ 104,000) 11,164,277 10,475,215
Other 374,750 1,448,283
Inventories 166,002 282,588
Deferred income taxes 472,810 750,408
Prepaid expenses and other current assets 1,510,567 1,394,769
------------ ------------
Total current assets 14,747,400 16,007,655
PROPERTY AND EQUIPMENT 86,481,898 83,285,531
ACCUMULATED DEPRECIATION AND AMORTIZATION (27,311,300) (22,932,039)
------------ ------------
59,170,598 60,353,492
SECURITY DEPOSITS 1,745,478 1,745,478
OTHER ASSETS 934,142 873,124
------------ ------------
Total assets $ 76,597,618 $ 78,979,749
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank drafts payable $ 645,298 $ 611,946
Trade accounts payable 1,219,028 2,041,985
Accrued expenses 6,366,277 7,320,859
Current maturities of long-term debt 5,633,480 3,320,650
------------ ------------
Total current liabilities 13,864,083 13,295,440
LONG-TERM DEBT, LESS CURRENT MATURITIES 9,115,087 13,360,579
DEFERRED INCOME TAXES 8,812,129 8,452,472
INSURANCE AND CLAIMS ACCRUALS 966,537 714,537
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.01 per share; 1,000,000 shares
authorized; none issued -- --
Common stock, par value $.01 per share; 16,000,000 shares authorized;
issued shares (1996 - 9,498,928; 1995 - 9,714,728) 94,989 97,147
Additional paid-in capital 13,801,871 16,320,361
Retained earnings 29,942,922 28,416,526
Less treasury stock, at cost (1996 - 0; 1995 - 152,000) shares -- (1,677,313)
------------ ------------
Total stockholders' equity 43,839,782 43,156,721
------------ ------------
Total liabilities and stockholders' equity $ 76,597,618 $ 78,979,749
============ ============
</TABLE>
NOTE: The balance sheet at December 31, 1995 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by general accepted accounting
principles for complete financial statements.
See notes to condensed financial statements.
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USA TRUCK, INC.
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
---------------------------- ----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 26,751,038 $ 26,129,072 $ 52,665,041 $ 52,130,903
OPERATING EXPENSES AND COSTS:
Salaries, wages and employee benefits 11,259,361 10,836,678 22,148,562 21,972,248
Operations and maintenance 7,590,754 6,796,700 15,019,903 13,450,202
Operating taxes and licenses 481,494 474,713 956,055 921,125
Insurance and claims 1,633,247 1,139,433 3,039,641 2,174,422
Communications and utilities 448,638 261,501 802,094 576,085
Depreciation and amortization 2,962,628 2,809,430 5,887,333 5,400,037
Other 916,150 594,002 1,882,423 1,210,111
------------ ------------ ------------ ------------
25,292,272 22,912,457 49,736,011 45,704,230
------------ ------------ ------------ ------------
OPERATING INCOME 1,458,766 3,216,615 2,929,030 6,426,673
OTHER (INCOME) EXPENSE:
Interest expense 199,178 237,259 403,421 428,717
Gain on disposal of assets -- -- (2,161) --
Other, net (2,589) (84,863) 24,234 (110,009)
------------ ------------ ------------ ------------
196,589 152,396 425,494 318,708
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 1,262,177 3,064,219 2,503,536 6,107,965
INCOME TAXES 494,031 1,175,128 977,141 2,342,405
------------ ------------ ------------ ------------
NET INCOME $ 768,146 $ 1,889,091 $ 1,526,395 $ 3,765,560
============ ============ ============ ============
PER SHARE INFORMATION:
Average shares outstanding 9,732,003 10,074,317 9,744,615 10,075,353
============ ============ ============ ============
Net income per share $ 0.08 $ 0.19 $ 0.16 $ 0.37
============ ============ ============ ============
</TABLE>
See notes to condensed financial statements.
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USA TRUCK, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30
----------------------------
1996 1995
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 1,526,395 $ 3,765,560
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 5,887,333 5,400,037
Provision for doubtful accounts 9,000 13,437
Deferred income taxes 637,255 792,901
Gain on sale of assets (2,161) --
Gain on sale of securities -- (39,441)
Changes in operating assets and liabilities:
Receivables 375,471 (1,449,351)
Inventories and prepaid expenses 788 (123,520)
Bank drafts, accounts payable and accrued expenses (1,744,187) 616,121
Insurance and claims accruals 252,000 100,000
------------ ------------
Net cash provided by operating activities 6,941,894 9,075,744
INVESTING ACTIVITIES:
Purchases of property and equipment (5,407,278) (10,812,816)
Purchases of investments -- (2,397,997)
Proceeds from sale of assets 705,000 597,039
Proceeds from sale of investments -- 2,437,438
Increase in other assets (61,018) (78,384)
------------ ------------
Net cash used by investing activities (4,763,296) (10,254,720)
FINANCING ACTIVITIES:
Borrowings under long-term debt 6,380,000 5,750,000
Proceeds from the exercise of stock options 272,050 14,250
Payments to repurchase common stock (1,115,384) --
Principal payments on long-term debt (6,630,000) (3,500,000)
Principal payments on capitalized lease obligations (1,682,662) (1,273,666)
------------ ------------
Net cash (used) provided by financing activities (2,775,996) 990,584
------------ ------------
DECREASE IN CASH AND CASH EQUIVALENTS: (597,398) (188,392)
Cash and cash equivalents at beginning of period 1,656,392 926,075
------------ ------------
Cash and cash equivalents at end of period $ 1,058,994 $ 737,683
============ ============
</TABLE>
See notes to condensed financial statements.
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USA TRUCK, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1996
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the six-month period ended June 30, 1996, are
not necessarily indicative of the results that may be expected for the year
ended December 31, 1996. For further information, refer to the financial
statements and footnotes thereto included in the annual report on Form 10-K of
USA Truck, Inc. (the "Company") for the year ended December 31, 1995.
NOTE B--COMMITMENTS
As of July 25, 1996, the Company had remaining commitments for the purchase of
revenue equipment in the aggregate amount of approximately $14.9 million in
1996 and $28.2 million in 1997 and for the completion of the new corporate
headquarters in Van Buren, Arkansas for $3.5 million.
NOTE C--LONG-TERM DEBT
On January 24, 1996, the Company entered into a lease commitment agreement (the
"TRAC Lease Commitment"), with a financial institution to facilitate the
leasing of tractors. The TRAC Lease Commitment provides for the leasing of
equipment not exceeding an acquisition cost of $10.0 million in the aggregate.
As of June 30, 1996, $10.0 million remained available under the TRAC Lease
Commitment. The commitment term ends on December 31, 1996. Each capital lease
will have a repayment period of 42 months. Lease amounts are limited based on
the amounts outstanding under capital leases entered into under this agreement.
The interest rate on the capital leases under the TRAC Lease Commitment
fluctuates in relation to the weekly average interest rate for 2-year Constant
Maturity Treasury Securities as published by the Federal Reserve and is fixed
upon execution of lease.
NOTE D--CAPITAL STOCK TRANSACTIONS
On May 8, 1996, the Board of Directors authorized the retirement of all shares
purchased prior to May 7, 1996, which resulted in the retirement of 254,000
shares of treasury stock that had been purchased at an aggregate cost of $2.8
million. On July 22, 1996, the Company made a purchase of 48,000 shares of its
outstanding common stock on the open market pursuant to a repurchase program
authorized by the Board of Directors in September, 1995.
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FORM 10-Q
USA TRUCK, INC.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following table sets forth the percentage relationship of certain items to
operating revenues for the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
--------------- ----------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
OPERATING REVENUES 100.0% 100.0% 100.0% 100.0%
OPERATING EXPENSES AND COSTS:
Salaries, wages and employee benefits 42.1 41.5 42.1 42.1
Operations and maintenance 28.4 26.0 28.5 25.8
Operating taxes and licenses 1.8 1.8 1.8 1.8
Insurance and claims 6.1 4.4 5.8 4.2
Communications and utilities 1.7 1.0 1.5 1.1
Depreciation and amortization 11.0 10.7 11.2 10.4
Other 3.4 2.3 3.5 2.3
------ ------ ------ ------
94.5 87.7 94.4 87.7
------ ------ ------ ------
OPERATING INCOME 5.5 12.3 5.6 12.3
OTHER (INCOME) EXPENSE:
Interest expense 0.7 0.9 0.8 0.8
Gain on disposal of assets -- -- -- --
Other, net -- (0.3) -- (0.2)
------ ------ ------ ------
0.7 0.6 0.8 0.6
------ ------ ------ ------
INCOME BEFORE INCOME TAXES 4.8 11.7 4.8 11.7
INCOME TAXES 1.9 4.5 1.9 4.5
------ ------ ------ ------
NET INCOME 2.9% 7.2% 2.9% 7.2%
====== ====== ====== ======
</TABLE>
RESULTS OF OPERATIONS
Quarter Ended June 30, 1996 Compared to Quarter Ended June 30, 1995
Operating revenues increased 2.4% to $26.8 million in 1996 from $26.1
million in 1995, resulting from increased business with existing customers and
additional business from new customers, partially offset by a slight decrease
in average revenue per mile. Average revenue per mile decreased to $1.108 in
1996 from $1.111 in 1995. The empty mile factor decreased to 10.23% in 1996
from 10.73% of paid miles in the second quarter of 1995. There was a 9.5%
increase in the number of shipments to 24,780 in 1996 from 22,629 in 1995. This
volume improvement was made possible by an increase of 2.4% in the
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average number of tractors operated from 776 in 1995 to 795 in 1996. The net
effect of the volume improvement and the Company's continuing fleet expansion
was a slight increase of 0.2% in miles per tractor per week to 2,410 in 1996
from 2,405 in 1995.
Operating expenses and costs as a percentage of revenues increased to
94.5% in 1996 from 87.7% in 1995. This change resulted primarily from an
increase, on a percentage of revenue basis, in salaries, wages and employee
benefits, in operations and maintenance costs, in insurance and claims
expenses, in communications and utilities and in other expenses. The increase
in salaries, wages and employee benefits was primarily due to increased
aggregate driver pay. Because driver pay is generally fixed on a per mile
basis, driver compensation costs associated with increased business and fleet
expansion are often offset with corresponding increases in revenues. Because
average revenue per mile decreased slightly in the second quarter of 1996, as
discussed above, the effect of the drivers' pay increase, along with the
moderate improvement in utilization rate, was an increase in salaries, wages
and employee benefits as a percentage of revenues. The percentage increase,
relative to revenues, in operations and maintenance was primarily the result of
an increase of 11.6 cents per gallon in the average cost of fuel in the second
quarter of this year compared to the same period last year and an increase in
costs to maintain and repair road equipment, partially offset by an increase in
fuel efficiency to 6.30 average miles per gallon in 1996 from 6.23 in 1995. The
percentage increase, relative to revenues, in insurance and claims expense was
due to an increase in the number and severity of insurance claims filed in the
second quarter of 1996 as compared to the same period last year. The increase
in depreciation and amortization expense reflects the effects of timing
differences between trading cycles and purchasing schedules along with an
increase in the cost of tractors and trailers when compared to those units
being retired. Communications and utilities increased, on a percentage of
revenue basis, due to the aggregate effect of a slight increase in service
costs and the expiration of usage incentives that were available in the
telecommunications industry for the same period last year. Other expenses
increased, relative to revenues, due to a variety of factors, no single one of
which accounted for more than half of the increase. One such factor was an
increase of approximately $105,000 in programming and data processing costs.
As a result of the foregoing factors, operating income decreased 54.7% to
$1.5 million, or 5.5% of revenues, in 1996 from $3.2 million, or 12.3% of
revenues, in 1995.
Interest expense decreased 16.0% to $200,000 in 1996 from $240,000 in
1995, resulting primarily from a decrease in borrowings, partially offset by a
slight increase in interest rates, in the aggregate, on both short-term and
long-term debt.
Other income decreased 96.9% to $2,600 in 1996 from $84,900 in 1995,
resulting primarily from a decrease in interest income and the absence of
sales, and the associated gains on those sales, of investment securities by the
Company as had occurred during this same quarter in 1995.
As a result of the above, income before income taxes decreased 58.8% to
$1.3 million, or 4.8% of revenues, in 1996 from $3.1 million, or 11.7% of
revenues, in 1995.
The Company's effective tax rate increased to 38.9% in 1996 from 38.4% in
1995. The effective rates varied from the statutory Federal tax rate of 34%
primarily due to state income taxes and certain non-deductible expenses.
As a result of the aforementioned factors, net income decreased 59.3% to
$770,000 ($.08 per share), or 2.9% of revenues, in 1996 from $1.9 million ($.19
per share), or 7.2% of revenues, in 1995. The number of shares used in the
calculation of net income per share for the second quarters of 1996 end
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1995 were 9,732,003 and 10,074,317, respectively. Total shares outstanding at
June 30, 1996, were 9,498,928.
Six-Months Ended June 30, 1996 Compared to Six-Months Ended June 30, 1995
Operating revenues increased 1.0% to $52.7 million in 1996 from $52.1
million in 1995, resulting from increased business with existing customers and
additional business from new customers, partially offset by a 0.4% decrease in
average revenue per mile. Average revenue per mile decreased to $1.107 in 1996
from $1.112 in 1995 as the result of a 3.6% decline in the tractor utilization
rate, partially offset by a decrease in the empty mile factor to 10.39% in 1996
from 10.51% of paid miles in the first six months of 1995. There was a 8.5%
increase in the number of shipments to 49,333 in 1996 from 45,459 in 1995. This
volume improvement was made possible by an increase of 5.2% in the average
number of tractors operated from 749 in 1995 to 788 in 1996. The net effect of
the volume improvement and the Company's continuing fleet expansion was a
decrease of 3.6% in miles per tractor per week to 2,376 in 1996 from 2,464 in
1995.
Operating expenses and costs as a percentage of revenues increased to
94.4% in 1996 from 87.7% in 1995, for the same reasons discussed above, except
for salaries, wages and employee benefits, in the comparison of the quarter
ended June 30, 1996 to the quarter ended June 30, 1995. Salaries, wages and
employee benefits remained unchanged, on a percentage of revenue basis, for the
comparable six month periods between 1996 and 1995. This was due to the fact
that the increase in aggregate driver pay was offset by a decrease in
incentives earned by employees on both financial results and performance goals.
As a result of the foregoing factors, operating income decreased 54.4% to
$2.9 million, or 5.6% of revenues, in 1996 from $6.4 million, or 12.3% of
revenues, in 1995.
Interest expense decreased 5.9% to $400,000 in 1996 from $430,000 in 1995,
resulting primarily from a decrease in borrowings, partially offset by a slight
increase in interest rates, in the aggregate, on both short-term and long-term
debt.
Other, net expenses increased 122.0% to $20,000 in 1996 from $(0.11)
million in 1995, resulting primarily from a decrease in interest income and the
absence of sales, and the associated gains on those sales, of investment
securities by the Company as had occurred during the first half in 1995.
As a result of the above, income before income taxes decreased 59.0% to
$2.5 million, or 4.8% of revenues, in 1996 from $6.1 million, or 11.7% of
revenues, in 1995.
The Company's effective tax rate increased to 38.9% in 1996 from 38.4% in
1995. The effective rates varied from the statutory Federal tax rate of 34%
primarily due to state income taxes and certain non-deductible expenses.
As a result of the aforementioned factors, net income decreased 56.8% to
$1.5 million ($.16 per share), or 2.9% of revenues, in 1996 from $3.8 million
($.37 per share), or 7.2% of revenues, in 1995. Number of shares used in the
calculation of net income per share for the six months ending June 30, 1996 and
1995 were 9,744,615 and 10,075,353, respectively.
SEASONALITY
In the trucking industry generally, revenues are lower in the first and
fourth quarters as customers decrease shipments during the winter holiday
season and as inclement weather impedes operations. At
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the same time, operating expenses increase, due primarily to decreased fuel
efficiency and increased maintenance costs. These factors historically have
tended to decrease net income in the first and fourth quarters. Future revenues
could be impacted if customers reduce shipments due to temporary plant
closings, which historically have occurred during July and December.
FUEL AVAILABILITY AND COST
The motor carrier industry is dependent upon the availability of diesel
fuel, and fuel shortages or increases in fuel taxes or fuel costs could
adversely affect the profitability of USA Truck. Fuel prices have fluctuated
widely and fuel taxes have generally increased in recent years. Most recently,
USA Truck has experienced a price increase of approximately 16 cents per gallon
over a period of 6 months. The Company has not experienced difficulty in
maintaining necessary fuel supplies, and the Company generally has been able to
recover increases in fuel costs and fuel taxes from customers through increased
freight rates. There can be no assurance, however, that the Company will be
able to recover these increased fuel costs, or any future increases in fuel
costs and fuel taxes through increased rates.
LIQUIDITY & CAPITAL RESOURCES
The continued growth of the Company's business has required significant
investments in new equipment. USA Truck has financed revenue equipment
purchases with cash flows from operations and through borrowings under the
Company's collateralized revolving credit agreement (the "General Line of
Credit"), an additional line of credit (the "Equipment Line of Credit") and
conventional financing and lease-purchase arrangements. Working capital needs
have generally been met with cash flows from operations and occasionally with
borrowings under the General Line of Credit. Although the Company has not
relied significantly on the General Line of Credit to meet working capital
requirements, it does experience cyclical cash flow needs common to the
industry. The Company uses the General Line of Credit to minimize these
fluctuations and to provide flexibility in financing revenue equipment
purchases. Cash flows from operations were $6.9 million for the six-month
period ended June 30, 1996 as compared to $9.1 million in the comparable period
of 1995.
The Company's General Line of Credit provides for available borrowings of
up to $10.0 million, including letters of credit not exceeding $5.0 million. As
of June 30, 1996, approximately $5.9 million was available under the General
Line of Credit. The General Line of Credit matures on April 30, 1998, prior to
which time, subject to certain conditions, the amount outstanding can be
converted at any time, at the Company's option, to a four-year term loan
requiring 48 equal monthly principal payments plus interest. The interest rate
on the General Line of Credit (8.25% at June 30, 1996) fluctuates between the
lender's prime rate and prime plus 1/2%, depending upon the ratio of the
Company's debt to tangible net worth. Under the General Line of Credit, the
Company has the right to borrow at a rate related to the Eurodollar rate when
this rate is less than the lender's prime rate. A quarterly commitment fee of
1/4% per annum is payable on the unused amount of the available borrowings. The
principal maturity can be accelerated if the borrowing base (based on a
percentage of receivables and otherwise unsecured equipment) does not support
the principal balance outstanding. The General Line of Credit is collateralized
by accounts receivable and all otherwise unencumbered equipment. The Company
has the option under certain conditions and at certain rates to fix the rate
and term on portions of the outstanding balance of the General Line of Credit.
The Equipment Line of Credit is a collateralized credit agreement entered
into with another financial institution in July 1993 and amended in July 1995
to facilitate the purchase and/or lease of tractors. The Equipment Line of
Credit had a commitment term that ended on June 30, 1996 and provided for a
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maximum loan amount of approximately $17.6 million. Advances were required to
be used for the purchase of conventional tractors, and each advance was
converted to a capital lease with a repayment period of 42 months. The Company
elected not to renew the Equipment Line of Credit in 1996. As of June 30, 1996,
the Company's outstanding obligation under the Equipment Line of Credit was
$11.2 million. The interest rate on borrowings under the Equipment Line of
Credit fluctuated in relation to the LIBOR rate. The Company converted the
interest rates applicable to all such borrowings to fixed rates ranging from
1.9% to 7.5%, determined in relation to the "ask yield" for United States Bonds
and Notes. The Equipment Line of Credit is collateralized by the tractors
purchased with the borrowings under the Equipment Line of Credit.
On January 24, 1996, the Company entered into a lease commitment agreement
(the "TRAC Lease Commitment"), with a third financial institution to facilitate
the leasing of tractors. The TRAC Lease Commitment provides for the leasing of
equipment not exceeding an acquisition cost of $10.0 million in the aggregate.
As of June 30, 1996, $10.0 million remained available under the TRAC Lease
Commitment. The commitment term ends on December 31, 1996. Each capital lease
will have a repayment period of 42 months. Lease amounts are limited based on
the amounts outstanding under capital leases entered into under this agreement.
The interest rate on the capital leases under the TRAC Lease Commitment
fluctuates in relation to the weekly average interest rate for 2-year Constant
Maturity Treasury Securities as published by the Federal Reserve and is fixed
upon execution of lease.
At June 30, 1996, the Company had debt obligations of approximately $14.7
million of which approximately $5.6 million were current obligations. During
the second quarter of 1996 the Company made borrowings under the General Line
of Credit of $2.7 million, while retiring approximately $4.3 million of debt.
The retired debt had average interest rates of approximately 6.55%.
During the years 1996 and 1997 the Company plans to make approximately
$54.2 million in capital expenditures, $5.9 million of which had been expended
through July 25, 1996. As of July 25, 1996, USA Truck was committed to spend
$14.9 million for revenue equipment during the remainder of 1996 and $28.2
million for revenue equipment in 1997. The commitments to purchase revenue
equipment are cancelable by the Company if certain conditions are met. Also,
the Company has a remaining commitment for $3.5 million, of a total commitment
of $4.9 million, relating to construction of a new corporate headquarters in
Van Buren, Arkansas. The new headquarters facility is currently expected to be
completed in the first half of 1997. The balance of the expected capital
expenditures will be used for the purchase of maintenance and office equipment
and facility improvements.
The General Line of Credit, the TRAC Lease Commitment, equipment leases
and cash flows from operations should be adequate to fund the Company's
operations and expansion plans through the end of 1997. There can be no
assurance, however, that such sources will be sufficient to fund the Company's
operations and all expansion plans through such date, or that any necessary
additional financing will be available, if at all, in amounts required or on
terms satisfactory to the Company. The Company expects to continue to fund its
operations with cash flows from operations, the General Line of Credit, the
TRAC Lease Commitment and equipment leases for the foreseeable future.
In September 1995, the Board of Directors authorized the Company to
repurchase up to 500,000 shares of its outstanding common stock, on the open
market or in private negotiated transactions, from time to time over a period
of three years. As of July 25, 1996, the Company had purchased 302,000 shares
pursuant to this authorization at a aggregate purchase price of $3.3 million,
including 150,000 shares purchased in 1996, at an aggregate purchase price of
$1.7 million. On May 8, 1996, the Board of Directors authorized the retirement
of all shares purchased prior to May 7, 1996, which resulted in the
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retirement of 254,000 shares of treasury stock that had been purchased at an
aggregate cost of $2.8 million. The Company may continue to purchase shares in
the future if, in the view of management, the common stock is undervalued
relative to the Company's performance and prospects for continued growth. Any
such purchases would be funded with cash flows from operations or the General
Line of Credit.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements and information that are
based on management's belief as well as assumptions made by and information
currently available to management. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will be realized. Should one or
more of the risks or uncertainties underlying such expectations materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those expected. Among the key factors that are not within the
Company's control and that may have a direct bearing on operating results are
further increases in diesel prices, adverse weather conditions and the impact
of increased rate competition. The Company's results may also be significantly
affected by fluctuations in general economic conditions, as the Company's
utilization rates are directly related to business levels of shippers in a
variety of industries. Results for any specific quarter could also be affected
by various unforeseen events, such as unusual levels of equipment failure or
accident claims.
Page 12
<PAGE> 13
USA TRUCK, INC.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The annual meeting of stockholders of the Company was held on May 8, 1996.
At the meeting, the stockholders elected the persons set forth in the table
below to serve as directors for terms expiring at the 1999 Annual Meeting of
Stockholders:
<TABLE>
<CAPTION>
Votes Votes Broker
Nominee For Withheld Non-Votes
----------- ---------- -------- ---------
<S> <C> <C> <C> <C>
J. Gordon Watson 8,697,964 3,531 -0-
Jim L. Hanna 8,697,964 3,531 -0-
</TABLE>
Item 5. Other Information.
Mr. J. Gordon Watson, Vice President - Operations, at USA Truck, retired
at the end of May 1996. Mr. Watson resigned his position on the board of
directors of the Company effective in June of this year. Mr. Watson's position
and title has been assumed by Mr. George R. Jacobs. Mr. Jacobs has been
employed at USA Truck and has served as a member of the board of directors
since 1986. He has most recently served in the position of Vice President -
Maintenance and Administration since January 1989 and has over 30 years of
experience in the transportation industry. Mr. Allison L. "Bud" Pierce has been
newly appointed to the office of Vice President - Human Resources, Insurance,
and Safety. Mr. Pierce has been employed with USA Truck since 1987 in the
capacity of Director of Human Resources and Safety and has over 20 years
experience in the human resources field. Mr. Watson's position on the Board of
Directors has not been filled as of July 25, 1996.
Item 6. Exhibits and Reports on Form 8-K.
(A) Exhibits
11.1 Statement Re: Computation of Earnings Per Share
27.1 Financial Data Schedule
(B) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
three months ended June 30, 1996.
Page 13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
USA TRUCK, INC.
-------------------------------------
(Registrant)
Date: 07/29/96 /s/ ROBERT M. POWELL
------------ -------------------------------------
ROBERT M. POWELL
President and Chief Executive Officer
Date: 07/29/96 /s/ JERRY D. ORLER
------------ -------------------------------------
JERRY D. ORLER
Vice President-Finance and
Chief Financial Officer
Page 14
<PAGE> 15
FORM 10-Q
INDEX TO EXHIBITS
USA TRUCK, INC.
Exhibit
Number Exhibit
- - -------- -------------------------------------------------
11.1 Statement Re: Computation of Earnings Per Share
27.1 Financial Data Schedule
<PAGE> 1
EXHIBIT 11.1
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
USA TRUCK, INC.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
-------------------------- --------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Average shares outstanding 9,486,620 9,692,728 9,475,748 9,690,937
Net effect of dilutive stock options-
based on the treasury stock method
using average market price 245,383 381,589 268,867 384,416
------------ ------------ ------------ ------------
Totals 9,732,003 10,074,317 9,744,615 10,075,353
============ ============ ============ ============
Net income $ 768,146 $ 1,889,091 $ 1,526,395 $ 3,765,560
============ ============ ============ ============
Net income per share $ 0.08 $ 0.19 $ 0.16 $ 0.37
============ ============ ============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,058,994
<SECURITIES> 0
<RECEIVABLES> 11,539,027
<ALLOWANCES> 113,000
<INVENTORY> 166,002
<CURRENT-ASSETS> 14,747,400
<PP&E> 86,481,898
<DEPRECIATION> 27,311,300
<TOTAL-ASSETS> 76,597,618
<CURRENT-LIABILITIES> 13,864,083
<BONDS> 0
<COMMON> 94,989
0
0
<OTHER-SE> 43,744,793
<TOTAL-LIABILITY-AND-EQUITY> 76,597,618
<SALES> 26,751,038
<TOTAL-REVENUES> 26,751,038
<CGS> 0
<TOTAL-COSTS> 25,292,272
<OTHER-EXPENSES> 196,589
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 199,178
<INCOME-PRETAX> 1,262,177
<INCOME-TAX> 494,031
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 768,146
<EPS-PRIMARY> .08
<EPS-DILUTED> 0
</TABLE>
