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 March 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
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Commission file number 0-19858
USA TRUCK, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 71-05569
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3200 INDUSTRIAL PARK ROAD
VAN BUREN, ARKANSAS 72956
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(Address of principal executive offices) (Zip Code)
(501) 471-2500
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Registrant's telephone number, including area code
Not applicable
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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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
9,230,388 shares of common stock, $.01 par value, were outstanding on April
17, 2001.
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INDEX
USA TRUCK, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited) Page
------
Condensed Consolidated Balance Sheets - March 31, 2001 and
December 31, 2000 3
Condensed Consolidated Statements of Income and Comprehensive Income -
Three months ended March 31, 2001 and 2000 4
Condensed Consolidated Statements of Cash Flows - Three months ended
March 31, 2001 and 2000 5
Notes to Condensed Consolidated Financial Statements - March 31, 2001 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. 15
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
USA TRUCK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2001 2000
------------- -------------
(unaudited) (note)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,527,532 $ 1,674,730
Accounting receivable:
Trade, less allowance for doubtful accounts
(2001 - $ 315,203; 2000 - $ 303,203) 30,743,023 30,019,565
Other 5,273,614 3,853,642
Inventories 475,068 382,639
Deferred income taxes 1,015,001 1,607,633
Prepaid expenses and other current assets 5,452,652 4,200,618
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Total current assets 46,486,890 41,738,827
PROPERTY AND EQUIPMENT 203,324,670 203,146,633
ACCUMULATED DEPRECIATION AND AMORTIZATION (56,081,405) (55,417,751)
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147,243,265 147,728,882
OTHER ASSETS 151,753 451,115
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Total assets $ 193,881,908 $ 189,918,824
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank drafts payable $ 1,608,333 $ 1,487,086
Trade accounts payable 6,343,059 5,870,192
Accrued expenses 11,957,451 10,131,717
Current maturities of long-term debt 11,024,350 12,867,611
------------- -------------
Total current liabilities 30,933,193 30,356,606
LONG-TERM DEBT, LESS CURRENT MATURITIES 70,521,853 65,660,268
DEFERRED INCOME TAXES 19,866,684 21,111,025
LONG-TERM INSURANCE AND CLAIMS ACCRUALS 2,960,214 2,810,214
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 (2001 - 9,285,986; 2000 - 9,282,889) 92,860 92,829
Additional paid-in capital 11,318,250 11,318,280
Retained earnings 58,529,980 58,934,888
Less treasury stock, at cost (2001 - 55,598; 2000 - 59,835) (341,126) (365,286)
------------- -------------
Total stockholders' equity 69,599,964 69,980,711
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Total liabilities and stockholders' equity $ 193,881,908 $ 189,918,824
============= =============
NOTE: The balance sheet at December 31, 2000 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed consolidated financial statements.
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USA TRUCK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended
March 31,
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2001 2000
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OPERATING REVENUES $ 60,908,374 $ 55,144,425
OPERATING EXPENSES AND COSTS:
Salaries, wages and employee benefits 26,307,339 22,511,334
Operations and maintenance 20,060,361 17,708,908
Operating taxes and licenses 1,011,831 1,175,876
Insurance and claims 3,070,015 2,809,509
Communications and utilities 684,539 711,992
Depreciation and amortization 6,726,050 6,821,145
Other 2,454,788 2,605,599
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60,314,923 54,344,363
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OPERATING INCOME 593,451 800,062
OTHER (INCOME) EXPENSE:
Interest expense 1,286,032 1,376,565
(Gain) or Loss on disposal of assets (18,938) 34,773
Other, net (11,093) 39,897
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1,256,001 1,451,235
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LOSS BEFORE INCOME TAXES (662,550) (651,173)
INCOME TAXES (BENEFIT) (257,640) (256,788)
------------ ------------
NET LOSS AND COMPREHENSIVE LOSS $ (404,910) $ (394,385)
============ ============
PER SHARE INFORMATION:
Average shares outstanding (Basic) 9,224,550 9,266,229
============ ============
Basic net loss per share $ (0.04) $ (0.04)
============ ============
Average shares outstanding (Diluted) 9,232,087 9,288,976
============ ============
Diluted net loss per share $ (0.04) $ (0.04)
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See notes to condensed consolidated financial statements.
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USA TRUCK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
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2001 2000
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OPERATING ACTIVITIES:
Net loss $ (404,910) $ (394,385)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 6,726,050 6,828,665
Provision for doubtful accounts 12,000 9,000
Deferred income taxes (651,709) 746,730
(Gain) Loss on sale of assets (18,938) 34,773
Changes in operating assets and liabilities:
Receivables (2,155,430) (1,001,834)
Inventories and prepaid expenses (1,344,463) (1,594,124)
Bank drafts payable, accounts payable and accrued expenses 2,419,848 (1,777,656)
Insurance and claims accruals - long term 150,000 120,000
------------ ------------
Net cash provided by operating activities 4,732,448 2,971,169
INVESTING ACTIVITIES:
Purchases of property and equipment (10,417,554) (5,357,535)
Proceeds from sale of property and equipment 4,196,060 5,178,796
Change in other assets 299,362 (11,000)
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Net cash used by investing activities (5,922,132) (189,739)
FINANCING ACTIVITIES:
Borrowing under long-term debt 48,737,000 11,197,632
Proceeds from the exercise of stock options 2 --
Proceeds from sale of treasury stock 24,160 29,127
Principal payments on long-term debt (41,403,000) (12,550,324)
Principal payments on capitalized lease obligations (4,315,676) (2,417,532)
------------ ------------
Net cash provided by (used by) financing activities 3,042,486 (3,741,097)
------------ ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,852,802 (959,667)
Cash and cash equivalents at beginning of period 1,674,730 2,145,707
------------ ------------
Cash and cash equivalents at end of period $ 3,527,532 $ 1,186,040
============ ============
See notes to condensed consolidated financial statements.
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USA TRUCK, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2001
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States 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 adjustments considered necessary for
a fair presentation) have been included. Operating results for the three-month
period ended March 31, 2001, are not necessarily indicative of the results that
may be expected for the year ended December 31, 2001. 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, 2000.
NOTE B - COMMITMENTS
As of April 17, 2001, the Company had remaining commitments for purchases
of revenue equipment in the aggregate amount of approximately $30.0 million in
2001. As part of these commitments, the Company has remaining contracts for the
purchase of 382 tractors and the sale of 376 tractors during 2001. These
contracts are cancelable by either USA Truck or the vendor within a certain time
period before delivery of the equipment. If the terms of the contracts are
carried out, the Company would recognize an after-tax, non-cash loss from such
sales of up to $0.5 million during 2001. Most of these losses are expected to
occur in the fourth quarter of 2001 on certain groups of tractors. They result
from the sale of such tractors by the Company at prices that will likely be
below the depreciated cost of such tractors as carried on the Company's books.
The low sales prices for such vehicles result from an unusually poor used
tractor market caused, for the most part, by oversupply of vehicles. Beginning
in the fourth quarter of 2000, the Company increased slightly the depreciation
rate on some of its tractors, which will result in a slightly increased charge
to net income for 2001. Provided the Company can secure better pricing, it will
attempt to limit these losses by selling these tractors to unrelated
third-parties which could yield prices closer to book values on these tractors
and reduce these contractual capital losses. The Company also had a commitment
to purchase land for approximately $1.3 million to be used for the expansion of
a terminal facility in Vandalia, Ohio in 2001.
NOTE C - CAPITAL STOCK TRANSACTIONS
During the three-month period ended March 31, 2001, the Company did not
repurchase any of its outstanding common stock on the open market pursuant to
the repurchase program authorized by the Board of Directors in July 1998.
However, the Company did distribute 3,271 treasury shares, pursuant to the
Company's Employee Stock Purchase Plan, to participants in such Plan.
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As of March 31, 2001, 5,014,795 shares of the 9,285,986 shares outstanding
were owned either directly or beneficially by executive officers or directors of
the Company.
NOTE D - LONG-TERM DEBT
On April 28, 2000, the Company signed a new senior credit facility (the
"Senior Credit Facility") that provides a working capital line of credit of
$60.0 million, including letters of credit not exceeding $5.0 million. Bank of
America, N.A. is the agent bank and SunTrust Bank and Firstar Bank, N.A. are
participants. The Senior Credit Facility matures on April 28, 2005. The rates
are based on grid pricing which uses the Company's ratio of total funded debt to
earnings before interest, taxes, depreciation, amortization and rent ("EBITDAR")
to determine the points to be added to the base LIBOR rate. A quarterly
commitment fee is payable on the unused amount and the rate is also based on
grid pricing as described above. On March 30, 2001, the Company amended its
Senior Credit Facility to modify the covenants and more accurately align them
with the Company's recent operating performance resulting from the general
economic conditions in the truckload market. The Company modified its grid
pricing which is based on its Total Funded Debt to EBITDAR ratio. The amended
applicable rate increments were increased slightly for certain Total Funded Debt
to EBITDAR ratios. The Company does not expect the increase in rates to have a
significant impact on the Company's financial statements. The Company repaid all
amounts due under its collateralized revolving credit agreement (the "General
Line of Credit") in the amount of $36.1 million and subsequently terminated the
General Line of Credit.
NOTE E - NEW ACCOUNTING PRONOUNCEMENTS
In 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use. This statement provides guidance on the
capitalization of certain costs incurred in developing or acquiring internal-use
computer software. This statement was adopted in 1998 and did not have a
significant impact on the Company's financial statements.
In June, 1998, the Financial Accounting Standards Board issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. The Statement
has been amended by SFAS No. 137 and is effective for all quarters of fiscal
years beginning after June 15, 2000. It establishes accounting and reporting
standards requiring that every derivative instrument be recorded in the balance
sheet as either an asset or liability at its fair value. The Company adopted
SFAS No. 133, as amended by SFAS No. 137, on January 1, 2001. The adoption had
no effect on earnings or the financial position on the Company.
NOTE F - SUBSEQUENT EVENTS
None.
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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:
Three Months Ended
March 31,
------------------
2001 2000
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OPERATING REVENUES 100.0% 100.0%
OPERATING EXPENSES AND COSTS:
Salaries, wages and employee benefits 43.2 40.8
Operations and maintenance 32.9 32.1
Operating taxes and licenses 1.7 2.1
Insurance and claims 5.0 5.1
Communications and utilities 1.1 1.3
Depreciation and amortization 11.0 12.4
Other 4.0 4.7
---- ----
98.9 98.5
---- ----
OPERATING INCOME 1.1 1.5
OTHER (INCOME) EXPENSE:
Interest expense 2.1 2.5
Loss on disposal of assets -- 0.1
Other, net -- 0.1
---- ----
2.1 2.7
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LOSS BEFORE INCOME TAXES (1.0) (1.2)
INCOME TAXES (BENEFIT) (0.5) (0.5)
---- ----
NET LOSS AND COMPREHENSIVE LOSS (0.5)% (0.7)%
==== ====
RESULTS OF OPERATIONS
Quarter Ended March 31, 2001 Compared to Quarter Ended March 31, 2000
Operating revenues increased 10.5% to $60.9 million in the first quarter of
2001 from $55.1 million for the same quarter of 2000. The Company believes this
increase is due primarily to additional business from existing customers which
was aided by the reduction in unassigned tractors, and to a lesser extent, the
Company's logistics services, dedicated fleet operations, and private fleet
conversions. Average revenue per mile increased to $1.187 in the first quarter
of 2001 from $1.162 in 2000. The number of shipments increased 13.5% to 55,048
in 2001 from
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48,508 in 2000. This volume improvement was made possible in part by an increase
of 2.0% in the average number of tractors operated from 1,729 in 2000 to 1,763
in 2001 but to a greater extent, the fact that the number of unassigned tractors
has dramatically declined and almost all of our tractors have been assigned to a
driver during the first quarter of 2001. As a result of the improved driver
situation, miles per tractor per week increased 6.1% from 2,144 in 2000 to 2,274
in 2001 however, the empty mile factor increased to 9.69% in 2001 from 9.00% of
paid miles in the third quarter of 2000.
Operating expenses and costs as a percentage of revenues increased to 98.9%
in 2001 from 98.5% in 2000. This change resulted primarily from increases, on a
percentage of revenue basis, in salaries, wages and employee benefits and
operations and maintenance costs. These increases were partially offset by a
decrease, on a percentage of revenue basis, in depreciation and amortization and
other expenses. The increase in salaries, wages and employee benefits was
primarily the result of a 3.1% increase in the average rate per mile paid to our
drivers partially offset by a 0.3% reduction in the cost of employee benefits
for the first quarter of 2001 as compared to the same quarter of 2000. The
increase in operations and maintenance costs as a percentage of revenue, was
primarily the result of an increase of 0.7% in the cost of repairs and
maintenance of the Company's road tractors. This increase came as a result of
the Company using third-party repair facilities to a greater extent during the
first quarter of 2001 to repair its tractors and trailers than in the first
quarter of 2000. The decrease in depreciation and amortization, on a percentage
of revenue basis, was the result of better utilization of the Company's revenue
equipment. The increase in the average miles per tractor per week equated to an
additional $3.48 million in revenue for the first quarter of 2001, which served
to drive depreciation and amortization down 0.7% as a percentage of revenue. The
decrease in other expenses, relative to revenues, was primarily related to a
reduction in recruiting and training expenses and an increase in the average
revenue per mile.
As a result of the foregoing factors, operating income decreased 22.9% to
$0.6 million, or 1.1% of revenues, in 2001 from $0.8 million, or 1.5% of
revenues, in 2000.
Interest expense decreased 6.6% to $1.29 million in 2001 from $1.38 million
in 2000, resulting primarily from a decrease in the average borrowings under
TRAC lease.
Other expense, net decreased to a negative of approximately $11,100 in 2001
from $39,900 in 2000, resulting primarily from an increase in miscellaneous
income.
As a result of the above, loss before income taxes decreased 1.7% to $0.66
million, or 1.0% of revenues, in 2001 from a loss of $0.65 million, or 1.2% of
revenues, in 2000.
The Company's effective tax rate decreased to 38.9% in 2001 from 39.2% in
2000. 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 loss increased 2.7% to $0.40
million, or 0.5% of revenues, for the first quarter of 2001 from $0.39 million,
or 0.7% of revenues, for the first quarter of 2000. Net loss per share of $.04
for the first quarter of 2001 was unchanged from the same quarter of 2000. The
number of shares used in the calculation of diluted net income per share for the
first quarters of 2001 and 2000 were 9,232,087 and 9,288,976, respectively.
Total shares outstanding at March 31, 2001, were 9,230,388.
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SEASONALITY
In the motor carrier industry generally, revenues are lower in the first
and fourth quarters than in the second and third quarters, as customers decrease
shipments during the winter holiday season and as inclement weather impedes
operations. 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 depends upon the availability of diesel fuel,
and fuel shortages or increases in fuel taxes or fuel costs have adversely
affected, and may in the future adversely affect, the profitability of USA
Truck. Fuel prices have fluctuated widely and fuel taxes have generally
increased in recent years. The Company has not experienced difficulty in
maintaining necessary fuel supplies, and in the past the Company generally has
been able to partially offset significant increases in fuel costs and fuel taxes
from customers through increased freight rates and through a fuel surcharge
which increases incrementally as the price of fuel increases. Diesel prices
increased significantly during 2000 and were slightly lower when comparing the
average price per gallon for the first quarter of 2001 to the same quarter of
2000. There can be no assurance that diesel prices will continue to decline or
that they will remain below the higher prices experienced in prior periods.
There also can be no assurance that the Company will be able to recover any
future increases in fuel costs and fuel taxes through increased rates or fuel
surcharges. The Company does not participate in fuel price hedging activities.
LIQUIDITY & CAPITAL RESOURCES
On April 28, 2000, the Company signed a new senior credit facility (the
"Senior Credit Facility") that provides a working capital line of credit of
$60.0 million, including letters of credit not exceeding $5.0 million. The
Company repaid all amounts due under the General Line of Credit in the amount of
$36.1 million and subsequently terminated the General Line of Credit. Bank of
America, N.A. is the agent bank and SunTrust Bank and Firstar Bank, N.A. are
participants in the Senior Credit Facility. As of March 31, 2001, approximately
$16.5 million was available under the Senior Credit Facility. This credit
facility matures on April 28, 2005, 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 Senior Credit Facility bears variable interest based
on the lenders prime rate, or federal funds rate plus 1/2% or LIBOR plus a
certain percentage, which is determined based on the Company's ratio of total
funded debt to EBITDAR to determine the points to be added to the base LIBOR
rate. The effective interest rate on the Company's borrowings under the credit
facility for the quarter ending March 31, 2001 was 7.29%. A quarterly commitment
fee is payable on the unused credit line and bears a rate which is determined
based on the Company's ratio of total funded debt to EBITDAR to determine the
applicable rate. As of March 31, 2001 the rate was 0.3%. This credit facility is
collateralized by accounts receivable and all otherwise unencumbered equipment.
On March 30, 2001, the Company amended its Senior Credit Facility to modify the
covenants and more accurately align them with the Company's recent operating
performance resulting from the general economic conditions in the truckload
market. The Company modified its grid pricing which is based on its Total Funded
Debt to EBITDAR ratio. The amended applicable rate increments were increased
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slightly for certain Total Funded Debt to EBITDAR ratios. The Company does not
expect the increase in rates to have a significant impact on the Company's
financial statements.
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
General Line of Credit or Senior Credit Facility, conventional financing and
lease-purchase arrangements. The Company has generally met its working capital
needs with cash flows from operations and occasionally with borrowings under the
General Line of Credit or Senior Credit Facility. The Company has relied
significantly on the General Line of Credit or Senior Credit Facility to meet
working capital requirements since the acquisition of the assets of CCC Express.
The Company uses the Senior Credit Facility to minimize fluctuations in cash
flow needs and to provide flexibility in financing revenue equipment purchases.
Cash flows from operations were $4.7 million for the first quarter of 2001 and
$3.0 million for the first quarter of 2000.
The Company is a party to a lease commitment agreement (the "Equipment TRAC
Lease Commitment"), dated November 19, 1997, to facilitate the leasing of
tractors. The Equipment TRAC Lease Commitment was amended on October 12, 1999 to
provide for available borrowings of up to $6,000,000 available during the
remainder of 1999 and until October 12, 2000. Each capital lease under this
lease commitment has a repayment period of either 36 or 42 months. As of March
31, 2001, capital leases in the aggregate principal amount of $19.4 million were
outstanding under the Equipment TRAC Lease Commitment with an average interest
rate of 5.75% per annum. During the first quarter of 2001, the Company did not
enter into any capital leases under this facility.
As of March 31, 2001, capital leases in the aggregate principal amount of
$2.5 million were outstanding under a prior lease commitment with an average
interest rate of 5.29% per annum.
On January 11, 2000, the Company entered into a lease commitment agreement
(the "2000 TRAC Lease Commitment A"), to facilitate the leasing of tractors. The
2000 Equipment TRAC Lease Commitment A was amended on November 7, 2000 to
provide for a maximum borrowing amount of approximately $16.5 million. Each
capital lease will have a repayment period of 42 months. Borrowings are limited
based on the amounts outstanding under capital leases entered into under this
agreement. As of March 31, 2001, $8.7 million remained available under the 2000
Equipment TRAC Lease Commitment A. The interest rate on the capital leases under
this lease commitment fluctuates in relation to the interest rate for the three
year Treasury Note as published in The Wall Street Journal and is fixed upon
execution of each lease. As of March 31, 2001, capital leases in the aggregate
principal amount of $7.8 million were outstanding under this lease commitment
with an average interest rate of 6.63% per annum. During the first quarter of
2001, the Company did not enter into any capital leases under this lease
commitment.
On January 31, 2000, the Company entered into a lease commitment agreement
(the "2000 TRAC Lease Commitment B"), dated January 31, 2000, to facilitate the
leasing of tractors. The 2000 Equipment TRAC Lease Commitment B was amended on
October 18, 2000 to provide for a maximum borrowing amount of approximately
$19.6 million. Each capital lease will have a repayment period of either 36 or
42 months. Borrowings are limited based on the amounts outstanding under capital
leases entered into under this agreement. As of March 31, 2001, $12.3 million
remained available under the 2000 Equipment TRAC Lease Commitment B.
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The interest rate on the capital leases under this lease commitment fluctuates
in relation to the one year LIBOR as published in The Wall Street Journal and is
fixed upon execution of a lease. As of March 31, 2001, capital leases in the
aggregate principal amount of $7.3 million were outstanding under this lease
commitment with an average interest rate of 6.58% per annum. During the first
quarter of 2001, the Company did not enter into any capital leases under this
lease commitment.
As of March 31, 2001, the Company had debt obligations of approximately
$81.5 million, including amounts borrowed under the facilities described above,
of which approximately $11.0 million were current obligations. During the first
quarter of 2001, the Company made borrowings under the facilities described
above of $44.8 million, while retiring $41.8 million in debt. The retired debt
had an average interest rate of approximately 7.48%.
During the years 2001 and 2002, the Company plans to make approximately
$99.8 million in capital expenditures. At March 31, 2001, USA Truck was
committed to spend $40.8 million of this amount for revenue equipment in 2001,
and $52.7 million of this amount is currently budgeted for revenue equipment in
2002. The commitments to purchase revenue equipment are cancelable by the
Company if certain conditions are met. The balance of the expected capital
expenditures will be used for maintenance and office equipment and facility
improvements.
The Senior Credit Facility, the Equipment TRAC Lease Commitment A, the
Equipment TRAC Lease Commitment B, equipment leases and cash flows from
operations should be adequate to fund the Company's operations and expansion
plans through the end of 2001. There can be no assurance, however, that such
sources will be sufficient to fund Company 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, equipment leases, the Senior Credit Facility, the Equipment TRAC
Lease Commitment A, and the Equipment TRAC Lease Commitment B for the
foreseeable future.
On July 9, 1998, the Company's Board of Directors authorized the Company to
purchase up to 500,000 shares of its outstanding common stock over a three-year
period dependent upon market conditions. Common stock purchases under the
authorization may be made from time to time on the open market or in privately
negotiated transactions at prices determined by the Chairman of the Board or
President of the Company. As of March 31, 2001, the Company had purchased
261,200 shares pursuant to this new authorization at an aggregate purchase price
of $2.3 million and had resold 27,469 of these shares under the Company's
Employee Stock Purchase Plan. The Board of Directors has authorized the
retirement of 206,733 shares of treasury stock that had been purchased at an
aggregate cost of $1.8 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 Senior
Credit Facility.
NEW ACCOUNTING PRONOUNCEMENTS
In 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use. This statement provides guidance on the
capitalization of certain costs incurred in
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developing or acquiring internal-use computer software. This statement was
adopted in 1998 and did not have a significant impact on the Company's financial
statements.
In June, 1998, the Financial Accounting Standards Board issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. The Statement
has been amended by SFAS No. 137 and is effective for all quarters of fiscal
years beginning after June 15, 2000. It establishes accounting and reporting
standards requiring that every derivative instrument be recorded in the balance
sheet as either an asset or liability at its fair value. The Company adopted
SFAS No. 133, as amended by SFAS No. 137, on January 1, 2001. The adoption had
no effect on earnings or the financial position of the Company.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements and information that are
based on management's current beliefs and expectations and assumptions made by
it based upon information currently available. Forward-looking statements
include statements relating to the Company's plans, strategies, objectives,
expectations, intentions, and adequacy of resources, may be identified by words
such as "will", "could", "should", "believe", "expect", "intend", "plan",
"schedule", "estimate", "project" and similar expressions. These statements are
based on current expectations and are subject to uncertainty and change.
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 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. In addition, shortages of
qualified drivers and intense or increased competition for drivers may adversely
impact the Company's operating results and its ability to grow. Results for any
specific period could also be affected by various unforeseen events, such as
unusual levels of equipment failure or vehicle accident claims.
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14
FORM 10-Q
USA TRUCK, INC.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company's Senior Credit Facility agreement provides for borrowings that
bear interest at variable rates based on either a prime rate or the LIBOR. At
March 31 2001, the Company had $42.2 million outstanding pursuant to the Senior
Credit Facility. The Company believes that the effect, if any, of reasonably
possible near-term changes in interest rates on the Company's financial
position, results of operations, and cash flows should not be material.
As reported in the notes to the financial statements in the Liquidity and
Capital Resources section of this Form 10-Q, as of April 28, 2000, the Company
entered into the Senior Credit Facility with a multibank group. All amounts due
under the General Line of Credit were repaid at that time and the facility was
closed. The Senior Credit Facility agreement provides for borrowings that bear
interest at variable rates based on either a prime rate or the LIBOR. At April
17, 2001, the Company had $38.0 million outstanding pursuant to the Senior
Credit Facility. The Company believes that the effect, if any, of reasonably
possible near-term changes in interest rates on the Company's financial
position, results of operations, and cash flows should not be material.
All customers are required to pay for the Company's services in U.S.
dollars. Although the Canadian Government makes certain payments, such as tax
refunds, to the Company in Canadian dollars, any foreign currency exchange risk
associated with such payments is insignificant.
The Company does not engage in hedging transactions relating to diesel fuel
or any other commodity.
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FORM 10-Q
USA TRUCK, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(A) Exhibits
10.1 Bank of America First Amendment to Loan Agreement
11.1 Statement Re: Computation of Earnings Per Share
(B) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
three months ended March 31, 2001.
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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: April 25, 2001 /s/ ROBERT M. POWELL
--------------------------- -------------------------------------
ROBERT M. POWELL
Chairman, President and
Chief Executive Officer
Date: April 25, 2001 /s/ JERRY D. ORLER
--------------------------- -------------------------------------
JERRY D. ORLER
Vice President-Finance and
Chief Financial Officer
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FORM 10-Q
INDEX TO EXHIBITS
USA TRUCK, INC.
Exhibit
Number Exhibit
-------- -------
10.1 Bank of America First Amendment to Loan Agreement
11.1 Statement Re: Computation of Earnings Per Share
Page 17