Truckload carrier USA Truck rejected merger talks with larger rival Celadon Group despite falling back into the red with a $4.3 million third-quarter loss.
The $386.9 million carrier’s quarterly revenue rose only 1.9 percent from a year ago to $102 million, compared with a 14.3 percent sales surge in the second quarter. USA Truck blamed softer than expected freight volumes and the cost of transitioning to a new operating system for its return to a net loss in the third quarter.
The Van Buren, Ark., company also said it had trouble finding drivers, which led to “a persistently high number of unmanned tractors” during the third quarter. About 10 percent of USA Truck’s tractors were empty in the third quarter, the company said, without improvement in the first two weeks of October.
Celadon bought a 6.3 percent share of USA Truck for $4.7 million Oct. 11, and asked to meet with the carrier’s board of directors. The board declined the offer
Instead, USA Truck will focus on “operational improvements” under a restructured management team, the company said in its third-quarter earnings report. The carrier has streamlined management over the past two quarters, cutting four top executive jobs and eliminating its corporate strategy department.
David B. Hartline, who joined the company as chief operating officer for trucking in August, took responsibility for all trucking-related sales, pricing and operations in October.
The third-quarter loss followed a return to profitability in the previous quarter, when USA Truck appeared to be regaining traction it lost in the recession. The company is trying to turn the situation around, increasing its business with core customers in a denser network of regional freight lanes and raising rates.
“We have addressed a number of the underlying problems, but we still have work to do to achieve sustained profitability,” said President and CEO Cliff Beckham.
Tractor utilization dropped 13.2 percent in the third quarter and empty miles traveled increased 12.4 percent year-over-year, the company said. Truckload yield, however, measured by average revenue per tractor per week, increased 7.2 percent from a year ago, a sign of higher rates and fuel surcharges.