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1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
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)
3200 INDUSTRIAL PARK ROAD 72956
VAN BUREN, ARKANSAS (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (501) 471-2500
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of class)
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
The aggregate market value of the voting stock held by nonaffiliates of
the Registrant on March 7, 2001 was $24,957,531 (The characterization of
officers and directors of the Registrant as affiliates for purposes of this
computation should not be construed as an admission for any other purpose that
any such person is in fact an affiliate of the Registrant).
The number of shares outstanding of the Registrant's Common Stock, par
value $ .01, as of March 7, 2001 is 9,225,286.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K into Which the
Document Document is Incorporated
-------- --------------------------------
Portions of the Proxy Statement to be sent to stockholders Part III
in connection with 2001 Annual Meeting
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USA TRUCK, INC.
TABLE OF CONTENTS
ITEM NO. CAPTION PAGE
- -------- ------- ----
PART I
1. Business................................................................................. 1
2. Properties............................................................................... 6
3. Legal Proceedings........................................................................ 7
4. Submission of Matters to a Vote of Security Holders...................................... 7
PART II
5. Market for Registrant's Common Equity and Related Stockholder Matters.................... 8
6. Selected Financial Data.................................................................. 9
7. Management's Discussion and Analysis of Financial Condition and Results of Operations.... 10
7A. Quantitative and Qualitative Disclosure about Market Risk................................ 16
8. Financial Statements and Supplementary Data.............................................. 17
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..... 33
PART III
10. Directors and Executive Officers of the Registrant....................................... 33
11. Executive Compensation................................................................... 33
12. Security Ownership of Certain Beneficial Owners and Management........................... 33
13. Certain Relationships and Related Transactions........................................... 33
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.......................... 34
Signatures............................................................................... 41
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PART I
ITEM 1. BUSINESS
GENERAL
USA Truck, Inc. (the "Company" or "USA Truck") is engaged in the
transportation of general commodity freight in interstate and foreign commerce.
Operations are conducted primarily east of the Rocky Mountains, but the Company
holds authority to transport and does transport freight between all points in
the continental United States, other than intrastate, and between all points in
the U.S., on the one hand, and the Canadian provinces of Ontario and Quebec, on
the other. The Company also provides the U.S. and Canadian portions of shipments
between points in the U.S. and Canadian provinces of Ontario and Quebec, on the
one hand, and points in Mexico, on the other. The Company transfers freight to,
or receives freight from, Mexican carriers at the U.S.-Mexico border in Laredo,
Texas. Revenue from foreign countries represents less than 6% of total revenues
of the Company for each of the past three years. The principal types of freight
transported include automotive parts and materials, tires, paper and paper
products, glass, retail store merchandise, chemicals, aluminum and manufacturing
materials and supplies. USA Truck does not transport Class A or Class B
explosives, garbage, radioactive materials or hazardous wastes.
USA Truck transports freight in truckload quantities from individual
shippers to single or multiple destinations on an as-needed basis. Its business
consists primarily of medium haul shipments, more than 700 but less than 1,000
miles. For 1998, 1999, and 2000, the average length of haul for Company tractors
was 916 miles, 908 miles, and 871 miles, respectively.
The Company's principal offices are located at 3200 Industrial Park
Road, Van Buren, Arkansas 72956, and its telephone number is (501) 471-2500.
BUSINESS STRATEGY
USA Truck's principal competitive strength is its ability and
commitment to consistently provide superior service to shippers. Although price
is a primary concern to all shippers, many of the Company's customers are
high-volume shippers that require a flexible and dependable source of motor
carrier service tailored to specific needs, including pickup or delivery within
narrow time windows. The Company's strategy is to provide a premium service to
meet these needs and to charge compensating rates for such service. This
approach has found increasing acceptance. See "Business -- Competition".
The Company is committed to prompt freight pickup, consistent on-time
delivery, and twenty-four hours a day, seven days a week dispatching. It has
taken a number of steps to meet these commitments. In particular, the Company
(i) adheres to strict maintenance and cleaning schedules to avoid breakdowns and
delays; (ii) provides detailed routing instructions for, and maintains satellite
communications with, drivers to expedite delivery; (iii) maintains trailer pools
at strategic locations to minimize the time between customer order and pickup;
and (iv) provides extra trailers to high volume shippers for loading and
unloading at their convenience.
USA Truck utilizes cost-efficient communications throughout its
operations. The Company provides EDI (electronic data interchange) arrangements
with several of its largest customers, providing them with access through their
computer systems to current information on the status of their shipments.
Beginning in the third quarter of 1997, the Company began installing two-way,
satellite based mobile messaging and position-locating equipment in all of its
tractors. This equipment is designed to fulfill customers' heightened need for
real-time transit information as well as provide the Company with an enhanced
and cost-effective method of communications between its drivers and its
operations personnel. The system provides fleet managers the ability to contact
drivers virtually anywhere in the Company's market area. These capabilities are
intended to shorten response time to customers, as well as to allow drivers
uninterrupted rest time while awaiting assignment. The installation of the
equipment was completed in the fourth quarter of 1997.
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The Company has designed its own management information software
systems, which it operates on a mainframe computer. This system became
operational during the second quarter of 1997, when the Company's software was
migrated to its mainframe computer. Prior to that, the Company used a mainframe
computer through a contractual agreement with a third party. The Company has
also designed its own e-commerce software systems, which operate on several
platforms and connect to the Company's mainframe computer and the internet.
Through this expanded business-to-business ("B2B") system, USA Truck's customers
can check equipment availability and track the progress of their loads through
the Company's web site. Although the Company prefers direct relationships with
its shippers, marketing activity through third party logistics ("3PL") providers
is encouraged. Many of these 3PL providers offer daily load posting which is
conducted through e-commerce.
These communication and data processing capabilities enhance operating
efficiency by providing immediate access to detailed information concerning
equipment, cargo, customer locations, credit history, billing arrangements and
specific customer requirements. They also permit the Company to respond quickly
and accurately to customers' requests and assist in balancing equipment
availability throughout its market area. Management believes these information
software systems and computer hardware will be sufficient to support the
Company's expansion plans at least through 2002 without substantial additional
expenditures in the data processing area.
ACQUISITION
On November 1, 1999, pursuant to an Asset Purchase Agreement (the
"Asset Purchase Agreement") dated October 31, 1999, the Company acquired
substantially all the assets of CARCO Carrier Corporation, an Arkansas
corporation, which operated under the name CCC Express, Inc. ("CCC"), for a
purchase price of $35.3 million. The purchase price, which was subject to
certain post-closing adjustments, consisted of (i) a cash payment of
approximately $3.0 million; (ii) the assumption of approximately $6.5 million of
liabilities including equipment notes held by Bank Boston, Mellon U.S. Leasing
and Banc of America Leasing & Capital LLC and (iii) the refinancing with Banc
One Leasing Corporation and Deposit Guaranty National Bank of approximately
$25.8 million in other debt secured by equipment. The cash portion of the
purchase price was paid with available cash and proceeds of borrowings under the
Company's credit facilities with Deposit Guaranty National Bank. The purchase
price was equal to the net book value of CCC on the closing date, as adjusted in
accordance with the Asset Purchase Agreement, plus $2.0 million.
The acquired operations include a fleet of 498 tractors and 1,103 dry
van trailers, which the Company has used in its truckload motor carrier
business. The acquisition equated to an increase of 43% in the tractor fleet of
the Company, which operated 1,149 tractors and 2,266 dry van trailers before the
transaction. As part of the transaction, the Company also assumed three leases
for dedicated shop and fuel facilities.
MARKETING AND SALES
The Company focuses its marketing efforts on customers with demanding
requirements and heavy shipping needs within the regions where the Company
operates. This permits the Company to concentrate available equipment in its
primary service area, enabling it to be more responsive to customer needs. USA
Truck's Marketing and Operations Departments have primary responsibility for
developing and implementing the Company's marketing strategy and retaining
customer accounts.
The Marketing Department solicits and responds to customer orders and
maintains close customer contact regarding service requirements and rates. A
high percentage of the Company's business is from repeat customers. For the year
ended December 31, 2000, at least 92% of USA Truck's operating revenues were
derived from customers that were customers of the Company prior to 2000.
USA Truck establishes rates through individual negotiations with
customers and through contracts tailored to the specific needs of shippers.
For the year ended December 31, 2000, the Company's ten largest
customers accounted for 31% of revenues and its three largest customers
accounted for approximately 15% of revenues, with more than 2,300 other
customers accounting for the balance. No customer accounted for more than 10% of
revenues.
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Customers are generally required to have credit approval before
dispatch. The Company bills customers at or shortly after pickup, and, for the
last three years, receivables collection has averaged approximately 33 days from
the billing date.
OPERATIONS
The Operations Department consists of two primary divisions: the Load
Coordinator Group and the Fleet Manager Group.
Load coordinators are responsible for efficiently matching available
equipment with customer needs, and they serve as the contact with customers'
receiving and shipping personnel. Load coordinators also have primary
responsibility for minimizing empty miles, and they work closely with the
Marketing Department to increase equipment utilization.
The average distance between loads as a percentage of total miles
(empty mile factor) is a standard measurement in the truckload industry. The
empty mile factor generally decreases as average length of haul and density of
trucks in an area increase. The Company's commitment to on-time pickup often
requires a tractor to travel farther to complete a pickup than it would have to
travel if the Company delayed the pickup until a tractor became available in the
area. USA Truck's empty mile factor was 9.16% for the year ended December 31,
2000.
Fleet managers supervise fleets of approximately 58 drivers each and
serve as the drivers' primary contact with the Company. Fleet managers monitor
the location of equipment and direct its movement in the most efficient and safe
manner practicable.
DRIVERS AND OTHER PERSONNEL
Driver recruitment and retention continue to be a challenge for the
Company. Recruiting drivers is difficult because Company standards are high and
because of declining enrollment in driving schools. Retention is difficult
because of wage and job fulfillment considerations. Driver turnover, especially
in the early months of employment, is a significant problem, and the competition
for qualified drivers is intense. Although USA Truck has experienced difficulty
with driver turnover, it has been able to attract and retain a sufficient number
of qualified drivers to support its operations. To attract and retain drivers,
the Company must continue to provide safe, attractive and comfortable equipment,
direct access to management, and competitive wages and benefits designed to
encourage longer-term employment.
Drivers' pay is calculated on the basis of miles driven and increases
with tenure. In 2000, drivers averaged 486 miles per workday. On October 1,
2000, the Company implemented a 16% driver pay increase. With this pay increase,
the Company eliminated incentive pay from its pay package except for drivers in
its dedicated services division. The incentives that were earned and eliminated
as of October 1, 2000 totaled approximately $492,000 and were paid in October,
2000. The incentives that were earned by the Company's dedicated services
drivers totaled approximately $130,000 for 2000. During 2000, the Company's
drivers earned wages and incentives averaging $.32 per mile.
As of December 31, 2000, USA Truck employed 2,155 persons, of which
1,667 were drivers, none of whom was represented by a collective bargaining
unit. In the opinion of management, the Company's relationship with its
employees is satisfactory.
SAFETY
USA Truck's safety program is designed to meet the Company's goal of an
accident-free working environment and to enforce governmental safety
regulations. The Company controls the maximum speed of its tractors with
electronic governing equipment, and all its tractors are equipped with anti-lock
braking systems.
The evaluation of safety records is one of several criteria used by USA
Truck to hire driver employees. Safe equipment handling techniques are an
important part of new driver training. The Company also conducts pre-employment,
random and post-accident drug testing in accordance with Department of
Transportation ("DOT") regulations.
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REVENUE EQUIPMENT AND MAINTENANCE
The Company's current policy is to replace most tractors within 42
months from the date of purchase, which permits the Company to maintain
substantial warranty coverage throughout the period of ownership. USA Truck
replaces its tractors and trailers based on various factors, including the used
equipment market, prevailing interest rates, technological improvements, fuel
efficiency and durability.
The following table shows the number and age of revenue equipment
operated by the Company at December 31, 2000:
Tractors Trailers
---------------------------------- --------------------------------------
Average Average
Model Months Months
Year Number in Service Number in Service
----- ------ ---------- ------ ----------
2001 289 4 100 3
2000 525 14 733 13
1999 329 26 346 24
1998 552 38 697 38
1997 43 47 299 50
1996 330 61
1995 615 72
1994 267 87
1993 and prior 13 133
----- -- ----- ----
Total 1,738 23 3,400 43
===== == ===== ====
At December 31, 2000, USA Truck operated 1,738 conventional sleeper
tractors and 3,400 van trailers. To simplify driver and mechanic training,
control the cost of spare parts and tire inventory and provide for a more
efficient vehicle maintenance program, the Company buys tractors and trailers
manufactured to its specifications. In deciding which equipment to buy, it
considers a number of factors, including safety, economy, resale value and
driver comfort. Most of the Company's tractors are equipped with Detroit Diesel
Series 60 12.7-liter engines, air-ride suspension, and anti-lock brakes. The
Company's equipment is maintained through a strict preventive maintenance
program designed to minimize equipment downtime and to enhance trade-in value.
Beginning with the November 1995 trailer purchases, the Company began
converting its trailer fleet from 48-foot long and 102 inches wide trailers to
53-foot long and 102 inches wide trailers. Because of this conversion process
and additional trailers required to serve Mexico, the Company's trailer to
tractor ratio was 2.0-to-1 at December 31, 2000. Management believes that a
2.0-to-1 ratio is ideal for the Company's operations, in that it promotes
efficiency and provides the flexibility needed to serve customer needs. As of
December 31, 2000, 2,848 of the 3,400 trailers in the Company's trailer fleet
were 53-foot models. All future purchases of trailers will be 53-foot models.
The Company is undertaking this conversion in order to meet its customers'
requirements and to continue to provide an efficient balance between trailer
capacity and weight and length limitations in the various states and Canada.
During 2000, the Company financed revenue equipment through, either its
collateralized, $40 million revolving credit agreement (the "General Line of
Credit") or its collateralized, $60 million revolving credit agreement (the
"Senior Credit Facility") and through lease-purchase arrangements. The Senior
Credit Facility was originated on April 28, 2000 and was used to pay off the
outstanding balance on the General Line of Credit, which was then terminated.
See "Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources". All of its revenue
equipment is pledged to secure its obligations under such financing
arrangements.
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REVENUE EQUIPMENT ACQUISITION PROGRAM
During 2001 and 2002, the Company plans to acquire 517 and 647 new
tractors and 224 and 360 new trailers, respectively. These acquisitions and the
disposals during the year will result in a net decrease of 18 and a net increase
of 252 tractors and net increases of 187 and 360 trailers, respectively. As of
February 16, 2001, contracts had been executed for the acquisition of all 517
tractors and 224 trailers to be acquired in 2001. Although these contracts fix
the price at which the Company may acquire this equipment, the Company has the
right in its discretion to decrease or increase the number of tractors or
trailers to be purchased during the year at agreed prices. If the terms of the
contracts are carried out, the Company could 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 that year 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. During the fourth quarter of 2000, the Company increased the
depreciation rate on its tractors, which resulted in a slightly increased charge
to net income for 2000. Provided the Company can secure better pricing, it will
attempt to limit these losses by obtaining direct sales which could yield prices
closer to book values on these tractors and reduce these contractual capital
losses. See "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources".
During 2000, the Company acquired 470 new tractors (a net increase of
20) and 453 new trailers (a net decrease of 125). The Company purchased 267
fewer new tractors and 197 fewer trailers in 2000 than anticipated in response
to the shortage of qualified drivers in the truckload industry.
INSURANCE
The primary risk areas in the motor carrier industry are cargo loss and
damage, personal injury, property damage and workers' compensation claims.
Management believes that its insurance coverages are sufficient in each of these
areas. The Company is qualified as a workers' compensation self-insurer in the
State of Arkansas, which is secured by a $200,000 letter of credit and in
Louisiana, which is secured by a $100,000 certificate of deposit. In June 1993,
the Company received authority to self-insure for cargo loss and damage claims
and up to $1.0 million per occurrence for bodily injury and property damage
("BIPD") claims. These self-insurance arrangements are secured by $1.01 million
in letters of credit with the Federal Highway Administration. During 2000, the
self-insurance retention levels were $1.0 million for BIPD and $500,000 for
workers' compensation claims per occurrence. The Company has insurance coverage
for cargo loss and damage claims exceeding $100,000 per occurrence and coverage
for physical damage to its tractors and trailers with a self-insurance level of
$10,000 per occurrence. The Company has excess general liability coverage in
amounts substantially exceeding minimum legal requirements and believed to be
sufficient to protect the Company against material loss.
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 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
recover most of the increases in fuel costs and fuel taxes from customers
through increased freight rates. Diesel prices increased during 2000, and there
can be no assurance that diesel prices will decrease to price levels experienced
in recent 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.
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COMPETITION
The trucking industry is highly competitive. It is characterized by
ease of entry and by many small carriers having revenues of less than $1 million
per year, with relatively few carriers being able to achieve revenues exceeding
$100 million per year. The principal means of competition in the truckload
segment of the industry are service and price, with rate discounting being
particularly intense during economic downturns. Although the Company competes
primarily on the basis of service rather than rates, rate discounting continues
to be a factor in obtaining and retaining business. Although the number of firms
competing in the truckload segment has increased dramatically since industry
deregulation in 1980, the industry continues to undergo a consolidation phase.
Furthermore, a depressed economy tends to increase both price and service
competition from alternative modes such as less-than-truckload carriers and
railroads. Management believes that further growth in the truckload segment of
the industry is likely to be achieved by acquiring greater market share rather
than through an increase in the size of the market.
USA Truck competes primarily with other truckload carriers and
shipper-owned fleets and, to a lesser extent, with railroads and
less-than-truckload carriers. A number of truckload carriers have much greater
financial resources, own more revenue equipment and carry a larger volume of
freight than does the Company.
The Company also competes with truckload and less-than-truckload
carriers for qualified drivers. See "Business -- Drivers and Other Personnel".
TRADEMARK
USA Truck's name and logo are registered with the United States Patent
and Trademark Office, the Canadian Trade Marks Office, and the Mexican
Industrial Property Institute. During 2000, the Company registered its trademark
for its logistics division with the United States Patent and Trademark Office.
The Company believes its trademarks have significant value and are important to
its marketing efforts. The trademark registration in each country is renewable
indefinitely at the option of the Company.
REGULATION
USA Truck is a motor carrier regulated by the DOT and other federal and
state agencies. The Company's business activities in the United States are
subject to broad federal, state and local laws and regulations beyond those
applicable to most business activities. These regulated business activities
include, among other things, service area, routes traveled, equipment
specifications, commodities transported, rates and charges, accounting systems,
financial reporting and insurance coverages. The Company's Canadian business
activities are subject to similar requirements imposed by the laws and
regulations of the Dominion of Canada and provincial laws and regulations.
Motor carrier operations are subject to safety requirements prescribed
by the DOT, governing interstate operation, and by Canadian provincial
authorities. Matters such as weight and equipment dimensions are also subject to
federal, state, and provincial regulations.
The Company is subject to federal, state, provincial, and local
environmental laws and regulations. Management believes that the Company is in
substantial compliance with such laws and regulations and that costs of such
compliance will not have a material adverse effect on its competitive position,
operations or financial condition or require a material increase in currently
anticipated capital expenditures.
ITEM 2. PROPERTIES
The Company owns its headquarters in Van Buren, Arkansas, located on 63
acres. This site has approximately 84,000-square feet of office, training, and
driver housing space within two structures, a 12,000-square foot maintenance
facility and a 2,500-square foot dock. In the second quarter of 1997, the
Company completed construction of a new 57,000-square foot corporate
headquarters next to its existing headquarters facility in Van Buren, Arkansas.
The previously existing 27,000-square foot facility has been partially
refurbished and will continue to be refurbished over the next several years to
house additional training, maintenance and support services. This facility also
contains aboveground fuel tanks with a capacity of 40,000 gallons.
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The Company operates a maintenance and driver facility in West Memphis,
Arkansas, situated on roughly 32 acres with 29 acres of paved tractor and
trailer parking behind fence, a 17,200-square foot shop, an eight-lane drive
through fueling station containing aboveground fuel tanks with a capacity of
37,000 gallons and drivers' sleeping quarters that can house 36 drivers. During
1998, the Company expanded the shop by 7,200 square feet and added four
additional lanes to its drive through fueling station. The drivers' quarters
also include a recruiting office and driver training center for new drivers. The
Company owns 29 of the 32 acres and leases the remainder under a long-term lease
agreement with an initial term ending in November 2044. Located at the
intersection of I-40 and I-55, this facility is an ideal location for these
activities.
In August 1995, the Company completed construction of and began
operating its maintenance and driver facility in Shreveport, Louisiana, with 15
acres of paved tractor and trailer parking behind fence, a 12,000-square foot
shop, a two-lane drive through fueling station containing aboveground fuel tanks
with a capacity of 37,000 gallons and drivers' sleeping quarters that can house
32 drivers. The drivers' quarters also include a recruiting office and driver
training center for new drivers. The facility is located on 20 acres of land
owned by the Company near I-20 on US Hwy. 80 and is strategically located near
several major customers in the area.
In June 1996, USA Truck began operating its maintenance and driver
facility in Vandalia, Ohio, with approximately eight acres of paved tractor and
trailer parking behind fence, a 2,400-square foot shop, a one-lane drive through
fueling station containing a below-ground fuel tank with a capacity of 10,000
gallons and drivers' sleeping quarters that can house 22 drivers. The drivers'
quarters also include a sales and recruiting office. The Company owned facility
is located near I-75 & I-70 and is strategically located for these activities.
The Company plans to purchase property near this current facility, which will
allow the Company to build a new maintenance facility and expand its ability to
service its equipment and house drivers at this location.
The Company leases, on a month-to-month basis, shop and office
facilities in East Peoria and Blue Island, Illinois and New Paris, Indiana.
With the exception of the Vandalia, Ohio facility mentioned above,
management believes that its facilities will be sufficient for its operations at
least through 2001.
See "Item 1. Business -- Revenue Equipment and Maintenance" and "Item
1. Business -- Revenue Equipment Acquisition Program" for information regarding
the Company's revenue equipment.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to routine litigation incidental to its
business, primarily involving claims for personal injury and property damage
incurred in the transportation of freight. It maintains insurance covering
liabilities resulting from personal injury and property damage claims.
Management believes that adverse results in one or more of these cases would not
have a material adverse effect on the financial position or results of
operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matter to a vote of security holders
during the fourth quarter of the fiscal year covered by this Annual Report.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's Common Stock trades on The NASDAQ Stock Market under the
symbol: USAK. The following table sets forth the high and low closing sales
prices for the Company's Common Stock as reported by The NASDAQ Stock Market for
2000 and 1999.
2000 HIGH LOW
- ---- ---- ---
First Quarter.............................................. $8.81 $7.25
Second Quarter............................................. $7.94 $5.38
Third Quarter.............................................. $7.19 $5.38
Fourth Quarter............................................. $6.50 $5.19
1999 HIGH LOW
- ---- ---- ---
First Quarter ............................................. $10.44 $10.19
Second Quarter............................................. $ 9.38 $ 9.16
Third Quarter.............................................. $ 9.25 $ 8.88
Fourth Quarter............................................. $ 8.13 $ 7.75
As of March 7, 2001, there were 240 holders of record (including
brokerage firms and other nominees) of the Company's Common Stock. The Company
estimates that there were approximately 1,940 beneficial owners of the Common
Stock as of that date.
The Company has never paid a cash dividend on its Common Stock. It is
the current intention of the Company's Board of Directors to continue to retain
earnings to finance the growth of the Company rather than to pay cash dividends.
Any future payments of cash dividends will depend upon the financial condition,
results of operations and capital commitments of the Company as well as other
factors deemed relevant by the Board of Directors. Covenants contained in the
Company's Senior Credit Facility may limit the Company's ability to pay
dividends.
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ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth, for the periods and at the dates
indicated, selected financial data of the Company. The data should be read in
conjunction with the financial statements and related notes contained in Item 8
of this Annual Report and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations".
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
2000 1999 1998 1997 1996
--------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
STATEMENT OF OPERATIONS DATA:
Operating revenues ................................. $ 226,585 $ 166,363 $ 145,216 $ 129,507 $ 108,313
Operating expenses and costs:
Salaries, wages and employee benefits ........... 91,454 70,198 61,297 53,122 45,122
Operations and maintenance ...................... 71,567 42,480 33,401 34,189 31,064
Operating taxes and licenses .................... 4,248 3,005 2,547 2,160 1,964
Insurance and claims ............................ 14,318 7,987 7,250 6,773 6,422
Communications and utilities .................... 2,802 2,000 1,469 1,828 1,612
Depreciation and amortization ................... 26,793 18,592 16,179 13,608 11,839
Other ........................................... 9,608 6,265 4,113 3,659 4,038
--------- --------- --------- --------- ---------
220,790 150,527 126,256 115,339 102,061
--------- --------- --------- --------- ---------
Operating income ................................... 5,795 15,836 18,960 14,168 6,252
Other expenses (income):
Interest expense ................................ 5,408 1,655 1,715 1,380 730
Loss (gain) on disposal of assets ............... 150 (9) (37) (2) (9)
Other, net ...................................... 82 (23) 102 (191) (4)
--------- --------- --------- --------- ---------
5,640 1,623 1,780 1,187 717
--------- --------- --------- --------- ---------
Income before income taxes ......................... 155 14,213 17,180 12,817 5,535
Income taxes ....................................... 61 5,571 6,683 5,078 2,153
--------- --------- --------- --------- ---------
Net Income ......................................... $ 94 $ 8,642 $ 10,497 $ 7,093 $ 3,382
========= ========= ========= ========= =========
Basic:
Net income per share ............................ $ .01 $ .93 $ 1.12 $ 0.84 $ 0.36
========= ========= ========= ========= =========
Average shares outstanding ...................... 9,254 9,324 9,400 9,356 9,463
========= ========= ========= ========= =========
Diluted:
Net income per share ............................ $ .01 $ .92 $ 1.11 $ 0.83 $ 0.35
========= ========= ========= ========= =========
Average shares outstanding ...................... 9,260 9,354 9,466 9,485 9,620
========= ========= ========= ========= =========
Cash dividends per share ........................... -- -- -- -- --
BALANCE SHEET DATA (AT END OF YEAR):
Current assets ..................................... $ 41,739 $ 39,449 $ 20,459 $ 20,292 $ 16,825
Current liabilities ................................ 30,357 28,277 21,151 20,762 15,193
Total assets ....................................... 189,919 182,040 119,611 113,518 86,330
Long-term debt, less current maturities ............ 65,660 64,453 19,058 27,057 15,867
Stockholders' equity ............................... 69,981 70,108 62,734 52,373 44,424
9
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ITEM 7. 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 years indicated:
YEAR ENDED DECEMBER 31,
-----------------------------
2000 1999 1998
------ ------ ------
Operating revenues................................... 100.0% 100.0% 100.0%
Operating expenses and costs:
Salaries, wages and employee benefits............ 40.4 42.2 42.2
Operations and maintenance....................... 31.6 25.5 23.0
Operating taxes and licenses..................... 1.9 1.8 1.8
Insurance and claims............................. 6.3 4.8 5.0
Communications and utilities..................... 1.2 1.2 1.0
Depreciation and amortization.................... 11.8 11.2 11.1
Other............................................ 4.2 3.8 2.8
----- ----- -----
97.4 90.5 86.9
----- ----- -----
Operating income..................................... 2.6 9.5 13.1
Other expenses (income):
Interest expense................................. 2.4 1.0 1.2
Loss on disposal of assets....................... 0.1 -- --
Other, net....................................... -- -- 0.1
----- ----- -----
2.5 1.0 1.3
----- ----- -----
Income before income taxes........................... 0.1 8.5 11.8
Income tax expense................................... -- 3.3 4.6
----- ----- -----
Net income........................................... 0.1% 5.2% 7.2%
===== ===== =====
RESULTS OF OPERATIONS
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999
Operating revenues increased 36.2% to $226.6 million in 2000 from
$166.4 million in 1999 , resulting from increased business with existing
customers, additional business from new customers and the acquisition of CCC
Express on November 1, 1999. Average revenue per mile increased to $1.18 in 2000
from $1.13 in 1999. The empty mile factor decreased to 9.16% of paid miles in
2000 from 9.26% of paid miles in 1999. There was a 35.3% increase in the number
of shipments to 199,611 in 2000 from 147,484 in 1999. This volume improvement
was made possible by an increase of 42.4% in the average number of tractors
operated during 1999 from 1,223 to 1,740 during 2000. The net effect of the
volume increase and the Company's continuing fleet expansion was a decrease of
8.9% in miles per tractor per week from 2,404 in 1999 to 2,190 in 2000.
Operating expenses and costs as a percentage of revenues rose to 97.4%
in 2000 from 90.5% in 1999. This change resulted primarily from an increase, on
a percent of revenue basis, in operations and maintenance cost, insurance and
claims cost, depreciation and amortization expense and other expenses. These
increases were partially offset by a decrease, on a percent of revenue basis, in
salaries, wages and employee benefits. The percentage increase, relative to
revenues, in operations and maintenance cost was primarily the result of a an
increase of 33.2 cents per gallon in the average cost of fuel in 2000 compared
to 1999, combined with a decrease in fuel efficiency to 6.31 average miles per
gallon in 2000 from 6.46 in 1999. The increase in insurance and claims cost, as
a percentage of revenue and in actual dollars, resulted from an increase in the
number of accidents during 2000 compared to 1999. The increase in depreciation
and amortization expense, as a percent of revenue, resulted from a decline in
tractor utilization from 1999 to 2000, as mentioned above. The increase in other
expenses, as a percentage of revenue, resulted primarily from higher recruiting
and training costs brought about by a higher driver turnover rate and increased
competition for drivers. The percentage decrease, relative to salaries, wages
and employee benefits expense for 2000 compared to 1999 was due to the reduction
in management and executive incentives for 2000, which are based on the
profitability of the Company, the effects of fuel surcharges and the elimination
of a substantial portion of drivers' incentives earned during the fourth quarter
of 2000 which resulted
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from a change in the drivers' pay package, except for drivers in the Company's
dedicated services division, that eliminated incentive pay and overall,
increased mileage based pay by 16%. Because salaries, wages and employee
benefits expense consumes a larger portion of revenue than do other expenses, it
is affected to a larger extent by the fuel surcharges included in revenue rate
increases.
As a result of the foregoing factors, operating income decreased 63.4%
to $5.8 million, or 2.6% of revenue, in 2000 from $15.8 million or, 9.5% of
revenues, in 1999.
Interest expense increased to $5.41 million from $1.65 million in 1999,
resulting primarily from a substantial increase in borrowings following the
acquisition of CCC Express on November 1, 1999.
The Company had other expense, net of $83,000 during 2000 compared to
other income, net of $23,000 in 1999. This increase in other expense, net was
due to a variety of factors, no single one of which accounted for more than half
of the increase.
As a result of the above factors, income before taxes decreased to
$155,000, or 0.1% of revenues, in 2000 from $14.2 million, or 8.5% of revenues,
in 1999.
The Company's effective tax rate was 39.2% in 2000 and 1999. 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 to
$94,000, or 0.1% of revenues, in 2000 from $8.6 million, or 5.2% of revenues in
1999, representing a decrease in diluted net income per share to $.01 from $.92.
The number of shares used in the calculation of diluted net income per share for
2000 and 1999 were 9,260,011 and 9,354,441.
The principal means of competition in the truckload segment of the
industry are service and rates, with rate discounting being particularly intense
during economic downturns in order to maintain desired revenue levels. Although
the Company competes primarily on the basis of its service provided to its
customers rather than rates charged, rate discounting continues to be a factor
in obtaining and retaining business. The number of firms competing in the
truckload segment of the industry has increased dramatically since the
deregulation of the industry in 1980. Also, a depressed economy tends to
increase the competitive pressure placed on rate and service from alternative
modes of transportation such as less-than-truckload and railroads. The Company's
management believes that the truckload segment of the market has reached a
certain level of maturity as the market exists currently and that the Company's
further growth in the truckload segment of the industry is likely to be attained
by increasing its market share rather than through an increase in the overall
size of the market.
The Company experienced higher driver turnover and a reduction in
equipment utilization as well as increased insurance costs in the first three
quarter of 2000 because of large number of students and inexperienced drivers
hired during this period. In order to combat this trend, the Company issued a
16% driver pay increase on October 1, 2000. With this pay increase, the Company
eliminated incentive pay from its pay package except for drivers in its
dedicated services division. This pay increase was implemented in order to
dramatically improve driver recruiting efforts by attracting more experienced
drivers than in the past and improve driver retention by offering a more
competitive pay package than most other companies in the truckload segment of
the industry. This pay raise will increase driver wages by approximately 3% of
revenue annually. Management has set goals for recruiting, retention, driver and
equipment utilization and claims cost to be achieved in order to recover this
additional wage cost. More experienced drivers will also help the Company
provide superior customer service.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998
Operating revenues increased 14.6% to $166.4 million in 1999 from
$145.2 million in 1998, resulting from increased business with existing
customers, additional business from new customers and the acquisition of CCC
Express on November 1, 1999. Average revenue per mile increased to $1.13 in 1999
from $1.12 in 1998. The empty mile factor decreased to 9.26% of paid miles in
1999 from 9.78% of paid miles in 1998. There was a 15.1% increase in the number
of shipments to 147,484 in 1999 from 128,179 in 1998. This volume improvement
was made possible by an increase of 15.6% in the average number of tractors
operated from 1,058 in 1998 to 1,223 in
11
14
1999. The net effect of the volume improvement and the Company's continuing
fleet expansion was a decrease of 1.5% in miles per tractor per week from 2,441
in 1998 to 2,404 in 1999.
Operating expenses and costs as a percentage of revenues rose to 90.5%
in 1999 from 86.9% in 1998. This change resulted primarily from an increase, on
a percent of revenue basis, in operations and maintenance cost, communications
and utilities, and other expenses. These increases were partially offset by a
decrease, on a percent of revenue basis, in insurance and claims. The percentage
increase, relative to revenues, in operations and maintenance cost was primarily
the result of an increase of 10 cents per gallon in the average cost of fuel in
1999 compared to 1998, offset by an increase in fuel efficiency to 6.46 average
miles per gallon in 1999 from 6.41 in 1998. The increase in communications and
utilities expense, as a percentage of revenue and in actual dollars, reflects
the usage credits issued with the purchase of Qualcomm units in 1997 being used
to reduce rates in 1998. The increase in other expenses, as a percentage of
revenue, resulted primarily from higher recruiting costs brought about by a
higher driver turnover rate and increased competition for drivers. The
percentage decrease, relative to revenues, in insurance and claims expense was
due to a decrease in the number and severity of accidents in 1999 compared to
1998.
As a result of the foregoing factors, operating income decreased 16.5%
to $15.8 million, or 9.5% of revenue, in 1999 from $19.0 million or, 13.1% of
revenues, in 1998.
Interest expense decreased 3.5% to $1.65 million from $1.72 million in
1998, resulting primarily from reduction in borrowings for most of the year
offset by a substantial increase in borrowings following the acquisition of CCC
Express on November 1, 1999.
The Company had other income, net of $23,000 during 1999 compared to
other expense, net of $102,000 in 1998. This increase in other income, net was
due to a variety of factors, no single one of which accounted for more than half
of the increase.
As a result of the above factors, income before taxes decreased 17.3%
to $14.2 million, or 8.5% of revenues, in 1999 from $17.2 million, or 11.8% of
revenues, in 1998.
The Company's effective tax rate increased to 39.2% in 1999 from 38.9%
in 1998. 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 17.7%
to $8.6 million, or 5.2% of revenues, in 1999 from $10.5 million, or 7.2% of
revenues in 1998, representing a decrease of 17.1% in diluted net income per
share to $.92 from $1.11. The number of shares used in the calculation of
diluted net income per share for 1999 and 1998 were 9,354,441 and 9,465,971.
INFLATION
The effect of inflation on operating costs has been minimal in recent
years. Most of the Company's operating expenses are inflation sensitive, with
increases in inflation generally resulting in increased operating costs and
expenses. The effect of inflation-driven cost increases on the Company's overall
operating costs would not be expected to be greater for the Company than for its
competitors.
SEASONALITY
In the trucking industry generally, revenues decrease as customers
reduce shipments during the winter holiday season and as inclement weather
impedes operations. At the same time, operating expenses increase, due primarily
to decreased fuel efficiency and increased maintenance costs. Future revenues
could be impacted if customers reduce shipments due to temporary plant closings,
which historically have occurred during July and December.
12
15
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 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
recover most of the increases in fuel costs and fuel taxes from customers
through increased freight rates. Diesel prices increased during 2000 and there
can be no assurance when diesel prices will decrease to price levels experienced
in recent 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.
OPERATIONAL DATA
The following table sets forth certain operational information for the
last three fiscal years:
YEAR ENDED DECEMBER 31,
--------------------------------------
2000 1999 1998
---- ---- ----
Total loads moved during the year......................... 199,611 147,484 128,179
Average number of tractors operated during the year....... 1,740 1,223 1,058
Number of tractors operated at year end................... 1,738 1,713 1,132
Number of trailers operated at year end................... 3,400 3,524 2,004
Total tractor miles during the year....................... 220,210,709 169,587,327 148,590,937
LIQUIDITY AND 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 December 31, 2000,
approximately $23.9 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 attainment of
certain financial ratios. The effective interest rate on the Company's
borrowings under the credit facility for the year ending December 31, 2000 was
7.92%. A quarterly commitment fee is payable on the unused credit line and bears
a rate which is determined based on the Company's attainment of certain
financial ratios. As of December 31, 2000 the rate was 1/5%. This credit
facility is collateralized by accounts receivable and all otherwise unencumbered
equipment. See Note 5 to the 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 $29.2 million for 2000 and $13.6 million for
1999.
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
December 31, 2000, capital leases in the aggregate principal amount of $20.5
million were outstanding under the Equipment TRAC Lease Commitment with an
average interest rate of
13
16
5.75% per annum. During 2000, the Company entered into capital leases under this
facility in the amount of $3.1 million.
As of December 31, 2000, capital leases in the aggregate principal
amount of $4.6 million were outstanding under a prior lease commitment with an
average interest rate of 5.26% 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 December 31, 2000, $8.3 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 December 31, 2000, capital leases in
the aggregate principal amount of $8.2 million were outstanding under this lease
commitment with an average interest rate of 6.63% per annum. During, 2000, the
Company entered into capital leases under this lease commitment in the amount of
$9.1 million.
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 December 31, 2000,
$12.0 million remained available under the 2000 Equipment TRAC Lease Commitment
B. 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 December 31, 2000, capital
leases in the aggregate principal amount of $7.6 million were outstanding under
this lease commitment with an average interest rate of 6.58% per annum. During
2000, the Company entered into capital leases under this lease commitment in the
amount of $8.3 million.
As of December 31, 2000, the Company had debt obligations of
approximately $78.5 million, including amounts borrowed under the facilities
described above, of which approximately $12.9 million were current obligations.
During 2000, the Company made borrowings under the facilities described above of
$89.6 million, while retiring $106.9 million in debt. The retired debt had an
average interest rate of approximately 6.98%.
During the years 2001 and 2002, the Company plans to make approximately
$99.9 million in capital expenditures. At December 31, 2000, USA Truck was
committed to spend $41.0 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, the Equipment TRAC Lease Commitment Board 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 and President of the Company. This new authorization became effective in
September 1998 upon the expiration of the Company's existing stock repurchase
program. On May 5, 1999, the Board of Directors authorized the retirement of
100,000 shares of treasury stock that
14
17
had been purchased at an aggregate cost of $.9 million. On May 3, 2000, the
Board of Directors authorized the retirement of 106,733 shares of treasury stock
that had been purchased at an aggregate cost of $.9 million. As of December 31,
2000, the Company had purchased 289,800 shares pursuant to this new
authorization at an aggregate purchase price of $2,475,000. In addition, as of
December 31, 2000, 23,232 of the remaining 131,600 repurchased shares had been
resold under the Company's Employee Stock Purchase Plan. 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 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 is
currently evaluating the requirements of SFAS No. 133 and does not anticipate
that the adoption will have a material 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 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 increases in diesel
prices, adverse weather conditions or driver turnover and the impact of
increased rate competition or competition for qualified drivers. 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 period
could also be affected by various unforeseen events, such as unusual levels of
equipment failure or accident claims.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company's Senior Credit Facility provides for borrowings which bear
interest at variable rates based on either a prime rate, federal funds rate plus
1/2% or LIBOR plus a certain percentage which is determined based on the
Company's attainment of certain financial ratios. At December 31, 2000, the
Company had $34.9 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 Company 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.
16
19
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
USA TRUCK, INC.
ANNUAL REPORT ON FORM 10-K
YEAR ENDED DECEMBER 31, 2000
INDEX TO FINANCIAL STATEMENTS
Page
Report of Ernst & Young LLP, Independent Auditors ...................................................... 18
Balance Sheets as of December 31, 2000 and 1999......................................................... 19
Statements of Income for the years ended December 31, 2000, 1999 and 1998............................... 20
Statements of Stockholders' Equity for the years ended December 31, 2000, 1999 and 1998................. 21
Statements of Cash Flows for the years ended December 31, 2000, 1999 and 1998........................... 22
Notes to Financial Statements........................................................................... 23
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REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors and Stockholders
USA Truck, Inc.
We have audited the accompanying balance sheets of USA Truck, Inc. as of
December 31, 2000 and 1999, and the related statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended December
31, 2000. Our audits also included the financial statement schedule listed in
the Index at Item 14(a). These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of USA Truck, Inc. at December 31,
2000 and 1999, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
ERNST & YOUNG LLP
Little Rock, Arkansas
January 19, 2001
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USA TRUCK, INC.
BALANCE SHEETS
December 31,
------------------------------
2000 1999
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents ..................................... $ 1,674,730 $ 2,145,707
Receivables (Note 5):
Trade, less allowance for doubtful accounts of
$303,203 in 2000 and $269,150 in 1999 ..................... 30,019,565 26,649,235
Other ....................................................... 3,853,642 5,509,866
Inventories ................................................... 382,639 301,907
Deferred income taxes (Note 7) ................................ 1,607,633 1,208,413
Prepaid expenses and other current assets (Note 3) ............ 4,200,618 3,634,056
------------- -------------
Total current assets .............................................. 41,738,827 39,449,184
Property and equipment (Notes 5 and 6):
Land and structures ........................................... 18,519,687 16,798,699
Revenue equipment ............................................. 170,109,906 155,546,718
Service, office and other equipment ........................... 14,517,040 13,665,713
------------- -------------
203,146,633 186,011,130
Accumulated depreciation and amortization ..................... (55,417,751) (43,873,074)
------------- -------------
147,728,882 142,138,056
Other assets ...................................................... 451,115 452,448
------------- -------------
Total assets ...................................................... $ 189,918,824 $ 182,039,688
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank drafts payable ........................................... $ 1,487,086 $ 1,116,485
Trade accounts payable ........................................ 5,870,192 5,139,164
Accrued expenses (Note 4) ..................................... 10,131,717 11,065,604
Current maturities of long-term debt (Note 5) ................. 12,867,611 10,956,533
------------- -------------
Total current liabilities ......................................... 30,356,606 28,277,285
Long-term debt, less current maturities (Notes 5 and 6) ........... 65,660,268 64,452,648
Deferred income taxes (Note 7) .................................... 21,111,025 17,008,364
Insurance and claims accruals ..................................... 2,810,214 2,192,714
Commitments and contingencies (Notes 6 and 12)
Stockholders' equity (Notes 5 and 9):
Preferred Stock, $.01 par value; 1,000,000 shares
authorized; none issued ..................................... -- --
Common Stock, $.01 par value; 16,000,000 shares
authorized; issued 9,282,889 shares in 2000
and 9,387,041 shares in 1999 ................................ 92,829 93,870
Additional paid-in capital .................................... 11,318,279 12,271,685
Retained earnings ............................................. 58,934,889 58,840,827
Less treasury stock, at cost (59,835 shares in 2000 and
122,011 shares in 1999) ..................................... (365,286) (1,098,206)
------------- -------------
Total stockholders' equity ........................................ 69,980,711 70,108,176
------------- -------------
Total liabilities and stockholders' equity ........................ $ 189,918,824 $ 182,039,688
============= =============
See accompanying notes.
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22
USA TRUCK, INC.
STATEMENTS OF INCOME
Year Ended December 31,
-----------------------------------------------
2000 1999 1998
------------- ------------- -------------
Operating revenues .................................... $ 226,585,437 $ 166,363,356 $ 145,216,121
Operating expenses and costs:
Salaries, wages and employee benefits (Note 8) .... 91,453,590 70,197,581 61,296,860
Operations and maintenance ........................ 71,567,226 42,480,525 33,400,982
Operating taxes and licenses ...................... 4,248,497 3,005,166 2,547,449
Insurance and claims .............................. 14,318,596 7,987,208 7,249,853
Communications and utilities ...................... 2,802,007 1,999,548 1,468,485
Depreciation and amortization ..................... 26,792,923 18,591,780 16,179,143
Other ............................................. 9,607,679 6,264,876 4,113,158
------------- ------------- -------------
220,790,518 150,526,684 126,255,930
------------- ------------- -------------
Operating income ...................................... 5,794,919 15,836,672 18,960,191
Other expenses (income):
Interest expense .................................. 5,407,723 1,655,558 1,714,662
Loss (gain) on disposal of assets ................. 149,788 (9,297) (37,088)
Other, net ........................................ 82,702 (22,588) 102,340
------------- ------------- -------------
5,640,213 1,623,673 1,779,914
------------- ------------- -------------
Income before income taxes ............................ 154,706 14,212,999 17,180,277
Income tax (benefit) expense (Note 7):
Current ........................................... (3,642,795) 2,774,219 3,366,164
Deferred .......................................... 3,703,440 2,797,278 3,316,964
------------- ------------- -------------
60,645 5,571,497 6,683,128
------------- ------------- -------------
Net income ............................................ $ 94,061 $ 8,641,502 $ 10,497,149
============= ============= =============
Net income per share (Notes 9 and 10):
Basic earnings per share .......................... $ 0.01 $ 0.93 $ 1.12
============= ============= =============
Diluted earnings per share ........................ $ 0.01 $ 0.92 $ 1.11
============= ============= =============
See accompanying notes.
20
23
USA TRUCK, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
ADDITIONAL
COMMON PAID-IN RETAINED TREASURY
STOCK CAPITAL EARNINGS STOCK TOTAL
------------ ------------ ------------ ------------ ------------
Balance at January 1, 1998 .............. $ 93,749 $ 12,577,336 $ 39,702,176 $ -- $ 52,373,261
Exercise of stock options, net
(Note 10) ......................... 622 290,941 -- -- 291,563
Tax benefit of stock options
(Note 7) .......................... -- 53,065 -- -- 53,065
Purchases of 54,750 shares of
common stock into treasury ....... -- -- -- (585,962) (585,962)
Sale of 7,961 shares of treasury
stock to employee stock
purchase plan .................... -- -- -- 104,987 104,987
Net income for 1998 ................. -- -- 10,497,149 -- 10,497,149
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1998 ............ 94,371 12,921,342 50,199,325 (480,975) 62,734,063
Exercise of stock options, net
(Note 10) ......................... 499 278,219 -- -- 278,718
Purchase of 186,600 shares of
common stock into treasury ........ -- -- -- (1,662,883) (1,662,883)
Sale of 11,379 shares of treasury
stock to employee stock purchase
plan ............................. -- -- -- 116,776 116,776
Retirement of 100,000 shares
out of treasury stock ............ (1,000) (927,876) -- 928,876 --
Net income for 1999 ................. -- -- 8,641,502 -- 8,641,502
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1999 ............ 93,870 12,271,685 58,840,827 (1,098,206) 70,108,176
Exercise of stock options, net
(Note 10) ......................... 26 (21) -- -- 5
Purchase of 58,200 shares of
common stock into treasury ....... -- -- -- (350,344) (350,344)
Transfer of 13,643 shares of treasury
Stock to Employee Stock Purchase -- -- -- 128,813 128,813
Plan .............................
Retirement of 106,733 shares
out of treasury stock ........... (1,067) (953,384) -- 954,451 --
Net income for 2000 ................. -- -- 94,061 -- 94,061
------------ ------------ ------------ ------------ ------------
Balance at December 31, 2000 ............ $ 92,829 $ 11,318,280 $ 58,934,888 $ (365,286) $ 69,980,711
============ ============ ============ ============ ============
See accompanying notes.
21
24
USA TRUCK, INC.
STATEMENTS OF CASH FLOWS
Year Ended December 31,
--------------------------------------------
2000 1999 1998
------------ ------------ ------------
OPERATING ACTIVITIES
Net income ....................................................... $ 94,061 $ 8,641,502 $ 10,497,149
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization .............................. 26,792,923 18,591,780 16,179,143
Provision for doubtful accounts ............................ 82,200 121,900 30,000
Deferred income taxes ...................................... 3,703,441 2,797,278 3,316,964
Gain on disposal of assets ................................. 149,788 (9,297) (37,088)
Changes in operating assets and liabilities:
Receivables ............................................. (1,796,306) (17,186,596) (1,363,041)
Inventories, prepaid expenses and other
current assets ........................................ (647,294) (609,527) (1,103,891)
Bank drafts payable, trade accounts payable and
accrued expenses ...................................... 167,742 1,103,205 539,981
Insurance and claims accruals - long-term ............... 617,500 100,100 408,000
------------ ------------ ------------
Net cash provided by operating activities ........................ 29,164,055 13,550,345 28,467,217
INVESTING ACTIVITIES
Purchases of property and equipment .............................. (27,011,263) (29,492,589) (21,731,600)
Purchase of CCC Express, Inc. .................................... -- (22,891,055) --
Proceeds from sale of equipment .................................. 14,898,989 9,651,337 6,395,382
Proceeds from sale of investments ................................ -- 968,196 --
Decrease (increase) in other assets .............................. 1,333 (153,165) 31,150
------------ ------------ ------------
Net cash used by investing activities ............................ (12,110,941) (41,917,276) (15,305,068)
FINANCING ACTIVITIES
Borrowings under long-term debt .................................. 89,606,979 55,685,310 14,325,000
Proceeds from the exercise of stock options ...................... 5 278,718 291,563
Proceeds from sale of treasury stock ............................. 128,813 116,776 104,987
Refund of security deposits ...................................... -- 1,745,478 --
Payments to repurchase common stock .............................. (350,344) (1,662,883) (585,962)
Principal payments on long-term debt ............................. (93,689,979) (19,595,310) (22,800,000)
Principal payments on capitalized lease obligations .............. (13,219,565) (7,835,094) (6,385,405)
------------ ------------ ------------
Net cash (used by) provided by financing activities .............. (17,524,091) 28,732,995 (15,049,817)
------------ ------------ ------------
(Decrease) increase in cash and cash equivalents ................. (470,977) 366,064 (1,887,668)
Cash and cash equivalents:
Beginning of year ............................................ 2,145,707 1,779,643 3,667,311
------------ ------------ ------------
End of year .................................................. $ 1,674,730 $ 2,145,707 $ 1,779,643
============ ============ ============
See accompanying notes.
22
25
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
USA Truck, Inc. (the "Company"), operates as a truckload motor carrier with
operating authority to provide service throughout the continental United States
and parts of Canada and Mexico.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents. The carrying amount
reported in the balance sheet for cash and cash equivalents approximates its
fair value.
CONCENTRATION OF CREDIT RISK
The Company performs ongoing credit evaluations and generally does not require
collateral. The Company maintains reserves for potential credit losses. Such
losses have been within management's expectations.
One customer represented approximately 8% and 7% of net trade receivables as of
December 31, 2000 and 1999, respectively. The same customer represented
approximately 6% and 6% of revenues for the years ended December 31, 2000 and
1999, respectively.
INVENTORIES
Inventories consist primarily of tires, fuel and supplies and are stated at the
lower of cost (first-in, first-out basis) or market.
PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost. For financial reporting purposes,
the cost of such property is depreciated principally by the straight-line method
using the following estimated useful lives: structures - 5 to 39.5 years;
revenue equipment - 3 to 10 years; and service, office and other equipment - 3
to 20 years. Gains and losses on asset sales are reflected in the year of
disposal. Trade-in allowances in excess of book value of revenue equipment are
accounted for by adjusting the cost of assets acquired. Tires purchased with
revenue equipment are capitalized as a part of the cost of such equipment, with
replacement tires being inventoried and expensed when placed in service.
23
26
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT (CONTINUED)
During 2000, the Company made certain changes in the estimated lives and salvage
values of certain revenue equipment to better reflect the Company's experience
as to service lives and resale values of that revenue equipment. Effective June
1, 2000, the Company changed the estimated lives and salvage values of its
trailers. This change decreased depreciation expense and increased net income by
approximately $563,500 during 2000. Effective October 1, 2000, the Company
changed the salvage values of certain types of its tractors. This change
increased depreciation expense and decrease net income by approximately $200,000
during 2000.
CLAIMS LIABILITIES
The Company is self-insured up to certain limits for bodily injury, property
damage, workers' compensation, and cargo loss and damage claims. Provisions are
made for both the estimated liabilities for known claims as incurred and
estimates for those incurred but not reported. In 2000 the Company was
self-insured up to $1,000,000 per occurrence for bodily injury and property
damage, up to $500,000 for workers' compensation claims, and up to $100,000 per
occurrence for cargo loss and damage claims. These self-insurance arrangements
are secured by $1,210,000 in letters of credit.
The workers' compensation self-insurance is secured by $100,000 in certificates
of deposit maturing during 2001. The certificates of deposit are included in
other assets on the balance sheet as of December 31, 2000 and 1999.
REVENUE RECOGNITION
Revenues are recognized based on a method whereby revenue is allocated between
reporting periods based on relative transit time in each period and direct
expenses are allocated on the same basis.
INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets include temporary differences
relating to depreciation, capitalized leases and certain revenues and expenses.
EARNINGS PER SHARE
Earnings per share amounts are computed based on Financial Accounting Standards
Board Statement No. 128, Earnings per Share. Basic earnings per share is
computed based on the weighted average number of shares of common stock
outstanding during the year excluding any dilutive effects of options. Diluted
earnings per share is computed by adjusting the weighted average shares
outstanding by common stock equivalents attributable to dilutive options.
24
27
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
COMPENSATION TO EMPLOYEES
Stock based compensation to employees is accounted for based on the intrinsic
value method under Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees (APB 25). Under APB 25 because the exercise price of
employee stock options equaled the market price of the underlying stock on the
grant date, no compensation expense is recorded. The Company has adopted the
disclosure - only provisions of Statement of Financial Accounting Standards No.
123, Accounting for Stock-Based Compensation (SFAS 123).
ADVERTISING COSTS
The Company expenses advertising costs as they are incurred. Total advertising
costs for the period ended December 31, 2000, 1999 and 1998 were $1,770,000,
$1,628,000, and $1,416,000 respectively.
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 is currently
evaluating the requirements of SFAS No. 133 and does not anticipate that the
adoption will have a material effect on earnings or the financial position of
the Company.
2. ACQUISITION
On November 1, 1999, pursuant to an Asset Purchase Agreement (the "Asset
Purchase Agreement") dated October 31, 1999, the Company acquired substantially
all the assets of CARCO Carrier Corporation, an Arkansas corporation, which
operated under the name CCC Express, Inc. ("CCC"), for a purchase price of $35.3
million. The purchase price consisted of (i) a cash payment of approximately
$3.0 million; (ii) the assumption of approximately $6.5 million of liabilities
including equipment notes and (iii) the refinancing of approximately $25.8
million in other debt secured by equipment. Additionally, $5.9 million of the
$25.8 million consisted of a non-cash transaction. The cash portion of the
purchase price was paid from available cash and proceeds of borrowings under the
Company's credit facilities. The purchase price was equal to the net book value
of CCC on the closing date, as adjusted in accordance with the Asset Purchase
Agreement, plus $2 million. In connection with the acquisition, the Company's
borrowing under its General Line of Credit was increased from $20 million to $35
million effective October 28, 1999.
25
28
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. ACQUISITION (CONTINUED)
The acquisition has been accounted for under the purchase method. Accordingly,
the acquired assets and liabilities have been recorded at their estimated fair
values at the date of acquisition. Operating results of the acquired business
are included in the statements of income from the acquisition date.
The following pro forma summary of results of operations has been prepared as
though CCC had been acquired on January 1, 1998. These pro forma results have
been prepared for comparative purposes only and do not purport to be indicative
of what would have occurred had the acquisition been made on January 1, 1998, or
of results which may occur in the future.
December 31,
--------------------------
1999 1998
------------ ------------
Operating revenues .................................... $222,089,793 $211,937,321
Net Income ............................................ 6,127,054 9,074,624
Basic earnings per share .............................. $ .66 $ .97
Diluted earnings per share ............................ $ .65 $ .96
3. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following:
December 31,
-----------------------
2000 1999
---------- ----------
Prepaid licenses and taxes ............................ $1,484,736 $1,381,345
Prepaid insurance ..................................... 1,938,554 2,039,749
Other ................................................. 777,328 212,962
---------- ----------
$4,200,618 $3,634,056
========== ==========
4. ACCRUED EXPENSES
Accrued expenses consist of the following:
December 31,
-------------------------
2000 1999
---------- -----------
Salaries, wages, bonuses and employee benefits ......... $ 2,471,160 $ 4,352,233
Insurance and claims accruals .......................... 5,032,871 3,585,366
Other .................................................. 2,627,686 3,128,005
----------- -----------
$10,131,717 $11,065,604
=========== ===========
26
29
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. LONG-TERM DEBT
Long-term debt consists of the following:
December 31,
---------------------------
2000 1999
---------- ----------
Revolving credit agreement(1) .......................... $ 34,907,000 $ 38,990,000
Capitalized lease obligations(2) ....................... 43,620,879 36,419,181
------------ ------------
78,527,879 75,409,181
Less current maturities ................................ (12,867,611) (10,956,533)
------------ ------------
$ 65,660,268 $ 64,452,648
============ ============
(1) The Company's revolving credit agreement (the "Senior Credit
Facility"), effective April 28, 2000, provides for available borrowings
of $60,000,000, including letters of credit not exceeding $5,000,000.
The Senior Credit Facility matures on April 28, 2005, prior to which
time, subject to certain conditions, the remaining balance may be
converted at any time at the Company's option to a term loan requiring
forty-eight equal monthly principal payments plus interest. The 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 attainment of certain financial
ratios. The effective interest rate on the Company's borrowings under
the credit facility for the year ending December 31, 2000 was 7.58%. A
quarterly commitment fee of 1/5% per annum is payable on the unused
credit line. The Senior Credit Facility is collateralized by accounts
receivable and all otherwise unencumbered equipment. The Company has
outstanding letters of credit of approximately $1,210,000 at December
31, 2000.
The Senior Credit Facility requires the Company to meet certain
financial covenants and to maintain a minimum tangible net worth of
approximately $65,846,000 at December 31, 2000. The Company was in
compliance with these covenants at December 31, 2000. The covenants
would prohibit the payment of dividends by the Company if such payment
would cause the Company to be in violation of any of the covenants. The
carrying amount reported in the balance sheet for borrowings under the
Line of Credit approximates its fair value since the interest rate is
variable.
(2) The leases extend through February 2004 and contain renewal or fixed
price purchase options. The effective interest rates on the leases
range from 4.50% to 11.56% at December 31, 2000. The lease agreements
require the Company to pay property taxes, maintenance and operating
expenses.
The Company made interest payments of approximately $5,378,000, $1,490,000 and
$1,699,000 during 2000, 1999 and 1998, respectively. The Company capitalized
approximately $12,500 and $6,800 in interest as a result of construction during
2000 and 1998, respectively.
27
30
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. LEASES AND COMMITMENTS
Capital lease obligations of $20,421,263, $21,908,219 and $6,763,522 were
incurred during the years ended December 31, 2000, 1999 and 1998, respectively.
At December 31, 2000, the future minimum payments under capitalized leases with
initial terms of one year or more were $15,146,492 for 2001, $13,481,486 for
2002, $17,760,502 for 2003 and $1,349,203 for 2004. The present value of net
minimum lease payments was $43,620,879, which includes the current portion of
the capital leases of $12,867,611 and excludes amounts representing interest of
$4,116,805.
At December 31, 2000, property and equipment included capitalized leases, which
had capitalized costs of $58,048,308, accumulated amortization of $14,081,766
and a net book value of $43,966,542. At December 31, 1999 property and equipment
included capitalized leases, which had capitalized costs of $45,526,083,
accumulated amortization of $7,944,872 and a net book value of $37,581,211.
Amortization of leased assets is included in depreciation and amortization
expense.
Commitments to purchase revenue equipment, which are cancelable by the Company
if certain conditions are met, aggregated approximately $37,974,000 at December
31, 2000.
7. FEDERAL AND STATE INCOME TAXES
Significant components of the Company's deferred tax liabilities and assets as
of December 31, 2000 and 1999 are as follows:
December 31,
----------------------------
2000 1999
------------ ------------
Noncurrent deferred tax liabilities:
Tax over book depreciation ......................... $ 21,433,405 $ 16,904,280
Capitalized leases ................................. 338,222 104,084
------------ ------------
Total noncurrent deferred tax liabilities .............. 21,771,627 17,008,364
Noncurrent deferred tax assets:
Alternative minimum tax credits .................... (263,838) --
Net operating losses ............................... (396,764) --
------------ ------------
Total noncurrent deferred tax assets ................... (660,602) --
------------ ------------
Net current deferred tax liabilities ................... $ 21,111,025 $ 17,008,364
============ ============
Current deferred tax assets:
Revenue recognition ................................ $ (42,661) $ (89,392)
Accrued expenses not deductible until paid ......... (3,033,282) (2,389,894)
Allowance for doubtful accounts .................... (115,323) (99,166)
------------ ------------
Total current deferred tax assets ...................... (3,191,266) (2,578,452)
Current deferred tax liabilities:
Prepaid expenses deductible when paid .............. 1,583,633 1,370,039
------------ ------------
Net current deferred tax assets ........................ $ (1,607,633) $ (1,208,413)
============ ============
28
31
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. FEDERAL AND STATE INCOME TAXES (CONTINUED)
Significant components of the provision for income taxes are as follows:
Year Ended December 31,
-------------------------------------------
2000 1999 1998
----------- ----------- -----------
Current
Federal ......................................... $(3,642,796) $ 2,406,997 $ 2,812,318
State ........................................... -- 367,222 553,846
----------- ----------- -----------
Total current ................................... (3,642,796) 2,774,219 3,366,164
Deferred
Federal ......................................... 3,152,732 2,350,248 2,883,617
State ........................................... 550,709 447,030 433,347
----------- ----------- -----------
Total deferred .................................. 3,703,441 2,797,278 3,316,964
----------- ----------- -----------
Total income tax expense ........................ $ 60,645 $ 5,571,497 $ 6,683,128
=========== =========== ===========
During 2000, 1999 and 1998, the Company made income tax payments of
approximately $66,250, $3,105,300, and $3,484,000, respectively.
During 1998, the Company recognized a tax benefit of $53,065 related to stock
options. This amount was added to additional paid-in capital.
In 2000, the Company generated $396,742 in a state net operating loss carry
forward, which will expire in 2020. The Company also generated alternative
minimum tax credits of $263,838. These credits have no expiration date.
A reconciliation between the effective income tax rate and the statutory federal
income tax rate is as follows:
Year Ended December 31,
-------------------------------------------
2000 1999 1998
----------- ----------- -----------
Income tax at 34% statutory federal rate ......... $ 52,600 $ 4,832,420 $ 5,841,294
Federal income tax effects of:
State income taxes ........................... (7,224) (276,846) (336,172)
Nondeductible expenses ....................... 75,038 58,846 98,131
Other ........................................ (81,017) 142,825 92,682
----------- ----------- -----------
Federal income taxes ......................... 39,397 4,757,245 5,695,935
State income taxes ............................... 21,248 814,252 987,193
----------- ----------- -----------
Total income tax expense ......................... $ 60,645 $ 5,571,497 $ 6,683,128
=========== =========== ===========
Effective tax rate ............................... 39.2% 39.2% 38.9%
=========== =========== ===========
29
32
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. EMPLOYEE BENEFIT PLANS
The Company sponsors the USA Truck, Inc. Employees' Investment Plan, a tax
deferred savings plan under section 401(k) of the Internal Revenue Code, that
covers substantially all employees. Employees can contribute up to 15% of their
compensation, with the Company matching 50% of the first 4% of compensation
contributed by each employee. Company matching contributions were approximately
$788,400, $634,000 and $652,000 for 2000, 1999 and 1998, respectively.
9. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
Year Ended December 31,
---------------------------------------
2000 1999 1998
----------- ----------- -----------
Numerator:
Net Income ................................... $ 94,061 $ 8,641,502 $10,497,149
Denominator:
Denominator for basic earnings per
share - weighted average shares ............ 9,253,843 9,324,037 9,399,727
Effect of dilutive securities:
Employee stock options ..................... 6,201 30,404 66,244
----------- ----------- -----------
Denominator for diluted earnings per
share - adjusted weighted average
shares and assumed conversions ............. 9,260,011 9,354,441 9,465,971
=========== =========== ===========
Basic earnings per share ........................ $ .01 $ .93 $ 1.12
=========== =========== ===========
Diluted earnings per share ...................... $ .01 $ .92 $ 1.11
=========== =========== ===========
Anti-dilutive employee stock options ............ 79,600 94,600 --
=========== =========== ===========
10. COMMON STOCK TRANSACTIONS
The Company has a stock option plan which provides for the granting of incentive
or nonqualified options to purchase up to 800,000 shares of common stock to
officers and other key employees. No options may be granted under this plan for
less than the fair market value of the common stock at the date of the grant.
Although the exercise period is determined when options are actually granted, no
option will be exercised later than 10 years after it is granted.
The Company also has a nonqualified stock option plan for directors who are not
officers or employees of the Company, which provides for the granting of options
to purchase up to 25,000 shares of common stock. No options may be granted under
this plan with exercise prices of less than the fair market value of the common
stock at the date of grant. Although the exercise period is determined when
options are actually granted, options will vest no less than six months or more
than three years after the grant date and may not be exercised later than five
years after the grant date.
30
33
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
10. COMMON STOCK TRANSACTIONS (CONTINUED)
A summary of the Company's stock option activity, and related information for
the years ended December 31, follows:
2000 1999 1998
------------------------- -------------------------- -------------------------
WEIGHTED-AVERAGE Weighted-Average Weighted-Average
OPTIONS EXERCISE PRICE Options Exercise Price Options Exercise Price
------- ---------------- ------- ---------------- ------- ----------------
Outstanding-beginning
of year .................... 258,200 $ 8.09 323,200 $ 7.72 356,400 $ 6.90
Granted ...................... 185,000 5.49 -- -- 46,000 11.59
Exercised .................... (32,000) 6.25 (65,000) $ 6.25 (79,200) 6.30
Canceled ..................... (10,000) 6.96 -- -- -- --
Expired ...................... (20,600) 11.53 -- -- -- --
-------- -------- -------- -------- -------- --------
Outstanding-end of year ...... 380,600 $ 6.85 258,200 $ 8.09 323,200 $ 7.72
======== ======== ======== ======== ======== ========
Exercisable at end of year ... 104,800 $ 8.10 95,600 $ 7.85 103,000 $ 6.46
Exercise prices for options outstanding as of December 31, 2000 ranged from
$5.44 to $13.00. The weighted-average fair value of options granted during 2000
and 1998 were $2.33 and $4.30. No options were granted during 1999. The
weighted-average remaining contractual life of these options is 3.59 years.
No options were exercised for cash in 2000. In 1999 and 1998, 44,595 and 45,240
options, respectively, were exercised for cash. In 2000, 1999 and 1998
additional options of 30,200, 20,405 and 33,960 respectively, were exercised by
the exchange of 29,419, 15,056 and 16,971 shares of stock respectively, (with a
market value equal to the exercise price of the options). The exchanged shares
were then canceled.
Since the Company has adopted the disclosure-only provisions of SFAS 123, no
compensation cost has been recognized for the stock option plans. Had
compensation cost for the Company's two stock option plans been determined based
on the fair value at the grant date for awards in 2000, 1999 and 1998 consistent
with the provisions of SFAS 123, the Company's pro forma net income would have
been $20,808, $8,603,394 and $10,431,143, pro forma basic earnings per share
would have been $.00, $.92 and $.1.11, and pro forma diluted earnings per share
would have been $.00, $.92 and $1.10, respectively.
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model. The following weighted-average assumptions
were used for grants in 2000: dividend yield of 0%; expected volatility of
0.336%; risk-free interest rates range from 5.77% to 5.92% and expected lives
range from 3 to 7 years. The following weighted-average assumptions were used
for grants in 1999: dividend yield of 0%; expected volatility of 0.292%;
risk-free interest rates range from 4.29% to 5.44% and expected lives range from
3 to 5 years. The following weighted-average assumptions were used for grants in
1998: dividend yield of 0%; expected volatility of 0.457%; risk-free interest
rates range from 4.29% to 5.44% and expected lives range from 3 to 5 years.
31
34
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
11. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The tables below present quarterly financial information for 2000 and 1999:
2000
THREE MONTHS ENDED
------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
----------- ----------- ------------- ------------
Operating revenues ........................... $55,144,425 $58,348,467 $ 55,532,933 $ 57,559,612
Operating expenses and costs ................. 54,344,363 54,871,633 53,434,653 58,139,869
----------- ----------- ------------- ------------
Operating income ............................. 800,062 3,476,834 2,098,280 (580,257)
Other expenses, net .......................... 1,451,235 1,533,420 1,255,588 1,399,970
----------- ----------- ------------- ------------
(Loss) income before income taxes ............ (651,173) 1,943,414 842,692 (1,980,227)
Income tax (benefit) expense ................. (256,788) 763,347 330,335 (776,249)
----------- ----------- ------------- ------------
Net (Loss) income ............................ $ (394,385) $ 1,180,067 $ 512,357 $ (1,203,978)
=========== =========== ============= ============
Average shares outstanding (basic) ........... 9,266,229 9,297,761 9,257,973 9,222,264
=========== =========== ============= ============
Basic (loss) earnings per share .............. $ (.04) $ .13 $ .06 $ (.13)
=========== =========== ============= ============
Average shares outstanding (diluted) ......... 9,288,976 9,302,194 9,264,116 9,228,370
=========== =========== ============= ============
Diluted (loss) earnings per share ............ $ (.04) $ .13 $ .06 $ (.13)
=========== =========== ============= ============
1999
Three Months Ended
------------------------------------------------------
March 31, June 30, September 30, December 31,
----------- ----------- ------------- ------------
Operating revenues ........................... $36,199,447 $38,117,504 $ 40,416,850 $ 51,629,555
Operating expenses and costs ................. 32,063,006 33,830,877 37,330,310 47,302,491
----------- ----------- ------------- ------------
Operating income ............................. 4,136,441 4,286,627 3,086,540 4,327,064
Other expenses, net .......................... 313,880 282,016 308,597 719,180
----------- ----------- ------------- ------------
Income before income taxes ................... 3,822,561 4,004,611 2,777,943 3,607,884
Income taxes ................................. 1,498,444 1,569,808 1,088,954 1,414,291
----------- ----------- ------------- ------------
Net income ................................... $ 2,324,117 $ 2,434,803 $ 1,688,989 $ 2,193,593
=========== =========== ============= ============
Average shares outstanding (basic) ........... 9,392,817 9,373,109 9,298,377 9,257,361
=========== =========== ============= ============
Basic earnings per share ..................... $ .25 $ .26 $ .18 $ .24
=========== =========== ============= ============
Average shares outstanding (diluted) ......... 9,452,481 9,410,750 9,335,972 9,287,601
=========== =========== ============= ============
Diluted earnings per share ................... $ .25 $ .26 $ .18 $ .24
=========== =========== ============= ============
12. LITIGATION
The Company is not a party to any pending legal proceedings which management
believes to be material to the financial condition of the Company. The Company
maintains liability insurance against risks arising out of the normal course of
its business.
32
35
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no changes in or disagreements with accountants on
accounting and financial disclosure matters during any period covered by the
financial statements filed herein or any period subsequent thereto.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The sections entitled "Election of Directors", "Executive Officers" and
"Section 16(a) Compliance" in the Company's proxy statement for the annual
meeting of stockholders to be held on May 2, 2001, set forth certain information
with respect to the directors, nominees for election as directors and executive
officers of the Company and are incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The section entitled "Executive Compensation" in the Company's proxy
statement for the annual meeting of stockholders to be held on May 2, 2001, sets
forth certain information with respect to the compensation of management of the
Company and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The sections entitled "Outstanding Stock and Voting Rights" and
"Election of Directors" in the Company's proxy statement for the annual meeting
of stockholders to be held on May 2, 2001, set forth certain information with
respect to the ownership of the Company's voting securities and are incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The section entitled "Certain Transactions" in the Company's proxy
statement for the annual meeting of stockholders to be held on May 2, 2001, sets
forth certain information with respect to relations of and transactions by
management of the Company and is incorporated herein by reference.
33
36
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) THE FOLLOWING DOCUMENTS ARE FILED AS A PART OF THIS REPORT:
1. Financial statements.
The following financial statements of the Company are included in Part II,
Item 8 of this report:
PAGE
----
Balance Sheets as of December 31, 2000 and 1999................................................. 19
Statements of Income for the years ended December 31, 2000, 1999 and 1998....................... 20
Statements of Stockholders' Equity for the years ended December 31, 2000, 1999 and 1998......... 21
Statements of Cash Flows for the years ended December 31, 2000, 1999 and 1998................... 22
Notes to Financial Statements................................................................... 23
2. The following financial statement schedule of the Company is included in Item 14(d):
Schedule II - Valuation and Qualifying Accounts................................................ 40
Schedules other than the schedule listed above have been omitted since the
required information is not present or not present in amounts sufficient to
require submission of the schedule, or because the information required is
included in the financial statements or the notes thereto.
3. Listing of exhibits.
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
2.1 Asset Purchase Agreement dated as of October 31, 1999
between the Company, as buyer, and CARCO Carrier
Corporation doing business as CCC Express, Inc., as
seller, and CARCO Capital Corporation (incorporated by
reference to Exhibit 2.1 to the Company's Report on
Form 8-K filed on November 15, 1999).
3.1 Restated and Amended Certificate of Incorporation of
the Company (incorporated by reference to Exhibit 3.1
to the Company's Registration Statement on Form S-1,
Registration No. 33-45682, filed with the Securities
and Exchange Commission on February 13, 1992 [the "Form
S-1"]).
3.2 Bylaws of the Company as currently in effect
(incorporated by reference to Exhibit 3.2 to Amendment
No. 1 to the Form S-1 filed with the Securities and
Exchange Commission on March 19, 1992 ["Amendment No.
1"]).
3.3 Certificate of Amendment to Certificate of
Incorporation of the Company filed March 17, 1992
(incorporated by reference to Exhibit 3.3 to
Amendment No. 1).
4.1 Specimen certificate evidencing shares of the Common
Stock, $.01 par value, of the Company (incorporated by
reference to Exhibit 4.1 to the Form S-1).
34
37
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
4.2 Fourth Amended and Restated Revolving Credit Agreement
dated December 30, 1992, between the Company and
Deposit Guaranty National Bank, as Lender (incorporated
by reference to Exhibit 4.2 to the Company's annual
report on Form 10-K for the year ended December 31,
1992).
4.3 Fourth Amended and Restated Revolving Note of the
Company dated December 30, 1992, in the maximum
principal amount of $12,000,000 payable to Deposit
Guaranty National Bank, executed in connection with the
credit facility filed as Exhibit 4.2 (incorporated by
reference to Exhibit 4.3 to the Company's annual report
on Form 10-K for the year ended December 31, 1992).
4.4 Fifth Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated December 30, 1996,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.5 to
the Company's annual report on Form 10-K for the year
ended December 31, 1996).
4.5 Sixth Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated December 30, 1997,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.5 to
the Company's annual report on Form 10-K for the year
ended December 31, 1997).
4.6 Sixth Amendment to Fourth Amended and Restated
Revolving Note of the Company dated December 30, 1997,
in the maximum principal amount of $28,500,000 payable
to Deposit Guaranty National Bank, executed in
connection with the credit facility filed as Exhibit
4.5 (incorporated by reference to Exhibit 4.6 to the
Company's annual report on Form 10-K for the year ended
December 31, 1997).
4.7 Seventh Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated October 30, 1998,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.7 to
the Company's annual report on Form 10-K for the year
ended December 31, 1998).
4.8 Seventh Amendment to Fourth Amended and Restated
Revolving Note of the Company dated October 30, 1998,
in the maximum principal amount of $20,000,000 payable
to Deposit Guaranty National Bank, executed in
connection with the credit facility filed as Exhibit
4.7 (incorporated by reference to Exhibit 4.8 to the
Company's annual report on Form 10-K for the year ended
December 31, 1998).
4.9 Eighth Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated October 28, 1999,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.9 to
the Company's annual report on Form 10-K for the year
ended December 31, 1999).
35
38
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
4.10 Eighth Amended and Restated Revolving Note of the
Company dated October 28, 1999, in the maximum
principal amount of $35,000,000 payable to Deposit
Guaranty National Bank, executed in connection with the
credit facility filed as Exhibit 4.9 (incorporated by
reference to Exhibit 4.10 to the Company's annual
report on Form 10-K for the year ended December 31,
1999).
4.11 Ninth Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated December 15, 1999,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.11 to
the Company's annual report on Form 10-K for the year
ended December 31, 1999).
4.12 Ninth Amended and Restated Revolving Note of the
Company dated December 15, 1999, in the maximum
principal amount of $40,000,000 payable to Deposit
Guaranty National Bank, executed in connection with the
credit facility filed as Exhibit 4.11 (incorporated by
reference to Exhibit 4.12 to the Company's annual
report on Form 10-K for the year ended December 31,
1999).
4.13 TRAC Lease Commitment Agreement dated January 24, 1996,
between the Company and Fleet Credit Corporation, as
Lender. (incorporated by reference to Exhibit 4.9 to
the Company's annual report on Form 10-K for the year
ended December 31, 1995).
4.14 First Amendment to TRAC Lease Commitment Agreement
dated November 13, 1996, between the Company and Fleet
Credit Corporation, as Lender (incorporated by
reference to Exhibit 4.8 to the Company's annual report
on Form 10-K for the year ended December 31, 1997).
4.15 Equipment TRAC Lease Commitment Agreement dated
November 12, 1997 and accepted November 19, 1997,
between the Company and Banc One Leasing Corporation,
as Lender (incorporated by reference to Exhibit 4.9 to
the Company's annual report on Form 10-K for the year
ended December 31, 1997).
4.16 First Amendment dated December 30, 1998, to the
Equipment TRAC Lease Commitment Agreement dated
November 12, 1997 and accepted November 19, 1997,
between the Company and Banc One Leasing Corporation,
as Lender, as amended by letter dated March 12, 1999
(incorporated by reference to Exhibit 4.12 to the
Company's annual report on Form 10-K for the year ended
December 31, 1998).
4.17 Second Amendment dated December 30, 1998, to the
Equipment TRAC Lease Commitment Agreement dated October
25, 1999 between the Company and Banc One Leasing
Corporation, as Lender (incorporated by reference to
Exhibit 4.17 to the Company's annual report on Form
10-K for the year ended December 31, 1999).
36
39
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
4.18 TRAC Lease Commitment Agreement dated January 6, 2000
between the Company and SunTrust Leasing Corporation,
as Lessor (incorporated by reference to Exhibit 10.1 to
the Company's quarterly report on Form 10-Q for the
quarter ended March 31, 2000).
4.19 TRAC Lease Commitment Agreement dated January 11, 2000
and accepted January 12, 2000, between the Company and
First Union Commercial Corporation, as Lessor
(incorporated by reference to Exhibit 10.2 to the
Company's quarterly report on Form 10-Q for the quarter
ended March 31, 2000).
4.20 Senior Credit Facility Commitment Letter dated April
11, 2000, between the Company and Bank of America,
N.A., SunTrust Bank, and Mercantile Bank, N.A.
collectively as the Lenders (incorporated by reference
to Exhibit 10.1 to the Company's quarterly report on
Form 10-Q for the quarter ended March 31, 2000).
4.21 Senior Credit Facility Summary of Terms and Conditions
dated April 11, 2000, between the Company and Bank of
America, N.A., SunTrust Bank, and Mercantile Bank, N.A.
collectively as the Lenders (incorporated by reference
to Exhibit 10.2 to the Company's quarterly report on
Form 10-Q for the quarter ended June 30, 2000).
4.22* First Union Commercial Corporation Commitment Letter 46
dated October 17, 2000, for the First Amendment to the
Equipment TRAC Lease Agreement between the Company and
First Union Commercial Corporation, as Lessor.
4.23* Proposal Exhibit (No. 1) dated October 17, 2000, to the 48
Equipment TRAC Lease Agreement between the Company and
First Union Commercial Corporation, as Lessor.
4.24* SunTrust Leasing Corporation Commitment Letter dated 50
November 3, 2000, and accepted November 7, 2000, for
the First Amendment to the Equipment TRAC Lease
Agreement between the Company and SunTrust Leasing
Corporation, as Lessor.
4.25* Lease Proposal dated November 3, 2000, and accepted 51
November 7, 2000, to the Equipment TRAC Lease Agreement
between the Company and SunTrust Leasing Corporation,
as Lessor.
4.26 Instruments with respect to long-term debt not
exceeding 10% of the total assets of the Company have
not been filed. The Company agrees to furnish a copy of
such instruments to the Securities and Exchange
Commission upon request.
10.1 Employee Stock Option Plan of the Company (incorporated
by reference to Exhibit 10.6 to the Form S-1).
10.2 Nonqualified Stock Option Plan for Nonemployee
Directors of the Company (incorporated by reference to
Exhibit 10.7 to the Form S-1) terminated in January
1997, except with respect to outstanding options.
37
40
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
10.3 Description of Incentive Compensation Plan for
executive officers of the Company (incorporated by
reference to Exhibit 10.8 to the Form S-1).
10.4 1997 Nonqualified Stock Option Plan for Nonemployee
Directors of the Company (incorporated by reference to
Exhibit 99.1 to the Company's Registration Statement on
Form S-8, Registration No. 333-20721, filed with the
Securities and Exchange Commission on January 30,
1997).
21 The Company has no significant subsidiaries.
23 * Consent of Ernst & Young LLP, Independent Auditors. 54
- ----------
* Filed herewith.
Management Compensatory Plans:
-Employee Stock Option Plan (Exhibit 10.1)
-Nonqualified Stock Option Plan for Nonemployee Directors (Exhibit 10.2)
-Incentive Compensation Plan (Exhibit 10.3)
-1997 Nonqualified Stock Option Plan for Nonemployee Directors (Exhibit 10.4)
(b) REPORTS ON FORM 8-K:
Current report on Form 8-K as filed on November 15, 1999.
38
41
USA TRUCK, INC.
ANNUAL REPORT ON FORM 10-K
YEAR ENDED DECEMBER 31, 2000
ITEM 14(d)
FINANCIAL STATEMENT SCHEDULE
39
42
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
USA TRUCK, INC.
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- ---------- ----------- ---------- ---------
BALANCE AT CHARGED BALANCE
BEGINNING TO COST AND DEDUCTIONS END
DESCRIPTION OF PERIOD EXPENSES -OTHER(a) OF PERIOD
----------- ---------- ----------- ---------- ---------
Year ended December 31, 2000
Deducted from asset accounts:
Allowance for doubtful-accounts .................. $269,150 $ 82,200 $(48,147) $303,203
-------- -------- -------- --------
Year ended December 31, 1999
Deducted from asset accounts:
Allowance for doubtful accounts .................. $140,670 $121,900 $ 6,580 $269,150
-------- -------- -------- --------
Year ended December 31, 1998
Deducted from asset accounts:
Allowance for doubtful accounts .................. $170,250 $ 30,000 $(59,580) $140,670
-------- -------- -------- --------
(a) Uncollectible accounts written off, net recoveries.
40
43
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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)
By: /s/ ROBERT M. POWELL By: /s/ JERRY D. ORLER
------------------------------- -------------------------------
Robert M. Powell Jerry D. Orler
Chairman, President and Vice President - Finance, Chief
Chief Executive Officer Financial Officer and Secretary
Date: March 14, 2001 Date: March 14, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ ROBERT M. POWELL Chairman, President, March 14, 2001
- --------------------------- Chief Executive Officer
Robert M. Powell and Director
/s/ JERRY D. ORLER Vice President - Finance, March 14, 2001
- --------------------------- Chief Financial Officer, Secretary
Jerry D. Orler and Director
/s/ J.B. SPEED Director March 14, 2001
- ---------------------------
James B. Speed
/s/ GEORGE R. JACOBS Director March 14, 2001
- ---------------------------
George R. Jacobs
/s/ JIM L. HANNA Director March 14, 2001
- ---------------------------
Jim L. Hanna
/s/ ROLAND S. BOREHAM Director March 14, 2001
- ---------------------------
Roland S. Boreham, Jr.
/s/ JOE D. POWERS Director March 14, 2001
- ---------------------------
Joe D. Powers
41
44
INDEX TO EXHIBITS
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
2.1 Asset Purchase Agreement dated as of October 31, 1999
between the Company, as buyer, and CARCO Carrier
Corporation doing business as CCC Express, Inc., as
seller, and CARCO Capital Corporation (incorporated by
reference to Exhibit 2.1 to the Company's Report on
Form 8-K filed on November 15, 1999).
3.1 Restated and Amended Certificate of Incorporation of
the Company (incorporated by reference to Exhibit 3.1
to the Company's Registration Statement on Form S-1,
Registration No. 33-45682, filed with the Securities
and Exchange Commission on February 13, 1992 [the "Form
S-1"]).
3.2 Bylaws of the Company as currently in effect
(incorporated by reference to Exhibit 3.2 to Amendment
No. 1 to the Form S-1 filed with the Securities and
Exchange Commission on March 19, 1992 ["Amendment No.
1"]).
3.3 Certificate of Amendment to Certificate of
Incorporation of the Company filed March 17, 1992
(incorporated by reference to Exhibit 3.3 to
Amendment No. 1).
4.1 Specimen certificate evidencing shares of the Common
Stock, $.01 par value, of the Company (incorporated by
reference to Exhibit 4.1 to the Form S-1).
4.2 Fourth Amended and Restated Revolving Credit Agreement
dated December 30, 1992, between the Company and
Deposit Guaranty National Bank, as Lender (incorporated
by reference to Exhibit 4.2 to the Company's annual
report on Form 10-K for the year ended December 31,
1992).
4.3 Fourth Amended and Restated Revolving Note of the
Company dated December 30, 1992, in the maximum
principal amount of $12,000,000 payable to Deposit
Guaranty National Bank, executed in connection with the
credit facility filed as Exhibit 4.2 (incorporated by
reference to Exhibit 4.3 to the Company's annual report
on Form 10-K for the year ended December 31, 1992).
4.4 Fifth Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated December 30, 1996,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.5 to
the Company's annual report on Form 10-K for the year
ended December 31, 1996).
4.5 Sixth Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated December 30, 1997,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.5 to
the Company's annual report on Form 10-K for the year
ended December 31, 1997).
42
45
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
4.6 Sixth Amendment to Fourth Amended and Restated
Revolving Note of the Company dated December 30, 1997,
in the maximum principal amount of $28,500,000 payable
to Deposit Guaranty National Bank, executed in
connection with the credit facility filed as Exhibit
4.5 (incorporated by reference to Exhibit 4.6 to the
Company's annual report on Form 10-K for the year ended
December 31, 1997).
4.7 Seventh Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated October 30, 1998,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.7 to
the Company's annual report on Form 10-K for the year
ended December 31, 1998).
4.8 Seventh Amendment to Fourth Amended and Restated
Revolving Note of the Company dated October 30, 1998,
in the maximum principal amount of $20,000,000 payable
to Deposit Guaranty National Bank, executed in
connection with the credit facility filed as Exhibit
4.7 (incorporated by reference to Exhibit 4.8 to the
Company's annual report on Form 10-K for the year ended
December 31, 1998).
4.9 Eighth Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated October 28, 1999,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.9 to
the Company's annual report on Form 10-K for the year
ended December 31, 1999).
4.10 Eighth Amended and Restated Revolving Note of the
Company dated October 28, 1999, in the maximum
principal amount of $35,000,000 payable to Deposit
Guaranty National Bank, executed in connection with the
credit facility filed as Exhibit 4.9 (incorporated by
reference to Exhibit 4.10 to the Company's annual
report on Form 10-K for the year ended December 31,
1999).
4.11 Ninth Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated December 15, 1999,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.11 to
the Company's annual report on Form 10-K for the year
ended December 31, 1999).
4.12 Ninth Amended and Restated Revolving Note of the
Company dated December 15, 1999, in the maximum
principal amount of $40,000,000 payable to Deposit
Guaranty National Bank, executed in connection with the
credit facility filed as Exhibit 4.11 (incorporated by
reference to Exhibit 4.12 to the Company's annual
report on Form 10-K for the year ended December 31,
1999).
4.13 TRAC Lease Commitment Agreement dated January 24, 1996,
between the Company and Fleet Credit Corporation, as
Lender. (incorporated by reference to Exhibit 4.9 to
the Company's annual report on Form 10-K for the year
ended December 31, 1995).
43
46
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
4.14 First Amendment to TRAC Lease Commitment Agreement
dated November 13, 1996, between the Company and Fleet
Credit Corporation, as Lender (incorporated by
reference to Exhibit 4.8 to the Company's annual report
on Form 10-K for the year ended December 31, 1997).
4.15 Equipment TRAC Lease Commitment Agreement dated
November 12, 1997 and accepted November 19, 1997,
between the Company and Banc One Leasing Corporation,
as Lender (incorporated by reference to Exhibit 4.9 to
the Company's annual report on Form 10-K for the year
ended December 31, 1997).
4.16 First Amendment dated December 30, 1998, to the
Equipment TRAC Lease Commitment Agreement dated
November 12, 1997 and accepted November 19, 1997,
between the Company and Banc One Leasing Corporation,
as Lender, as amended by letter dated March 12, 1999
(incorporated by reference to Exhibit 4.12 to the
Company's annual report on Form 10-K for the year ended
December 31, 1998).
4.17 Second Amendment dated December 30, 1998, to the
Equipment TRAC Lease Commitment Agreement dated October
25, 1999 between the Company and Banc One Leasing
Corporation, as Lender (incorporated by reference to
Exhibit 4.17 to the Company's annual report on Form
10-K for the year ended December 31, 1999).
4.18 TRAC Lease Commitment Agreement dated January 6, 2000
between the Company and SunTrust Leasing Corporation,
as Lessor (incorporated by reference to Exhibit 10.1 to
the Company's quarterly report on Form 10-Q for the
quarter ended March 31, 2000).
4.19 TRAC Lease Commitment Agreement dated January 11, 2000
and accepted January 12, 2000, between the Company and
First Union Commercial Corporation, as Lessor
(incorporated by reference to Exhibit 10.2 to the
Company's quarterly report on Form 10-Q for the quarter
ended March 31, 2000).
4.20 Senior Credit Facility Commitment Letter dated April
11, 2000, between the Company and Bank of America,
N.A., SunTrust Bank, and Mercantile Bank, N.A.
collectively as the Lenders (incorporated by reference
to Exhibit 10.1 to the Company's quarterly report on
Form 10-Q for the quarter ended March 31, 2000).
4.21 Senior Credit Facility Summary of Terms and Conditions
dated April 11, 2000, between the Company and Bank of
America, N.A., SunTrust Bank, and Mercantile Bank, N.A.
collectively as the Lenders (incorporated by reference
to Exhibit 10.2 to the Company's quarterly report on
Form 10-Q for the quarter ended June 30, 2000).
44
47
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
4.22* First Union Commercial Corporation Commitment Letter 46
dated October 17, 2000, for the First Amendment to the
Equipment TRAC Lease Agreement between the Company and
First Union Commercial Corporation, as Lessor.
4.23* Proposal Exhibit (No. 1) dated October 17, 2000, to the 48
Equipment TRAC Lease Agreement between the Company and
First Union Commercial Corporation, as Lessor.
4.24* SunTrust Leasing Corporation Commitment Letter dated 50
November 3, 2000, and accepted November 7, 2000, for
the First Amendment to the Equipment TRAC Lease
Agreement between the Company and SunTrust Leasing
Corporation, as Lessor.
4.25* Lease Proposal dated November 3, 2000, and accepted 51
November 7, 2000, to the Equipment TRAC Lease Agreement
between the Company and SunTrust Leasing Corporation,
as Lessor.
4.26 Instruments with respect to long-term debt not
exceeding 10% of the total assets of the Company have
not been filed. The Company agrees to furnish a copy of
such instruments to the Securities and Exchange
Commission upon request.
10.1 Employee Stock Option Plan of the Company (incorporated
by reference to Exhibit 10.6 to the Form S-1).
10.2 Nonqualified Stock Option Plan for Nonemployee
Directors of the Company (incorporated by reference to
Exhibit 10.7 to the Form S-1) terminated in January
1997, except with respect to outstanding options.
10.3 Description of Incentive Compensation Plan for
executive officers of the Company (incorporated by
reference to Exhibit 10.8 to the Form S-1).
10.4 1997 Nonqualified Stock Option Plan for Nonemployee
Directors of the Company (incorporated by reference to
Exhibit 99.1 to the Company's Registration Statement on
Form S-8, Registration No. 333-20721, filed with the
Securities and Exchange Commission on January 30,
1997).
21 The Company has no significant subsidiaries.
23* Consent of Ernst & Young LLP, Independent Auditors. 54
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* Filed herewith.
45