10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

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: 1-35740

USA TRUCK INC.

(Exact name of registrant as specified in its charter)

Delaware	71-0556971
(State or other jurisdiction of incorporation	(I.R.S. Employer Identification No.)
or organization)
3200 Industrial Park Road
Van Buren, Arkansas	72956
(Address of principal executive offices)	(Zip Code)

479-471-2500

(Registrant’s telephone number, including area code) 

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s):	Name of each exchange on which registered:
Common Stock, $0.01 Par Value	USAK	The NASDAQ Stock Market LLC (NASDAQ Global Select Market)

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 whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  [X]  No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer [ ]	Accelerated filer ☒	Smaller reporting company ☒
Non-accelerated filer [ ]		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐  No [X]

The number of shares outstanding of the registrant’s common stock, as of July 24, 2020, was 8,762,377.

USA TRUCK INC.

TABLE OF CONTENTS

Item No.	Caption		Page
		PART I – FINANCIAL INFORMATION
1.		Financial Statements
		Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2020 and December 31, 2019		2
		Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income (unaudited) - Three and six months ended June 30, 2020 and June 30, 2019		3
		Condensed Consolidated Statements of Stockholders’ Equity (unaudited) - Three and six months ended June 30, 2020 and June 30, 2019		4
		Condensed Consolidated Statements of Cash Flows (unaudited) - Six months ended June 30, 2020 and June 30, 2019		5
		Notes to Condensed Consolidated Financial Statements (unaudited)		6
2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
3.		Quantitative and Qualitative Disclosures About Market Risk		28
4.		Controls and Procedures		28
		PART II – OTHER INFORMATION
1.		Legal Proceedings		29
1A.		Risk Factors		29
2.		Unregistered Sales of Equity Securities and Use of Proceeds		30
3.		Defaults Upon Senior Securities		30
4.		Mine Safety Disclosures		30
5.		Other Information		30
6.		Exhibits		31
		Signatures		32

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

USA TRUCK INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

Assets	June 30, 2020		December 31, 2019
Current assets:	(in thousands, except share data)
Cash	$	92	$	97
Accounts receivable, net of allowance for doubtful accounts of $810 and $369, respectively		53,362		49,853
Other receivables		7,947		5,408
Inventories		786		769
Assets held for sale		1,082		2,542
Prepaid expenses and other current assets		6,666		7,855
Total current assets		69,935		66,524
Property and equipment:
Land and structures		33,474		33,077
Revenue equipment		320,623		309,573
Service, office and other equipment		31,077		30,235
Property and equipment, at cost		385,174		372,885
Accumulated depreciation and amortization		(142,414)		(124,216)
Property and equipment, net		242,760		248,669
Operating leases - right of use assets		7,866		11,775
Goodwill		5,231		5,231
Other intangibles, net		15,773		16,453
Other assets		1,209		2,058
Total assets	$	342,774	$	350,710
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	24,197	$	29,421
Current portion of insurance and claims accruals		9,702		12,466
Accrued expenses		8,338		6,518
Current finance lease obligations		25,928		30,779
Current operating lease obligations		3,028		6,050
Long-term debt, current maturities		3,064		6,165
Total current liabilities		74,257		91,399
Other long-term liabilities		1,629		80
Long-term debt, less current maturities		92,158		83,349
Long-term finance lease obligations		60,363		58,397
Long-term operating lease obligations		4,966		5,812
Deferred income taxes		24,824		24,017
Insurance and claims accruals, less current portion		9,071		9,445
Total liabilities		267,268		272,499
Stockholders’ equity:
Preferred Stock, $0.01 par value; 1,000,000 shares authorized; none issued		—		—
Common Stock, $0.01 par value; 30,000,000 shares authorized; issued 12,036,279 shares, and 11,987,572 shares, respectively		120		120
Additional paid-in capital		59,565		63,238
Retained earnings		70,287		73,769
Less treasury stock, at cost (3,273,902 shares, and 3,434,231 shares, respectively)		(54,466)		(58,916)
Total stockholders’ equity		75,506		78,211
Total liabilities and stockholders’ equity	$	342,774	$	350,710

See accompanying notes to condensed consolidated financial statements.

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USA TRUCK INC.

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND

COMPREHENSIVE (LOSS) INCOME

(UNAUDITED)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
	(in thousands, except per share data)
Operating revenue	$	123,737	$	133,622	$	250,510	$	267,596
Operating expenses:
Salaries, wages and employee benefits		33,636		33,806		69,481		69,896
Fuel and fuel taxes		8,082		14,102		19,945		27,733
Depreciation and amortization		10,034		9,125		20,045		17,943
Insurance and claims		4,009		7,160		9,866		14,440
Equipment rent		2,336		2,568		4,628		5,288
Operations and maintenance		8,606		8,481		17,502		15,754
Purchased transportation		49,276		49,072		97,090		97,353
Operating taxes and licenses		1,349		1,311		2,508		2,428
Communications and utilities		906		719		1,719		1,486
(Gain) loss on disposal of assets, net		(16)		141		22		(4)
Asset impairments		588		367		588		367
Other		3,931		4,787		8,428		9,008
Total operating expenses		122,737		131,639		251,822		261,692
Operating income (loss)		1,000		1,983		(1,312)		5,904
Other expenses:
Interest expense, net		1,235		1,595		2,919		3,336
Other, net		64		171		110		308
Total other expenses, net		1,299		1,766		3,029		3,644
(Loss) income before income taxes		(299)		217		(4,341)		2,260
Income tax expense (benefit)		632		216		(859)		758
Consolidated net (loss) income and comprehensive (loss) income	$	(931)	$	1	$	(3,482)	$	1,502
Net (loss) earnings per share:
Average shares outstanding (basic)		8,820		8,554		8,737		8,479
Basic (loss) earnings per share	$	(0.11)	$	0.00	$	(0.40)	$	0.18
Average shares outstanding (diluted)		8,820		8,567		8,737		8,498
Diluted (loss) earnings per share	$	(0.11)	$	0.00	$	(0.40)	$	0.18

See accompanying notes to condensed consolidated financial statements.

3

USA TRUCK INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

	Common Stock			Additional
		Par		Paid-in		Retained		Treasury
	Shares	Value		Capital		Earnings		Stock		Total
	(in thousands)
Balance at December 31, 2019	11,988	$	120	$	63,238	$	73,769	$	(58,916)	$	78,211
Issuance of treasury stock	—		—		(4,327)		—		4,327		—
Stock-based compensation	—		—		471		—		—		471
Forfeited restricted stock	(15)		—		—		—		—		—
Net share settlement related to restricted stock vesting	(11)		—		(57)		—		—		(57)
Net loss	—		—		—		(2,551)		—		(2,551)
Balance at March 31, 2020	11,962		120		59,325		71,218		(54,589)		76,074
Issuance of treasury stock	—		—		(123)		—		123		—
Stock-based compensation	—		—		363		—		—		363
Restricted stock award grant	74		—		—		—		—		—
Net loss	—		—		—		(931)		—		(931)
Balance at June 30, 2020	12,036	$	120	$	59,565	$	70,287	$	(54,466)	$	75,506

	Common Stock			Additional
		Par		Paid-in		Retained		Treasury
	Shares	Value		Capital		Earnings		Stock		Total
	(in thousands)
Balance at December 31, 2018	12,012	$	120	$	66,433	$	78,467	$	(63,747)	$	81,273
Issuance of treasury stock	—		—		(4,558)		—		4,558		—
Stock-based compensation	—		—		589		—		—		589
Net share settlement related to restricted stock vesting	(5)		—		(72)		—		—		(72)
Net income	—		—		—		1,501		—		1,501
Balance at March 31, 2019	12,007		120		62,392		79,968		(59,189)		83,291
Issuance of treasury stock	—		—		(378)		—		378		—
Stock-based compensation	—		—		705		—		—		705
Forfeited restricted stock	(18)		—		—		—		—		—
Net share settlement related to restricted stock vesting	—		—		(1)		—		—		(1)
Net income	—		—		—		1		—		1
Balance at June 30, 2019	11,989	$	120	$	62,718	$	79,969	$	(58,811)	$	83,996

See accompanying notes to condensed consolidated financial statements.

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USA TRUCK INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended June 30,
	2020		2019
Operating activities:	(in thousands)
Net (loss) income	$	(3,482)	$	1,502
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		20,045		17,943
Bad debt expense		478		(140)
Deferred income tax, net		807		774
Share-based compensation		834		1,294
Loss (gain) on disposal of assets, net		22		(4)
Asset impairments		588		367
Other		40		127
Changes in operating assets and liabilities:
Accounts and other receivables		(5,797)		(6,283)
Inventories and prepaid expenses		1,172		2,930
Accounts payable and accrued liabilities		1,594		(809)
Insurance and claims accruals		(2,745)		(1,220)
Other long-term assets and liabilities		850		(727)
Net cash provided by operating activities	$	14,406	$	15,754
Investing activities:
Acquisition of Davis Transfer Company (net of cash)		—		(305)
Capital expenditures		(9,809)		(25,209)
Proceeds from sale of property and equipment		1,459		7,643
Net cash used in investing activities	$	(8,350)	$	(17,871)
Financing activities:
Borrowings under long-term debt		33,200		53,700
Payments on long-term debt		(26,440)		(55,249)
Principal payments on financing lease obligations		(11,366)		(6,375)
Proceeds from obligation under finance lease		—		10,471
Payments on obligation under finance lease		(1,052)		(219)
Payment of debt issuance costs		—		(538)
Net change in bank drafts payable		(346)		(391)
Net payments for tax withholdings for vested stock-based awards		(57)		(73)
Net cash (used in) provided by financing activities	$	(6,061)	$	1,326
Decrease in cash		(5)		(791)
Cash:
Beginning of period		97		989
End of period	$	92	$	198
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	2,704	$	2,986
Income taxes		29		998
Supplemental disclosure of non-cash investing:
Sales of revenue equipment included in other receivables	$	730	$	—

See accompanying notes to condensed consolidated financial statements.

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USA TRUCK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

June 30, 2020

NOTE 1 – BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements include the accounts and operations of USA Truck Inc., and present our financial position as of June 30, 2020 and December 31, 2019 and our results of operations, comprehensive (loss) income and cash flows for the three and six months ended June 30, 2020 and 2019.

These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and do not include all of the information normally included with financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) of the United States.  Additionally, the Company has elected to utilize certain abbreviated reporting requirements available to smaller reporting companies. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

These condensed consolidated financial statements and notes are unaudited.  However, in the opinion of management, these condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of the results for the periods presented.  Results for interim periods are not necessarily indicative of results to be expected for the full year ending December 31, 2020.

The accompanying condensed consolidated financial statements include USA Truck Inc., and its wholly owned subsidiaries: International Freight Services, Inc. (“IFS”), a Delaware corporation; Davis Transfer Company Inc. (“DTC”), a Georgia corporation, Davis Transfer Logistics Inc. (“DTL”), a Georgia corporation, and B & G Leasing, L.L.C. (“B & G”), a Georgia limited liability company.  Collectively, DTC, DTL, and B & G comprise “Davis Transfer Company”.  References in this report to “it,” “we,” “us,” “our,” or the “Company,” and similar expressions refer to USA Truck Inc. and its subsidiaries.  All significant intercompany balances and transactions have been eliminated in preparing the condensed consolidated financial statements.  Certain amounts reported in prior periods have been reclassified to conform to the current year presentation.

Change in estimate

The Company reviews the estimated useful lives and salvage values of its fixed assets on an ongoing basis, based upon, among other things, our experience with similar assets, conditions in the used revenue equipment market, and prevailing industry practice.  During the first quarter of 2020, the Company lowered the salvage value of its tractor fleet from 30% to 25% to better reflect current estimates of the value of such equipment upon its retirement.  This change is being accounted for as a change in estimate.  During the three and six months ended June 30, 2020, this change in estimate resulted in an increase in depreciation and amortization expense of approximately $0.3 million and $0.8 million, respectively.

Risks and Uncertainties

In March 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency.  The rapid spread of the pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy.  In view of the rapidly changing business environment, unprecedented market volatility and heightened degree of uncertainty resulting from COVID-19, we are currently unable to fully determine its future impact on our business.  However, we continue to monitor the progression of the pandemic, further government response and development of treatments and vaccines and their potential effect on our financial position, results of operations, cash flows and liquidity.  These events could have an impact in future periods on certain estimates used in the preparation of our financial results, including, but not limited to impairment of goodwill, other intangible assets and other long-lived assets, income tax provision and recoverability of certain receivables.  Should the pandemic continue for an extended

6

period of time, the impact on our operations could have a material adverse effect on our financial condition, results of operations, cash flows and liquidity.

Accounting standards issued but not yet adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).  This update requires measurement and recognition of expected versus incurred credit losses for financial assets held.  For smaller reporting companies, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.  We are currently evaluating the effect of adopting ASU 2016-13.

NOTE 2 – REVENUE RECOGNITION

The following tables set forth revenue disaggregated by revenue type and segment:

	Three Months Ended June 30,
	2020								2019
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	78,514	$	35,040	$	(3,461)	$	110,093	$	82,664	$	34,698	$	(2,209)	$	115,153
Fuel surcharge		8,083		2,618		(167)		10,534		13,034		4,087		(220)		16,901
Accessorial		2,030		1,080		—		3,110		778		790		—		1,568
Total	$	88,627	$	38,738	$	(3,628)	$	123,737	$	96,476	$	39,575	$	(2,429)	$	133,622

	Six Months Ended June 30,
	2020								2019
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	159,417	$	66,707	$	(6,154)	$	219,970	$	164,086	$	71,328	$	(4,420)	$	230,994
Fuel surcharge		19,371		5,695		(520)		24,546		24,799		7,929		(387)		32,341
Accessorial		3,834		2,160		—		5,994		2,493		1,768		—		4,261
Total	$	182,622	$	74,562	$	(6,674)	$	250,510	$	191,378	$	81,025	$	(4,807)	$	267,596

At June 30, 2020 and December 31, 2019, the Company had contract assets, respresenting our right to consideration for transportation services not yet billed, of $1.4 million and $0.9 million, respectively.

NOTE 3 – SEGMENT REPORTING

The Company’s two reportable segments are Trucking and USAT Logistics.  In determining its reportable segments, the Company’s chief operating decision maker focuses on financial information, such as operating revenue, operating expense categories, operating ratios and operating income, as well as on key operating statistics, to make operating decisions.

Trucking. Trucking is comprised of one-way truckload and dedicated freight motor carrier services.  Truckload provides motor carrier services as a medium-haul common and contract carrier.  USA Truck has provided truckload motor carrier services since its inception, and continues to derive the largest portion of its gross revenue from these services.  Dedicated freight provides truckload motor carrier services to specific customers for movement of freight over particular routes at specified times.

USAT Logistics. USAT Logistics’ service offerings consist of freight brokerage, logistics, and rail intermodal services.  Each of these service offerings match customer shipments with available equipment of authorized third-party motor carriers and other service providers.  The Company provides these services to many existing Trucking customers, many of whom prefer to rely on a single service provider, or a small group of service providers, to provide all their transportation solutions.

7

Revenue equipment assets are not allocated to USAT Logistics as freight services for customers are brokered through arrangements with third-party motor carriers who utilize their own equipment.  To the extent rail intermodal or other USAT Logistics operations require the use of Company-owned assets, they are obtained from the Company’s Trucking segment on an as-needed basis.  Depreciation and amortization expense is allocated to USAT Logistics based on the Company-owned assets specifically utilized to generate USAT Logistics revenue.  All intercompany transactions between segments reflect rates similar to those that would be negotiated with independent third parties.  All other expenses for USAT Logistics are specifically identifiable direct costs or are allocated to USAT Logistics based on relevant cost drivers, as determined by management.

A summary of operating revenue by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating revenue	(in thousands)
Trucking revenue (1)	$	88,627	$	96,476	$	182,622	$	191,378
Trucking intersegment eliminations		(707)		(407)		(1,701)		(769)
Trucking operating revenue		87,920		96,069		180,921		190,609
USAT Logistics revenue		38,738		39,575		74,562		81,025
USAT Logistics intersegment eliminations		(2,921)		(2,022)		(4,973)		(4,038)
USAT Logistics operating revenue		35,817		37,553		69,589		76,987
Total operating revenue	$	123,737	$	133,622	$	250,510	$	267,596

1) Includes foreign revenue of $7.5 million and $9.4 million for the three months ended June 30, 2020 and 2019, respectively, and $16.1 million and $19.0 million for the six months ended June 30, 2020 and 2019, respectively.

A summary of operating income (loss) by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating income (loss)	(in thousands)
Trucking	$	1,176	$	837	$	(511)	$	2,445
USAT Logistics		(176)		1,146		(801)		3,459
Total operating income (loss)	$	1,000	$	1,983	$	(1,312)	$	5,904

A summary of depreciation and amortization by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Depreciation and amortization	(in thousands)
Trucking	$	9,697	$	8,853	$	19,473	$	17,432
USAT Logistics		337		272		572		511
Total depreciation and amortization	$	10,034	$	9,125	$	20,045	$	17,943

NOTE 4 – EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

The Company adopted the 2014 Omnibus Incentive Plan (the “Incentive Plan”) in May 2014.  The Incentive Plan replaced the 2004 Equity Incentive Plan and provided for the granting of up to 500,000 shares of common stock through equity-based awards to directors, officers and other key employees and consultants.  The First Amendment to the Incentive Plan was adopted in May 2017, which, among other things, increased the number of shares of common stock available for issuance under the Incentive Plan by an additional 500,000 shares.  The Second Amendment to the Incentive Plan was adopted in May 2019, which, among other things, increased the number of shares of common stock available for issuance under the Incentive Plan by an additional 500,000 shares.  As of June 30, 2020, 488,617 shares remain available under the Incentive Plan for the issuance of future equity-based compensation awards.

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NOTE 5 – ACCRUED EXPENSES

Accrued expenses consist of the following:

	June 30, 2020		December 31, 2019
	(in thousands)
Salaries, wages and employee benefits	$	5,532	$	3,668
Federal and state tax accruals		1,677		1,648
Other (1)		1,129		1,202
Total accrued expenses	$	8,338	$	6,518

1) No single item included within other accrued expenses exceeded 5.0% of our total current liabilities.

NOTE 6 –DEBT

Long-term debt consisted of the following:

	June 30, 2020		December 31, 2019
	(in thousands)
Revolving credit agreement	$	83,075	$	73,225
Sale leaseback finance obligations		10,731		11,783
Insurance premium financing (2019)		1,416		4,506
		95,222		89,514
Less current maturities		(3,064)		(6,165)
Total long-term debt	$	92,158	$	83,349

Credit facility

On January 31, 2019, the Company, entered into a five year, $225.0 million senior secured revolving credit facility (the “Credit Facility”) with a group of lenders and Bank of America, N.A., as agent (the “Agent”) pursuant to the terms of an Amended and Restated Loan and Security Agreement.  The Credit Facility replaced the Company’s previous five year, $170.0 million senior secured revolving credit facility dated February 15, 2015.  On April 7, 2020, the Company, in accordance with the terms of the Credit Agreement, provided notice to the Agent that effective as of April 20, 2020, the Company was permanently reducing the revolving credit commitment under the Credit Agreement by $55.0 million such that the revolving credit commitment is now $170.0 million.  The reduction in the revolving credit commitment will also reduce the fees paid by the Company in connection with such commitment.

The Credit Facility is structured as a $170.0 million revolving credit facility, with an accordion feature that, so long as no event of default exists, allows the Company to request an increase in the revolving credit facility of up to $75.0 million, exercisable in increments of at least $20.0 million.  The Credit Facility is a five year facility scheduled to terminate on January 31, 2024.  Borrowings under the Credit Facility are classified as either “base rate loans” or “LIBOR loans”.  Base rate loans accrue interest at a base rate equal to the Agent’s prime rate plus an applicable margin adjusted quarterly between 0.25% and 0.75% based on the Company’s consolidated fixed charge coverage ratio.  LIBOR loans accrue interest at the London Interbank Offered Rate (“LIBOR”) plus an applicable margin adjusted quarterly between 1.25% and 1.75% based on the Company’s consolidated fixed charge coverage ratio.  The Credit Facility includes, within its $170.0 million revolving credit facility, a letter of credit sub-facility in an aggregate amount of $15.0 million and a swingline sub-facility (the “Swingline”) in an aggregate amount of $25.0 million.  An unused line fee of 0.25% is applied to the average daily amount by which the lenders’ aggregate revolving commitments exceed the outstanding principal amount of revolver loans and the aggregate undrawn amount of all outstanding letters of credit issued under the Credit Facility.  The Credit Facility is secured by a pledge of substantially all of the Company’s assets, except for any real estate or revenue equipment financed outside the Credit Facility.

Borrowings under the Credit Facility are subject to a borrowing base limited to the lesser of (A) $170.0 million; or (B) the sum of (i) 90.0% of eligible investment grade accounts receivable (reduced to 85.0% in certain situations), plus (ii) 85.0% of eligible non-investment grade accounts receivable, plus (iii) the lesser of (a) 85.0% of eligible unbilled accounts receivable and (b) $10.0 million, plus (iv) the product of 85.0% multiplied by the net orderly liquidation value percentage applied to the net book value of eligible revenue equipment, plus (v)  85.0% multiplied by the net book value of otherwise eligible newly acquired revenue equipment that has not yet been subject to an appraisal.  The borrowing

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base is reduced by an availability reserve, including reserves based on dilution and certain other customary reserves.

The Credit Facility contains a single financial covenant, which requires a consolidated fixed charge coverage ratio of at least 1.0 to 1.0 that is triggered in the event excess availability under the Credit Facility falls below 10.0% of the lenders’ total commitments.  Also, certain restrictions regarding the Company’s ability to pay dividends, make certain investments, prepay certain indebtedness, execute share repurchase programs and enter into certain acquisitions and hedging arrangements are triggered in the event excess availability under the Credit Facility falls below 20.0% of the lenders’ total commitments.

The Company had no borrowings under the Swingline as of June 30, 2020.  The average interest rate including all borrowings made under the Credit Facility as of June 30, 2020 was 2.90%.  As debt is repriced on a monthly basis, the borrowings under the Credit Facility approximate fair value.  As of June 30, 2020, the Company had $7.4 million in letters of credit outstanding and had approximately $38 million available to borrow under the Credit Facility taking into account borrowing base availability.

Sale-leaseback transactions

In July 2019, the Company entered into a sale-leaseback transaction whereby it sold tractors for approximately $2.3 million and concurrently entered into a finance lease agreement for the sold tractors with a five year term.  Under the lease agreement, the Company paid an initial monthly payment of approximately $0.03 million.  At the end of the lease, the Company has the option to purchase the tractors.  This transaction does not qualify for sale-leaseback accounting due to the option to repurchase the tractors and is therefore treated as a financing obligation.

In April 2019, the Company entered into a sale-leaseback transaction whereby it sold tractors for approximately $10.5 million and concurrently entered into a finance lease agreement for the sold tractors with a five year term.  Under the lease agreement, the Company paid an initial monthly payment of approximately $0.1 million.  At the end of the lease, the Company has the option to purchase the tractors for the greater of fair market value or 32.5% of the original cost.  This transaction does not qualify for sale-leaseback accounting due to the option to repurchase the tractors and is therefore treated as a financing obligation.

Insurance premium financing

In October 2019, the Company entered into a short-term agreement to finance approximately $4.5 million with a third-party financing company for a portion of the Company’s annual insurance premiums.

NOTE 7 – LEASES

The components of lease expense for each of the periods presented are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
	(in thousands)
Operating lease costs	$	2,052	$	2,356	$	4,218	$	4,515
Finance lease costs:
Amortization of assets		4,784		2,959		9,507		5,650
Interest on lease liabilities		763		603		1,553		1,149
Total finance lease costs		5,547		3,562		11,060		6,799
Variable and short-term lease costs		284		212		411		773
Total lease costs	$	7,883	$	6,130	$	15,689	$	12,087

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Supplemental information and balance sheet location related to leases is as follows:

	June 30, 2020			December 31, 2019
Operating leases:	(dollars in thousands)
Operating lease right-of-use assets	$	7,866		$	11,775
Current operating lease obligations		3,028			6,050
Long-term operating lease obligations		4,966			5,812
Total operating lease liabilities	$	7,994		$	11,862
Finance leases:
Property and equipment, at cost		121,889			120,236
Accumulated amortization		(35,990)			(30,990)
Property and equipment, net	$	85,899		$	89,246
Current finance lease obligations		25,928			30,779
Long-term finance lease obligations		60,363			58,397
	$	86,291		$	89,176
Weighted average remaining lease term:		(in months)			(in months)
Operating leases		52			45
Finance leases		42			44
Weighted average discount rate:
Operating leases		4.00	%		4.03	%
Finance leases		3.50	%		3.34	%

Supplemental cash flow information related to leases is as follows for the six months ended:

	June 30, 2020		June 30, 2019
Cash paid for amounts included in measurement of liabilities:	(in thousands)
Operating cash flows from operating leases	$	42	$	3,885
Operating cash flows from finance leases		1,553		1,149
Financing cash flows from finance leases		11,366		6,375
ROU assets obtained in exchange for lease liabilities:
Operating leases		—		931
Finance leases		8,481		16,303

OTHER COMMITMENTS

As of June 30, 2020, the Company had no noncancellable commitments for the acquisition of revenue or non-revenue equipment.

During July 2020, the Company entered into an agreement to take delivery of 189 tractors through a lease agreement.

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RELATED PARTY LEASE

In the normal course of business, the Company leases office and shop space from a related party under a monthly operating lease.  Rent expense for this space was approximately $0.04 million for the three months ended June 30, 2020 and 2019, and $0.08 million for the six months ended June 30, 2020 and 2019, respectively.  This expense is included in the “Operations and maintenance” line item in the accompanying condensed consolidated statement of (loss) income and comprehensive (loss) income.

NOTE 8 – INCOME TAXES

During the three months ended June 30, 2020 and 2019, the Company’s effective tax rate was 211.4% and 99.5%, respectively.  During the six months ended June 30, 2020 and 2019, the Company’s effective tax rate was 19.8% and 33.5%, respectively.  The Company’s effective tax rate, when compared to the federal statutory rate of 21%, is primarily affected by state income taxes, net of federal income tax effect for the current year periods, and permanent differences, the most significant of which is the effect of the partially non-deductible per diem pay structure for our drivers.  Drivers may elect to receive non-taxable per diem pay in lieu of a portion of their taxable wages.  This per diem program increases the Company’s drivers’ net pay per mile, after taxes, while decreasing gross pay, before taxes.  Per diem pay is partially non-deductible by the Company under current IRS regulations.  As a result, salaries, wages and employee benefits costs are slightly lower and effective income tax rates are higher than the statutory rate.  Due to the partially non-deductible effect of per diem pay, the Company’s tax rate will change based on fluctuations in earnings (losses) and in the number of drivers who elect to receive this pay structure.  Generally, as pretax income or loss increases, the impact of the driver per diem program on the Company’s effective tax rate decreases, because aggregate per diem pay becomes smaller in relation to pretax income or loss, while in periods where earnings are at or near breakeven the impact of the per diem program on the Company’s effective tax rate can be significant.

As of June 30, 2020 and December 31, 2019, the Company had income tax receivables of approximately $3.5 million and $1.5 million, respectively, presented in the “Other receivables” line item in the condensed consolidated balance sheet.

During the six month period ended June 30, 2020 our effective tax rate was also affected by changes stemming from the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted in 2020, which allows a 5 year federal net operating loss carryback for federal income tax purposes to tax periods where the federal statutory rate was 35%, resulting in a tax benefit.  During the six months ended June 30, 2020 and 2019, the Company’s tax rate was negatively affected by vesting of equity-based compensation at a lower stock price than the price at which it was granted, as well as a non-deductible officer compensation, resulting in an increase to tax expense.

The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period.  We determined that since small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate.  As such, we have used a cut-off method to calculate taxes for the three and six months ended June 30, 2020.

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NOTE 9 – (LOSS) EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted (loss) earnings per share:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Numerator:	(in thousands, except per share amounts)
Net (loss) income	$	(931)	$	1	$	(3,482)	$	1,502
Denominator:
Denominator for basic earnings (loss) per share – weighted average shares		8,820		8,554		8,737		8,479
Effect of dilutive securities:
Employee restricted stock and incentive stock options		—		13		—		19
Denominator for diluted earnings (loss) per share – adjusted weighted average shares and assumed conversion		8,820		8,567		8,737		8,498
Basic (loss) earnings per share	$	(0.11)	$	0.00	$	(0.40)	$	0.18
Diluted (loss) earnings per share	$	(0.11)	$	0.00	$	(0.40)	$	0.18
Weighted average anti-dilutive employee restricted stock and incentive stock options		348		509		393		364

NOTE 10 – LEGAL PROCEEDINGS

The Company is party to routine litigation incidental to its business, primarily involving claims for personal injury and property damage incurred in the transportation of freight.  The Company maintains insurance to cover liabilities in excess of certain self-insured retention levels.  Though management believes these claims to be immaterial to the Company’s long-term financial position, adverse results of one or more of these claims could have a material adverse effect on the Company’s financial position or results of operations in any given reporting period.

NOTE 11 – LONG-LIVED ASSET IMPAIRMENT

During the second quarter of 2020, the Company reviewed the values of its assets held for sale and determined a subset of older model year tractors required an impairment of approximately $0.5 million.  In order to determine the fair values of the tractors, auction data was used from recent sales of similar tractors which is a Level 2 fair value measurement under the fair value hierarchy.

During the second quarter of 2020, in response to the closure of our Van Buren, Arkansas terminal the Company contracted with a third-party to appraise the terminal and the owned lands surrounding it.  As a result of the appraisal, an impairment was recorded for approximately $0.1 million for a parcel of land that had a book value in excess of its fair value.  The appraisal report is considered a Level 2 fair value measurement under the fair value hierarchy.

During the second quarter of 2019, the Company reviewed the values of its assets held for sale and determined a subset of tractors that the Company had recently experienced losses on disposal of similar tractors required an impairment of approximately $0.4 million.  The fair value was determined using quotes from third parties for the purchase of the tractors which is a Level 1 fair value measurement under the fair value hierarchy.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This report contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and such statements are subject to the safe harbor created by those sections, and the Private Securities Litigation Reform Act of 1995, as amended.  All statements, other than statements of historical or current fact, are statements that could be deemed forward-looking statements, including without limitation:

● any projections of earnings, revenue, costs, or other financial items;

● any statement of projected future operations or processes;

● any statement of plans, strategies, goals, and objectives of management for future operations;

● any statement concerning acquisitions, or proposed new services or developments;

● any statement regarding future economic conditions or performance;

● any statement of belief and any statement of assumptions underlying any of the foregoing; and

● any statement about the expected impact, evolution, duration or severity of the novel coronavirus (“COVID-19”) global pandemic, including our anticipated actions and responses thereto and the potential impact on our business, operations, customers, employees, financial results and  financial condition.

In this Quarterly Report on Form 10-Q, statements relating to:

● risks resulting from outbreaks or other public health crises, including COVID-19,

● future driver market,

● future ability to grow market share,

● future driver and customer-facing employee compensation,

● future ability and cost to recruit and retain drivers and customer-facing employees,

● future asset utilization,

● the amount, timing and price of future acquisitions and dispositions of revenue equipment, size and age of the Company’s fleet, mix of fleet between Company-owned and independent contractors and anticipated gains or losses resulting from dispositions,

● future depreciation and amortization expense, including useful lives and salvage values of equipment and intangible assets,

● future safety performance,

● future profitability,

● future industry capacity,

● future efforts of restructuring actions,

● future deployment of technology, including front and inside-facing event recorders,

● future pricing rates and freight network,

● future fuel prices and surcharges, fuel efficiency and hedging arrangements,

● future insurance and claims and litigation expense,

● future salaries, wages and employee benefits costs,

● future purchased transportation use and expense,

● future operations and maintenance costs,

● future USAT Logistics growth and profitability,

● future trends in operating expenses expected to result from growing our USAT Logistics business and increasing independent contractors,

● future asset sales of non-revenue assets,

● future impact of regulations, including enforcement of the ELD mandate,

● future use of derivative financial instruments,

● our strategy,

● our intention about the payment of dividends,

● inflation,

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● future indebtedness,

● future liquidity and borrowing availability and capacity,

● the impact of pending and future litigation and claims,

● future availability and compliance with covenants under our revolving credit facility,

● expected amount and timing of capital expenditures,

● future equipment market,

● expected liquidity and sources of capital resources, including the mix of financing and operating leases,

● future size of the independent contractor fleet, and

● future income tax rates.

among others, are forward-looking statements.  Such statements may be identified by their use of terms or phrases such as “expects,” “estimates,” “projects,” “believes,” “anticipates,” “focus,” “intends,” “plans,” “goals,” “may,” “if,” “will,” “should,” “could,” “potential,” “continue,” “future” and similar terms and phrases.  Forward-looking statements are based on currently available operating, financial, and competitive information.  Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “Item 1.A, Risk Factors,” in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and other filings with the Securities and Exchange Commission (the “SEC”).

All such forward-looking statements speak only as of the date of this report. You are cautioned not to place undue reliance on such forward-looking statements.  The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in management’s expectations with regard thereto or any change in the events, conditions or circumstances on which any such information is based, except as required by law.

All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by this cautionary statement.

References to the “Company,” “we,” “us,” “our” or similar terms refer to USA Truck Inc. and its subsidiaries.

Overview

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader more fully understand the operations and present business environment of USA Truck Inc.  MD&A is provided as a supplement to, and should be read in conjunction with, the condensed consolidated financial statements and notes thereto and other financial information that appears elsewhere in this report.  This overview summarizes the MD&A, which includes the following sections:

Business Overview – a general description of our business, the organization of our operations and the service offerings that comprise our operations.

Results of Operations – an analysis of the consolidated results of operations for the periods presented in the condensed consolidated financial statements included in this filing and a discussion of seasonality, the potential impact of inflation and fuel availability and cost.

Liquidity and Capital Resources – an analysis of cash flows, sources and uses of cash, debt, equity and contractual obligations.

Business Overview

USA Truck offers a broad range of truckload motor carrier and freight brokerage and logistics services to a diversified customer base that spans a variety of industries.  The Company has two reportable segments: (i) Trucking, consisting of one-way truckload motor carrier services, in which volumes typically are not contractually committed, and dedicated contract motor carrier services, in which a combination of equipment and drivers is contractually committed to a particular customer, typically for a duration of at least one year, subject to certain cancellation rights, and (ii) USAT Logistics, consisting of freight brokerage, logistics, and rail intermodal service offerings.

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The Trucking segment provides one-way truckload transportation, including dedicated services, of various products, goods and materials.  The Trucking segment primarily uses its own purchased or leased tractors and trailers or capacity provided by independent contractors to provide services to customers and is commonly referred to as “asset-based” trucking.  The Company’s USAT Logistics services match customer shipments with available equipment of authorized third-party motor carriers and other service providers and provide services that complement the Company’s Trucking operations.  USAT Logistics provides these services to many existing Trucking customers, many of whom prefer to rely on a single service provider, or a small group of service providers, to provide all their transportation solutions.

Revenue for the Company’s Trucking segment is substantially generated by transporting freight for customers, and is predominantly affected by rates per mile, the number of tractors in operation, and the number of revenue-generating miles per tractor.  The Company also generates revenue through fuel surcharge and ancillary services such as stop-off pay, loading and unloading activities, tractor and trailer detention, expediting charges, repositioning charges and other similar services.

Operating expenses fall into two categories: variable and fixed.  Variable expenses, or mostly variable expenses, constitute the majority of the expenses associated with transporting freight for customers, and include driver wages and benefits, fuel and fuel taxes, payments to independent contractors, operating and maintenance expense and insurance and claims expense.  These expenses vary primarily according to miles operated, but also have controllable components based on percentage of compensated miles, shop and dispatch efficiency, and safety and claims experience.

Fixed expenses, or mostly fixed expenses, include the capital costs of our assets (depreciation, amortization, rent and interest), compensation of non-driving employees and portions of insurance and maintenance expenses.  These expenses are partially controllable through management of fleet size and facilities infrastructure, headcount efficiency, and safety.

Fuel and fuel tax expense can fluctuate significantly with diesel fuel prices.  To mitigate the Company’s exposure to fuel price increases, it recovers from its customers fuel surcharges that historically have recouped a majority of the increased fuel costs; however, the Company cannot assure the recovery levels experienced in the past will continue in future periods.  Although the Company’s fuel surcharge program mitigates some exposure to rising fuel costs, the Company continues to have exposure to increasing fuel costs related to deadhead miles, out-of-route miles, fuel inefficiency due to engine idle time and other factors, including the extent to which the surcharges paid by customers are insufficient to compensate for higher fuel costs, particularly in times of rapidly increasing fuel prices.  The main factors that affect fuel surcharge revenue are the price of diesel fuel and the number of loaded miles.  The fuel surcharge is billed on a lagging basis, meaning the Company typically bills customers in the current week based on the previous week’s applicable United States Department of Energy (the “DOE”) Diesel Fuel Index.  Therefore, in times of increasing fuel prices, the Company does not recover as much in fuel surcharge revenue as it pays for fuel.  In periods of declining prices, the opposite is experienced.

The key statistics used to evaluate Trucking segment performance, in each case net of fuel surcharge revenue, include (i) base revenue per available tractor per week, (ii) base revenue per loaded mile, (iii) loaded miles per available tractor per week, (iv) deadhead percentage, (v) average loaded miles per trip, (vi) average number of available tractors and (vii) adjusted operating ratio.  In general, the Company’s loaded miles per available tractor per week, base revenue per loaded mile and deadhead percentage are affected by industry-wide freight volumes, industry-wide trucking capacity and the competitive environment, which are mostly beyond the Company’s control.  Factors over which the Company has significant control are its sales and marketing efforts, service levels and operational efficiency of its operations.

Unlike the Trucking segment, the USAT Logistics segment is non-asset based and is dependent upon skilled employees, reliable information systems and qualified third-party capacity providers.  The largest expense related to the USAT Logistics segment is purchased transportation expense.  Other operating expenses consist primarily of salaries, wages and employee benefits.  The Company evaluates the financial performance of the USAT Logistics segment by reviewing gross margin (USAT Logistics operating revenue less USAT Logistics purchased transportation expense) and the gross margin percentage (USAT Logistics operating revenue less USAT Logistics purchased transportation expense expressed as a percentage of USAT Logistics operating revenue).  Gross margin can be impacted by the rates charged to customers and the costs of securing third-party capacity.  USAT Logistics often achieves better gross margins during periods of imbalance between supply and demand than times of balanced supply and demand, although periods of transition to tight capacity also can compress margins.

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We plan to continue our focus on improving results through ongoing network engineering initiatives, pricing discipline, enhanced partnerships with customers, and improved execution in our day-to-day operations, as well as our ongoing safety initiatives.  By focusing on these key objectives, management believes it will make progress on its goals of improving the Company’s operating performance and increasing stockholder value.

COVID-19

In late 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China, which has since spread globally.  In March 2020, the World Health Organization declared COVID-19 a global pandemic.  Further, the COVID-19 outbreak has resulted in government authorities in the United States and around the world implementing numerous measures to try to reduce the spread of COVID-19, such as travel bans and restrictions, social distancing, quarantines, shelter in place or total lock-down orders and business limitations and shutdowns. While some of these measures have been relaxed or rolled back, we continue to monitor the situation as many government authorities have begun to pause the relaxation of restrictions or re-implement certain restrictive measures.

Local, state and national governments continue to emphasize the importance of transportation and have designated it an essential service.  We endeavor to follow governmental guidelines and have put the following measures in place:  institution of work from home for administrative employees, elimination of business travel, enforcement of social distancing, elimination of visitors into the corporate offices, required use of personal protective equipment by all employees, and increased sanitation.  We continue to evaluate and implement new measures as deemed appropriate.

We believe we have sufficient liquidity to satisfy our cash needs, however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during these challenging and uncertain times.  The overall impact of COVID-19 on our consolidated results of operations for the three and six months ended June 30, 2020 was minimal, as we have been able to replace decreased freight volumes from non-essential customers with freight in the spot market, however the impact that COVID-19 will have on our consolidated results of operations throughout the remainder of 2020 remains uncertain.  Based on the length and severity of COVID-19, we may experience decreases in the demand for our services.  We will continue to evaluate the nature and extent of these potential impacts to our business, consolidated results of operations, segment results, liquidity and capital resources.

Results of Operations

The following table sets forth the condensed consolidated statements of (loss) income and comprehensive (loss) income in dollars and percentage of consolidated operating revenue and the percentage increase or decrease in the dollar amounts of those items compared to the prior year.

	Three Months Ended June 30,
	2020					2019
					Adjusted					Adjusted	Change
			Operating		Operating			Operating		Operating	in Dollar
			Revenue		Ratio (1)			Revenue		Ratio (1)	Amounts
	$		%		%	$		%		%	%
	(dollars in thousands)
Base revenue	$	113,203	91.5	%		$	116,721	87.4	%		(3.0)	%
Fuel surcharge revenue		10,534	8.5				16,901	12.6			(37.7)
Operating revenue		123,737	100.0				133,622	100.0			(7.4)
Total operating expenses		122,737	99.2		98.6		131,639	98.5		98.0	(6.8)
Operating income		1,000	0.8				1,983	1.5			(49.6)
Other expenses:
Interest expense		1,235	1.0				1,595	1.2			(22.6)
Other, net		64	0.1				171	0.1			(62.6)
Total other expenses, net		1,299	1.0				1,766	1.3			(26.4)
(Loss) income before income taxes		(299)	(0.2)				217	0.2			(237.8)
Income tax expense		632	0.5				216	0.2			192.6
Consolidated net (loss) income	$	(931)	(0.8)	%		$	1	0.0	%		—	(2)

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	Six Months Ended June 30,
	2020					2019
					Adjusted					Adjusted	Change
			Operating		Operating			Operating		Operating	in Dollar
			Revenue		Ratio (1)			Revenue		Ratio (1)	Amounts
	$		%		%	$		%		%	%
	(dollars in thousands)
Base revenue	$	225,964	90.2	%		$	235,255	87.9	%		(3.9)	%
Fuel surcharge revenue		24,546	9.8				32,341	12.1			(24.1)
Operating revenue		250,510	100.0				267,596	100.0			(6.4)
Total operating expenses		251,822	100.5		100.1		261,692	97.8		97.1	(3.8)
Operating (loss) income		(1,312)	(0.5)				5,904	2.2			(122.2)
Other expenses:
Interest expense		2,919	1.2				3,336	1.2			(12.5)
Other, net		110	0.0				308	0.1			(64.3)
Total other expenses, net		3,029	1.2				3,644	1.4			(16.9)
(Loss) income before income taxes		(4,341)	(1.7)				2,260	0.8			(292.1)
Income tax (benefit) expense		(859)	(0.3)				758	0.3			(213.3)
Consolidated net (loss) income	$	(3,482)	(1.4)	%		$	1,502	0.6	%		(331.8)	%

1) Adjusted operating ratio is a non-GAAP financial measure.  See “Use of Non-GAAP Financial Information”, “Consolidated Reconciliations” and “Segment Reconciliations” below for the uses and limitations associated with adjusted operating ratio and other non-GAAP financial measures.

2) Percentage change not meaningful.  

Use of Non-GAAP Financial Information

The Company uses the terms “adjusted operating ratio” and “adjusted earnings (loss) per diluted share”, and “adjusted operating income (loss)” throughout this MD&A.  Adjusted operating ratio, adjusted earnings (loss) per diluted share, and adjusted operating income (loss), as defined here, are non-GAAP financial measures as defined by the SEC.  Management uses adjusted operating ratio, adjusted earnings (loss) per diluted share, and adjusted operating income (loss) as supplements to the Company’s GAAP results in evaluating certain aspects of its business, as discussed below.

Adjusted operating ratio is calculated as operating expenses excluding severance costs included in salaries, wages and employee benefits, certain asset impairments, and amortization of acquisition related intangibles, net of fuel surcharge revenue, as a percentage of operating revenue excluding fuel surcharge revenue.  Adjusted earnings (loss) per diluted share is defined as earnings (loss) per diluted share plus the per share impact of severance costs included in salaries, wages and employee benefits, certain asset impairments, and amortization of acquisition related intangibles, plus or minus the per share tax impact of those adjustments using a statutory income tax rate.  The per share impact of each item is determined by dividing it by the weighted average diluted shares outstanding.  Adjusted operating income (loss) is defined as operating income (loss) excluding severance costs included in salaries, wages and employee benefits, certain asset impairments, and amortization of acquisition related intangibles.

The Company’s chief operating decision-maker focuses on adjusted operating ratio, adjusted earnings (loss) per diluted share and adjusted operating income (loss) as indicators of the Company’s performance from period to period.

Management believes removing the impact of the above described items from the Company’s operating results affords a more consistent basis for comparing results of operations.  Management believes its presentation of adjusted operating ratio, adjusted earnings (loss) per diluted share and adjusted operating income (loss) is useful to investors and other users because it provides them the same information that we use internally for purposes of assessing our core operating performance.

Adjusted operating ratio and adjusted earnings (loss) per diluted share are not substitutes for operating margin or any other measure derived solely from GAAP measures.  There are limitations to using non-GAAP measures such as

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adjusted operating ratio, adjusted earnings (loss) per diluted share and adjusted operating income (loss).  Although management believes that adjusted operating ratio, adjusted earnings (loss) per diluted share and adjusted operating income (loss) can make an evaluation of the Company’s operating performance more consistent because these measures remove items that, in management’s opinion, do not reflect its core operating performance, other companies in the transportation industry may define adjusted operating ratio, adjusted earnings (loss) per diluted share and adjusted operating income (loss) differently.  As a result, it may be difficult to use adjusted operating ratio, adjusted earnings (loss) per diluted share and adjusted operating income (loss) or similarly named non-GAAP measures that other companies may use, to compare the performance of those companies to USA Truck’s performance.

Pursuant to the requirements of Regulation S-K, reconciliations of non-GAAP financial measures to GAAP financial measures have been provided in the tables below.

Consolidated Reconciliations

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
	(in thousands)
Operating revenue	$	123,737		$	133,622		$	250,510		$	267,596
Less: Fuel surcharge revenue		(10,534)			(16,901)			(24,546)			(32,341)
Base revenue	$	113,203		$	116,721		$	225,964		$	235,255
Operating expense	$	122,737		$	131,639		$	251,822		$	261,692
Adjusted for:
Severance costs included in salaries, wages, and employee benefits		(84)			—			(176)			(319)
Asset impairment - land		(137)			—			(137)			—
Amortization of acquisition related intangibles		(340)			(341)			(680)			(704)
Fuel surcharge revenue		(10,534)			(16,901)			(24,546)			(32,341)
Adjusted operating expense	$	111,642		$	114,397		$	226,283		$	228,328
Operating income (loss)	$	1,000		$	1,983		$	(1,312)		$	5,904
Adjusted operating income (loss)	$	1,561		$	2,324		$	(319)		$	6,927
Operating ratio		99.2	%		98.5	%		100.5	%		97.8	%
Adjusted operating ratio		98.6	%		98.0	%		100.1	%		97.1	%

Adjusted (loss) earnings per diluted share

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
(Loss) earnings per diluted share	$	(0.11)	$	0.00	$	(0.40)	$	0.18
Adjusted for:
Severance costs included in salaries, wages and employee benefits		0.01		—		0.02		0.04
Asset impairment - land		0.02		—		0.02		—
Amortization of acquisition related intangibles		0.04		0.04		0.08		0.08
Income tax effect of adjustments		(0.02)		(0.01)		(0.03)		(0.03)
Adjusted (loss) earnings per diluted share	$	(0.06)	$	0.03	$	(0.31)	$	0.27

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Segment Reconciliations

	Three Months Ended						Six Months Ended
Trucking Segment	June 30,						June 30,
	2020			2019			2020			2019
	(in thousands)
Operating revenue	$	87,920		$	96,069		$	180,921		$	190,609
Intersegment activity		707			407			1,701			769
Operating revenue (before intersegment eliminations)		88,627			96,476			182,622			191,378
Less: fuel surcharge revenue (before intersegment eliminations)		(8,083)			(13,034)			(19,371)			(24,799)
Base revenue	$	80,544		$	83,442		$	163,251		$	166,579
Operating expense (before intersegment eliminations)	$	87,451		$	95,639		$	183,133		$	188,933
Adjusted for:
Severance costs included in salaries, wages, and employee benefits		(80)			—			(172)			(319)
Asset impairment - land		(137)			—			(137)			—
Amortization of acquisition related intangibles		(340)			(341)			(680)			(704)
Fuel surcharge revenue		(8,083)			(13,034)			(19,371)			(24,799)
Adjusted operating expense	$	78,811		$	82,264		$	162,773		$	163,111
Operating income (loss)	$	1,176		$	837		$	(511)		$	2,445
Adjusted operating income	$	1,733		$	1,178		$	478		$	3,468
Operating ratio		98.7	%		99.1	%		100.3	%		98.7	%
Adjusted operating ratio		97.8	%		98.6	%		99.7	%		97.9	%

	Three Months Ended						Six Months Ended
USAT Logistics Segment	June 30,						June 30,
	2020			2019			2020			2019
	(in thousands)
Operating revenue	$	35,817		$	37,553		$	69,589		$	76,987
Intersegment activity		2,921			2,022			4,973			4,038
Operating revenue (before intersegment eliminations)		38,738			39,575			74,562			81,025
Less: fuel surcharge revenue (before intersegment eliminations)		(2,618)			(4,087)			(5,695)			(7,929)
Base revenue	$	36,120		$	35,488		$	68,867		$	73,096
Operating expense (before intersegment eliminations)	$	38,914		$	38,429		$	75,363		$	77,566
Adjusted for:
Severance costs included in salaries, wages, and employee benefits		(4)			—			(4)			—
Fuel surcharge revenue		(2,618)			(4,087)			(5,695)			(7,929)
Adjusted operating expense	$	36,292		$	34,342		$	69,664		$	69,637
Operating (loss) income	$	(176)		$	1,146		$	(801)		$	3,459
Adjusted operating (loss) income	$	(172)		$	1,146		$	(797)		$	3,459
Operating ratio		100.5	%		97.1	%		101.1	%		95.7	%
Adjusted operating ratio		100.5	%		96.8	%		101.2	%		95.3	%

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Key Operating Statistics by Segment

	Three Months Ended						Six Months Ended
	June 30,						June 30,
Trucking:	2020			2019			2020			2019
Operating revenue (before intersegment eliminations) (in thousands)	$	88,627		$	96,476		$	182,622		$	191,378
Operating income (loss) (1) (in thousands)	$	1,176		$	837		$	(511)		$	2,445
Adjusted operating income (2) (in thousands)	$	1,733		$	1,178		$	478		$	3,468
Operating ratio (3)		98.7	%		99.1	%		100.3	%		98.7	%
Adjusted operating ratio (4)		97.8	%		98.6	%		99.7	%		97.9	%
Total miles (5) (in thousands)		45,961			44,683			91,680			87,447
Deadhead percentage (6)		13.1	%		12.7	%		13.2	%		13.0	%
Base revenue per loaded mile	$	2.017		$	2.140		$	2.051		$	2.191
Average number of seated tractors		1,943			1,817			1,907			1,792
Average number of available tractors (7)		2,063			1,916			2,018			1,916
Average number of in-service tractors (8)		2,075			1,945			2,039			1,950
Loaded miles per available tractor per week		1,489			1,565			1,517			1,535
Base revenue per available tractor per week	$	3,003		$	3,350		$	3,111		$	3,362
Average loaded miles per trip		501			500			498			493
USAT Logistics:
Operating revenue (before intersegment eliminations) (in thousands)	$	38,738		$	39,575		$	74,562		$	81,025
Operating (loss) income (1) (in thousands)	$	(176)		$	1,146		$	(801)		$	3,459
Adjusted operating (loss) income (2) (in thousands)	$	(172)		$	1,146		$	(797)		$	3,459
Gross margin (9) (in thousands)	$	4,712		$	6,532		$	8,681		$	14,219
Gross margin percentage (10)		12.2	%		16.5	%		11.6	%		17.5	%
Load count (in thousands)		33.4			28.8			60.6			56.5

1) Operating income (loss) is calculated by deducting operating expenses (before intersegment eliminations) from operating revenue (before intersegment eliminations).

2) Adjusted operating income (loss) is calculated by deducting operating expenses (before intersegment eliminations) excluding severance costs included in salaries, wages and employee benefits, certain asset impairments,  and amortization of acquisition related intangibles, net of fuel surcharge revenue from operating revenue (before intersegment eliminations), net of fuel surcharge revenue.

3) Operating ratio is calculated as operating expenses (before intersegment eliminations) as a percentage of operating revenue (before intersegment eliminations).

4) Adjusted operating ratio is calculated as operating expenses (before intersegment eliminations) excluding severance costs included in salaries, wages and employee benefits, certain asset impairments, and amortization of acquisition related intangibles, net of fuel surcharge revenue, as a percentage of operating revenue (before intersegment eliminations) excluding fuel surcharge revenue.

5) Total miles include both loaded and empty miles.

6) Deadhead percentage is calculated by dividing empty miles by total miles.

7) Available tractors are a) all Company tractors that are available to be dispatched, including available unseated tractors, and b) all tractors in the independent contractor fleet.

8) In-service tractors include all of the tractors in the Company fleet (Company-operated tractors) and all the tractors in the independent contractor fleet.

9) Gross margin is calculated by deducting USAT Logistics purchased transportation expense from USAT Logistics operating revenue (before intersegment eliminations).

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10) Gross margin percentage is calculated as USAT Logistics gross margin divided by USAT Logistics operating revenue (before intersegment eliminations).

Results of Operations—Segment Review

Trucking operating revenue

During the three months ended June 30, 2020, Trucking operating revenue (before intersegment eliminations) decreased 8.1% to $88.6 million, compared to $96.5 million for the same period in 2019.  Trucking base revenue (before intersegment eliminations) decreased 3.5% to $80.5 million compared to $83.4 million for the second quarter of 2019.  The decrease in operating revenue (before intersegment eliminations) resulted primarily from a 38.0% decrease in fuel surcharge revenue and a 5.7% decrease in base revenue per loaded mile, offset by 6.9% increase in average number of seated tractors and a 2.9% increase in total miles driven.  

During the six months ended June 30, 2020, Trucking operating revenue (before intersegment eliminations) decreased 4.6% to $182.6 million, compared to $191.4 million for the same period in 2019.  Trucking base revenue (before intersegment eliminations) decreased 2.0% to $163.3 million compared to $166.6 million for the second quarter of 2019.  The decrease in operating revenue (before intersegment eliminations) resulted primarily from a 21.9% decrease in fuel surcharge revenue and a 6.4% decrease in base revenue per loaded mile, offset by a 6.4% increase in average number of seated tractors and a 4.8% increase in total miles driven.  

Trucking operating income (loss)

For the second quarter of 2020, Trucking reported operating income of $1.2 million compared to operating income of $0.8 million for the same period in 2019.  This increase was primarily driven by a 8.6% decrease in operating expenses (before intersegment eliminations), offset by the 8.1% decrease in operating revenue (before intersegment eliminations) discussed above.

For the six months ended June 30, 2020, Trucking reported an operating loss of $0.5 million compared to operating income of $2.4 million for the same period in 2019.  This change was primarily the result of the decreased base revenue per loaded mile discussed above, offset by a 3.1% decrease in operating expenses (before intersegment eliminations).

USAT Logistics operating revenue

For the three months ended June 30, 2020, USAT Logistics operating revenue (before intersegment eliminations) decreased 2.1% to $38.7 million compared to $39.6 million for the same period in 2019.  The year-over-year change in operating revenue (before intersegment eliminations) was the result of a 15.4% decrease in revenue per load, offset by a 15.7% increase in load volume.

For the six months ended June 30, 2020, USAT Logistics operating revenue (before intersegment eliminations) decreased 8.0% to $74.6 million compared to $81.0 million for the same period in 2019.  The year-over-year change in operating revenue (before intersegment eliminations) was the result of a 14.2% decrease in revenue per load, offset by a 7.3% increase in load volume.

USAT Logistics operating (loss) income

USAT Logistics reported an operating loss of $0.2 million in the second quarter of 2020, a decrease of $1.3 million, or 115.4%, compared to operating income of $1.1 million for the comparable quarter in 2019.  This decrease was driven largely by 2.1% decrease in operating revenue (before intersegment eliminations), which was compounded by a 430 basis point drop in gross margin.

For the six months ended June 30, 2020, USAT Logistics reported an operating loss of $0.8 million, a decrease of $4.3 million, or 123.2%, compared to operating income of $3.5 million for the comparable period in 2019.  This decrease was driven primarily by an 8.0% decrease in operating revenue (before intersegment eliminations), which was compounded by 590 basis point drop in gross margin.  

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Consolidated Operating Expenses

The following table summarizes the consolidated operating expenses and percentage of consolidated operating revenue, consolidated base revenue and the percentage increase or decrease in the dollar amounts of those items compared to the prior year.

	Three Months Ended June 30,
	2020						2019						% change
					Adjusted						Adjusted
					Operating						Operating		2020 to
	Operating Revenue				Ratio (1)		Operating Revenue				Ratio (1)		2019
	$		%		%		$		%		%		%
Operating Expenses:	(dollars in thousands)
Salaries, wages and employee benefits	$	33,636	27.2	%	29.6	% (1)	$	33,806	25.3	%	29.0	% (1)	(0.5)	%
Fuel and fuel taxes		8,082	6.5		(2.2)	(1)(2)		14,102	10.6		(2.4)	(1)(2)	(42.7)
Depreciation and amortization		10,034	8.1		8.6	(1)		9,125	6.8		7.5	(1)	10.0
Insurance and claims		4,009	3.2		3.5			7,160	5.4		6.1		(44.0)
Equipment rent		2,336	1.9		2.1			2,568	1.9		2.2		(9.0)
Operations and maintenance		8,606	7.0		7.6			8,481	6.3		7.3		1.5
Purchased transportation		49,276	39.8		43.5			49,072	36.7		42.1		0.4
Operating taxes and licenses		1,349	1.1		1.2			1,311	1.0		1.1		2.9
Communications and utilities		906	0.7		0.8			719	0.5		0.6		26.0
(Gain) loss on disposal of assets, net		(16)	0.0		0.0			141	0.1		0.1		111.3
Asset impairments		588	0.5		0.4	(1)		367	0.3		0.3		60.2
Other		3,931	3.2		3.5			4,787	3.6		4.1		(17.9)
Total operating expenses	$	122,737	99.2	%	98.6	%	$	131,639	98.5	%	98.0	%	(6.8)	%

	Six Months Ended June 30,												%
	2020						2019						change
					Adjusted						Adjusted
					Operating						Operating		2019 to
	Operating Revenue				Ratio (1)		Operating Revenue				Ratio (1)		2018
	$		%		%		$		%		%		%
Operating Expenses:	(dollars in thousands)
Salaries, wages and employee benefits	$	69,481	27.7	%	30.7	% (1)	$	69,896	26.1	%	29.6	% (1)	(0.6)	%
Fuel and fuel taxes		19,945	8.0		(2.0)	(1)(2)		27,733	10.4		(1.9)	(1)(2)	(28.1)
Depreciation and amortization		20,045	8.0		8.6	(1)		17,943	6.7		7.3	(1)	11.7
Insurance and claims		9,866	3.9		4.4			14,440	5.4		6.1		(31.7)
Equipment rent		4,628	1.8		2.0			5,288	2.0		2.3		(12.5)
Operations and maintenance		17,502	7.0		7.7			15,754	5.9		6.7		11.1
Purchased transportation		97,090	38.8		43.0			97,353	36.3		41.4		(0.3)
Operating taxes and licenses		2,508	1.0		1.1			2,428	0.9		1.0		3.3
Communications and utilities		1,719	0.7		0.7			1,486	0.6		0.6		15.7
Loss (gain) on disposal of assets, net		22	0.0		0.0			(4)	0.0		0.0		(650.0)
Asset impairments		588	0.2		0.2	(1)		367	0.1		0.2	(1)	60.2
Other		8,428	3.4		3.7			9,008	3.4		3.8		(6.4)
Total operating expenses	$	251,822	100.5	%	100.1	%	$	261,692	97.8	%	97.1	%	(3.8)	%

1) Adjusted operating ratio is calculated as the applicable operating expense excluding severance costs included in salaries, wages, and employee benefits, certain asset impairments, and amortization of acquisition related intangibles, net of fuel surcharge revenue, as a percentage of operating revenue excluding fuel surcharge revenue.

2) Calculated as fuel and fuel taxes, net of fuel surcharge revenue.

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Salaries, wages and employee benefits

Salaries, wages and employee benefits consist primarily of compensation for all employees and are primarily affected by the total number of miles driven by Company drivers, the rate per mile paid to Company drivers, employee benefits and compensation and benefits paid to non-driver employees.  

Salaries, wages and employee benefits expense was largely flat for the three and six months ended June 30, 2020, when compared to the same periods in 2019.  The rate of compensation paid to Company drivers per mile has increased in recent periods and we expect this cost will continue to fluctuate in future periods due to driver pay increases, offset by the percentage of Trucking miles operated by independent contractors instead of Company employed drivers.

Fuel and fuel taxes

Fuel and fuel taxes consist primarily of diesel fuel expense for Company-owned tractors and fuel taxes.  The primary factors affecting the Company’s fuel expense are the cost of diesel fuel, the fuel economy of Company equipment and the number of miles driven by Company drivers.  The decrease in fuel and fuel taxes for the three and six months ended June 30, 2020 was largely the result of 22.2% and 12.8% decreases, respectively, in the price per gallon of diesel fuel, offset by 2.9% and 4.8% increases, respectively, in total miles driven when compared to the same periods in 2019.  The Company has undertaken fuel efficiency initiatives, such as installing trailer skirts, idle control, more fuel-efficient engines and implementing driver training programs, which have contributed to improvements in our fuel expense on a cost per Company tractor mile basis.

The Company continues to pursue fuel efficiency initiatives, acquiring newer, more fuel-efficient revenue equipment and implementing focused driver training programs, which have contributed to improvements in our fuel expense on a cost per Company tractor mile basis.  The Company expects to continue managing its idle time and truck speeds and partnering with customers to align fuel surcharge programs to recover a fair portion of rising fuel costs.  Looking ahead, the Company’s net fuel expense is expected to fluctuate as a percentage of revenue based on factors such as diesel fuel prices, percentage recovered from fuel surcharge programs, empty mile percentage, the percentage of revenue generated from independent contractors and the success of fuel efficiency initiatives.

Depreciation and amortization and equipment rent

Depreciation and amortization of property and equipment consists primarily of depreciation for Company-owned tractors and trailers, amortization of revenue equipment financed with finance leases, and amortization of intangible assets.  The primary factors affecting this expense include the number and age of Company tractors and trailers, the acquisition cost of new equipment and the salvage values and useful lives assigned to the equipment. Equipment rent expenses are those related to revenue equipment under operating leases.  These largely fixed costs fluctuate as a percentage of base revenue primarily with increases and decreases in average base revenue per tractor and the percentage of base revenue contributed by Trucking versus USAT Logistics.  For the three and six months ended June 30, 2020 equipment rent expense decreased 9.0% and 12.5%, respectively, when compared to the 2019 periods.

Depreciation and amortization expense increased as a percentage of both operating and base revenue for the three and six months ended June 30, 2020, when compared to the same periods in 2019, due in part to the lower revenues as discussed previously.  During the first quarter of 2020, the Company lowered the salvage value of its tractor fleet from 30% to 25% to better reflect current estimates of the value of such equipment upon its retirement.  The Company believes that these changes more accurately reflect the value of the revenue equipment on the accompanying condensed consolidated balance sheets.

The Company intends to continue its focus on improving asset utilization, matching customer demand, growing its independent contractor fleet and strengthening load profitability initiatives.  Further, the acquisition costs of new revenue equipment could increase due to the inclusion of improved safety and fuel efficiency features.  

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Insurance and claims

Insurance and claims expense consists of insurance premiums and the accruals the Company makes for estimated payments and expenses for claims for third-party bodily injury, property damage, cargo damage and other casualty events.  The primary factors affecting the Company’s insurance and claims expense are the number of miles driven by its Company drivers and independent contractors, the frequency and severity of accidents, trends in the development factors used in the Company’s actuarial accrual, developments in prior-year claims and insurance premiums and self-insured amounts.  For  the three and six months ended June 30, 2020, insurance and claims expense decreased in dollars spent and as a percentage of both operating and base revenue compared to the prior year periods, largely due to the favorable claims loss history and a decrease in litigated claims.  

The Company expects insurance and claims expense to continue to be volatile over the long-term and in its October 2019 annual renewal experienced a significant rate increase.  In addition, recently, insurance carriers have generally raised premiums for many businesses, including those in the trucking industry, and the trucking industry is experiencing a decline in the number of carriers and underwriters that write insurance policies or that are willing to provide insurance for trucking companies, and the necessity to go offshore for insurance needs has increased.  These factors may cause the Company’s insurance and claims expense to increase if it has a similar experience at renewal or replacement and the Company could find it necessary to raise its self-insured retention levels or decrease its aggregate coverage limits.  The Company continues to evaluate various options to prevent additional rate increases in its 2020 insurance renewal.  

Operations and maintenance

Operations and maintenance expense consists primarily of vehicle repairs and maintenance, general and administrative expenses and other costs.  Operating and maintenance expenses are primarily affected by the age of the Company-operated tractors and trailers, the number of miles driven in a period and, to a lesser extent, by efficiency measures in the Company’s maintenance facilities.  Operations and maintenance expense increased for the three and six months ended June 30, 2020, when compared to the same periods in 2019 due to increased costs of maintaining our fleet.  

Purchased transportation

Purchased transportation consists of the payments the Company makes to independent contractors, railroads and third-party carriers that haul loads brokered to them by the Company, including fuel surcharge reimbursement paid to such parties.  For the three and six months ended June 30, 2020, purchased transportation expense was primarily flat.

The Company is endeavoring to grow its independent contractor fleet as a percentage of its total fleet and growing USAT Logistics, which if successful, could further increase purchased transportation expense, particularly if the Company needs to pay independent contractors more to stay with the Company in light of regulatory changes.  In periods of increasing independent contractor capacity, the expected increases in compensation expense are shifted from employee driver wages and related expenses to the “Purchased transportation” line item, net of their fuel expense, maintenance and capital expenditures.

(Gain) loss on disposal of assets, net

During the three months ended June 30, 2020, the Company experienced a small net gain on disposal of assets, net compared to a loss in the same period in 2019.  For the six months ended June 30, 2020, we experienced a small net loss compared to a small gain in the same period in 2019.  For both periods, the changes were due primarily to continued fluctuations in the used equipment market.  Management believes this variability will continue through the remainder of this year.

Other expenses

The decrease in other expenses for the three and six months ended June 30, 2020 was primarily due to a decrease in driver recruiting costs.

Interest expense, net

For the three and six months ended June 30, 2020, interest expense, net decreased primarily due to decreased outstanding borrowings on our credit facility.  See Note 6 to the condensed consolidated financial statements for further discussion of the Company’s Credit Facility.

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Income tax (benefit) expense

During the three months ended June 30, 2020 and 2019, the Company’s effective tax rate was 211.4% and 99.5%, respectively.  During the six months ended June 30, 2020 and 2019, the Company’s effective tax rate was 19.8% and 33.5%, respectively.  The Company’s effective tax rate, when compared to the federal statutory rate of 21%, is primarily affected by state income taxes, net of federal income tax effect, and permanent differences, the most significant of which is the effect of the partially non-deductible per diem pay structure for our drivers.  Drivers may elect to receive non-taxable per diem pay in lieu of a portion of their taxable wages.  This per diem program increases the Company’s drivers’ net pay per mile, after taxes, while decreasing gross pay, before taxes. Per diem pay is partially non-deductible by the Company under current IRS regulations.  As a result, salaries, wages and employee benefits costs are slightly lower and effective income tax rates are higher than the statutory rate.  Due to the partially non-deductible effect of per diem pay, the Company’s tax rate will change based on fluctuations in earnings (losses) and in the number of drivers who elect to receive this pay structure.  Generally, as pretax income or loss increases, the impact of the driver per diem program on the Company’s effective tax rate decreases, because aggregate per diem pay becomes smaller in relation to pretax income or loss, while in periods where earnings are at or near breakeven the impact of the per diem program on the Company’s effective tax rate can be significant.  Due to the effect of the non-deductible per diem payments, the Company’s tax rate will fluctuate in future periods based on fluctuations in earnings (losses) and in the number of drivers who elect to participate in the per diem program.

During the six month period ended June 30, 2020 our effective tax rate was also affected by changes stemming from the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted in 2020, which allows a 5 year federal net operating loss carryback for federal income tax purposes to tax periods where the federal statutory rate was 35%, resulting in a tax benefit.  During the six months ended June 30, 2020 and 2019, the Company’s tax rate was negatively affected by vesting of equity-based compensation at a lower stock price than the price at which it was granted, as well as a non-deductible officer compensation, resulting in an increase to tax expense.

The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period.  We determined that since small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate.  As such, we have used a cut-off method to calculate taxes for the three and six months ended June 30, 2020.

Seasonality

In the trucking industry, revenue typically follows a seasonal pattern for various commodities and customer businesses.  While peak freight demand has historically occurred in the months of September, October and November, no assurance can be provided that our current year experience will reflect this.  After the December holiday season and during the remaining winter months, freight volumes are typically lower as many customers reduce shipment levels.  Operating expenses have historically been higher in the winter months due primarily to decreased fuel efficiency, increased cold weather-related maintenance costs of revenue equipment and increased insurance and claims costs attributed to adverse winter driving conditions.  Revenue can also be impacted by weather, holidays and the number of business days that occur during a given period, as revenue is directly related to the available working days of shippers.

Inflation

Most of the Company’s operating expenses are inflation sensitive, and as such, are not always able to be offset higher costs through increases in revenue per mile and cost control efforts.  The effect of inflation-driven cost increases on overall operating costs is not expected to be greater for the Company than for its competitors.

Fuel Availability and Cost

The trucking industry is dependent upon the availability of fuel. In the past, fuel shortages or increases in fuel taxes or fuel costs have adversely affected profitability and may continue to do so.  USA Truck has not experienced difficulty in maintaining necessary fuel supplies, and in the past has generally been able to partially offset increases in fuel costs and fuel taxes through increased freight rates and through a fuel surcharge that increases incrementally as the average price of fuel increases above an agreed upon baseline price per gallon.  Typically, the Company is not able to fully recover increases in fuel prices through freight rate increases and fuel surcharges, primarily because those items are not available with respect to empty and out-of-route miles and idling time, for which the Company generally does not receive

26

compensation from customers.  Additionally, most fuel surcharges are based on the average fuel price as published by the DOE for the week prior to the shipment, meaning the Company typically bills customers in the current week based on the previous week’s applicable index.  Accordingly, in times of increasing fuel prices, the Company does not recover as much as it is currently paying for fuel.  In periods of declining prices, for a short period of time the inverse is true.  Overall, for three and six months ended June 30, 2020 and 2019, average diesel fuel prices per gallon as reported by the DOE, decreased 22.2% and 12.8%, compared to the same periods in 2019.

As of June 30, 2020, the Company did not have any long-term fuel purchase contracts, and has not entered into any fuel hedging arrangements.

Equity

As of June 30, 2020, the Company had total stockholders’ equity of $75.5 million and total debt and lease liabilities of $189.5 million, resulting in a total debt, less cash, to total capitalization ratio of 71.5% compared to 70.9% as of December 31, 2019.

Purchases and Commitments

The Company routinely monitors equipment acquisition needs and adjusts purchase schedules from time to time based on analysis of factors such as new equipment prices, the condition of the used equipment market, demand for freight services, prevailing interest rates, technological improvements, fuel efficiency, equipment durability, equipment specifications, operating performance and the availability of qualified drivers.

As of June 30, 2020, the Company had no noncancellable commitments for the acquisition of revenue equipment.  

During July 2020, the Company entered into an agreement to take delivery of 189 tractors through a lease agreement.

Liquidity and Capital Resources

USA Truck’s business has required, and will continue to require, significant capital investments.  In the Company’s Trucking segment, where capital investments are the most substantial, the primary investments are in revenue equipment and to a lesser extent, in technology and working capital.  In the Company’s USAT Logistics segment, the primary investments are in technology and working capital.  USA Truck’s primary sources of liquidity have been funds provided by operations, borrowings under the Company’s Credit Facility, sales of used revenue equipment, and proceeds from finance and operating leases.  Based on expected financial conditions, net capital expenditures, results of operations and related net cash flows and other sources of financing, management believes the Company’s sources of liquidity to be adequate to meet current and projected needs.

The Credit Facility contains a single financial covenant, which requires a consolidated fixed charge coverage ratio of at least 1.0 to 1.0 that is triggered in the event excess availability under the Credit Facility falls below 10% of the lenders’ total commitments.  Also, certain restrictions regarding the Company’s ability to pay dividends, make certain investments, prepay certain indebtedness, execute share repurchase programs and enter into certain acquisitions and hedging arrangements are triggered in the event excess availability under the Credit Facility falls below 20% of the lenders’ total commitments.  

As of June 30, 2020, the Company had $7.4 million in letters of credit outstanding and had approximately $38 million available to borrow under the Credit Facility.  Net of cash, debt represented 71.5% of total capitalization.  Fluctuations in the outstanding balance and related availability under the Credit Facility are driven primarily by cash flows from operations and the timing and nature of property and equipment additions that are not funded through other sources of financing, as well as the nature and timing of receipt of proceeds from disposals of property and equipment.

On April 20, 2020, the Company permanently reduced the revolving credit commitment under the Credit Agreement by $55.0 million such that the revolving credit commitment is $170.0 million.  The reduction in the revolving credit commitment brought the Company’s excess availability above the 20% threshold for restrictions by lowering the threshold to $34.0 million.  This change is anticipated to reduce the fees paid by the Company in connection with such commitment by approximately $0.1 million annually.

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Cash Flows

The following table summarizes the sources (uses) of cash for each of the periods presented:

	Cash Flow	Six Months Ended June 30,
	Category	2020		2019
Sources of cash:		(in thousands)
Operating activities - net	Operating	$	14,406	$	15,754
Proceeds from sale of property and equipment	Investing		1,459		7,643
Borrowings under long-term debt	Financing		33,200		53,700
Proceeds from obligation under finance lease	Financing		—		10,471
Uses of cash:
Acquisition of Davis Transfer Company (net of cash)	Investing		—		(305)
Capital expenditures	Investing		(9,809)		(25,209)
Payments of long-term debt	Financing		(26,440)		(55,249)
Principal payments on financing lease obligations	Financing		(11,366)		(6,375)
Payments on obligation under finance lease	Financing		(1,052)		(219)
Other sources - net	Financing		(403)		(1,002)
Decrease in cash		$	(5)	$	(791)

Operating activities

Our net cash provided by operating activities in the six months ended June 30, 2020 decreased modestly from the comparable 2019 period primarily due to lower net income, offset by an increase in depreciation and amortization and changes in accounts payable and accrued liabilities.

Debt and Lease Obligations

See Notes 6 and 7 to the condensed consolidated financial statements for further discussion of the Company’s Credit Facility, insurance financing, and lease obligations.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  The Company bases its assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time its financial statements are prepared. Actual results could differ from those estimates, and such differences could be material.  In 2020, the only change to the Company’s critical accounting policies and estimates, compared to those disclosed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 related to the change in salvage value of the Company’s tractor fleet.   See Note 1 to the condensed consolidated financial statements for further discussion of the change in estimate.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4. CONTROLS AND PROCEDURES

The Company has established disclosure controls and procedures that are designed to ensure that relevant material information, including information pertaining to any consolidated subsidiaries, is made known to the officers who certify the financial reports and to other members of senior management and the board of directors.  Management, with the participation of the Principal Executive Officer (the “PEO”) and the Principal Financial Officer (the “PFO”) conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).  Based on this evaluation, the PEO and PFO have concluded that as of June 30, 2020 the Company’s disclosure controls and procedures were effective at a reasonable assurance level to ensure that the information required to be disclosed in the reports filed or submitted by the Company under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and

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(ii) accumulated and communicated to management, including the PEO and PFO, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting that occurred during the quarter ended June 30, 2020 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management has confidence in the Company’s internal controls and procedures.  Nevertheless, management, including the PEO and PFO, understand that the Company’s disclosure controls and procedures and its internal controls cannot prevent all errors or intentional fraud.  An internal controls system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of such internal controls are met.  Further, the design of an internal controls system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all internal controls systems, no evaluation of controls can provide absolute assurance that all controls issues and instances of fraud, if any, have been, or will be, detected.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is party to routine litigation incidental to its business, primarily involving claims for personal injury and property damage incurred in the transportation of freight.  The Company maintains liability insurance to cover liabilities in excess of certain self-insured retention levels.  Though management believes these claims to be immaterial to the Company’s long-term financial position, adverse results of one or more of these claims could have a material adverse effect on the Company’s financial position or results of operations in any given reporting period.

ITEM 1A. RISK FACTORS

While the Company attempts to identify, manage and mitigate risks and uncertainties associated with its business, some level of risk and uncertainty will always be present.  In addition to the information set forth below, the section entitled “Item 1A, Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, describes some of the risks and uncertainties associated with the Company’s business.  These risks and uncertainties have the potential to materially affect the Company’s business, financial condition, results of operations, cash flows, projected results and future prospects.

The recent novel coronavirus (COVID-19) global pandemic, or any other future global pandemic, could adversely affect our business operations, financial performance, results of operations and liquidity, the extent of which is uncertain and difficult to predict.

In late 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China, which has since spread globally.  In March 2020, the World Health Organization declared COVID-19 a global pandemic.  Further, the COVID-19 outbreak has resulted in government authorities in the United States and around the world implementing numerous measures to try to reduce the spread of COVID-19, such as travel bans and restrictions, quarantines, shelter in place or total lock-down orders and business limitations and shutdowns.  As a result of the COVID-19 outbreak and the related responses from government authorities, our business operations, financial performance, results of operations and liquidity may be adversely impacted in a number of ways, including, but not limited to, the following:

● disruptions to our operations, including a shutdown of one or more of our locations; restrictions on certain of our operations and other important business activities;

● reduced demand for our services due to disruptions to the businesses and operations of our customers;

● the ability of our customers to pay for our services;

● a slowdown or stoppage in the supply chain of our equipment, fuel, supplies and maintenance services;

● limitations on employee resources and availability, including due to sickness, government restrictions, or the desire of employees to avoid contact with groups of people;

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● a change in the classification of our operations as an essential business or other government orders or restrictions that could limit our movements and shipping operations;

● an increase in the cost or the difficulty to obtain debt or equity financing could affect our financial condition or our ability to fund operations or future investment opportunities; and

● an increase in regulatory restrictions or continued market volatility could hinder our ability to execute strategic business activities, as well as negatively impact our stock price.

The spread of COVID-19 has caused us to modify our business practices (including, employee work locations) and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, partners, and suppliers.  There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, and our ability to perform critical functions could be harmed.

Additionally, COVID-19 could negatively affect our internal controls over financial reporting as a portion of our work force has been and may continue to be required or determined to work from home and therefore new processes, procedures, and controls could be required to respond to changes in our business environment.  Further, should any key employees become ill from COVID-19 and unable to work, the attention of the management team could be diverted.

The potential effects of COVID-19 may also impact many of our other risk factors discussed in in Part I, Item 1A, Risk Factors, in our Annual report on Form 10-K for the year ended December 31, 2019.  The degree to which COVID-19 impacts our business operations, financial performance and results of operations will depend on future developments, which are highly uncertain, continuously evolving and cannot be predicted, including, but not limited to, the duration and spread of the COVID-19 outbreak, its severity, the actions to contain the virus or treat its impact and how quickly and to what extent normal economic conditions can resume.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number		Exhibit
3.1		Restated and Amended Certificate of Incorporation of the Company as currently in effect, including all Certificates of Amendment thereto (incorporated by reference to Exhibit 3.1 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2013).
3.2		Bylaws of USA Truck Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on March 24, 2017).
4.1		Specimen certificate evidencing shares of the common stock, $.01 par value, of USA Truck Inc. (incorporated by reference to Exhibit 4.1 of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2017).
10.1	*#	Letter Agreement, dated April 21, 2020, between the Company and Zachary B. King
10.2	*#	Executive Severance and Change in Control Agreement between the Company and Zachary B. King, dated April 21, 2020
31.1	#	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	#	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	##	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	##	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline	XBRL Taxonomy Extension Schema Document.
101.CAL	Inline	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline	XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover page Interactive Data File formatted as Inline XBRL (contained in Exhibit 101)

References:

*	Management contract or compensatory plan, contract or arrangement.
#	Filed herewith.
##	Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			USA Truck Inc.
			(Registrant)
Date:	July 28, 2020	By:	/s/ James D. Reed
			(Signature)
			James D. Reed
			President and Chief Executive Officer
Date:	July 28, 2020	By:	/s/ Zachary B. King
			(Signature)
			Zachary B. King
			Senior Vice President and Chief Financial Officer

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EX-10.1

EXHIBIT 10.1

April 21, 2020

Mr. Zachary King

Transmitted via E-mail: zachary.king@usa-truck.com

Dear Zach,

On behalf of USA Truck, Inc. (the "Company"), I am pleased to offer you promotion to the position of Senior Vice President and Chief Financial Officer, reporting to the Chief Executive Officer and President of the Company, effective April 21, 2020. The following outlines the terms of employment, but does not constitute a contract of employment or a guarantee of employment. This offer is subject to approval by the Company's Board of Directors and your compensation package as outlined is subject to approval of the Executive Compensation Committee of the Company's Board of Directors (the "Committee").

Base Salary. Your starting base salary will be $20,000.00 per month annualized to $240,000, less applicable taxes, deductions, and withholdings, paid monthly and subject to annual review. The Company's regularly scheduled pay days are currently on the last day of every month.

Key Management Incentive Plan. You will participate in the established Key Management Incentive Plan, subject to the approval of the Committee and the Board of Directors. For 2020 the Plan consists of the following for your position:

Cash Incentive. A target cash incentive of 50% of your annualized base salary, pro-rated based on the period of time you are employed at the Company as Senior Vice President and Chief Financial Officer during 2020 and less applicable taxes, deductions and withholdings. Target incentives do not constitute a promise of payment. To qualify for the incentive bonus, you must remain employed with the Company through the date that the incentive bonus is paid (as specified in the 2020 Cash Bonus Plan). Your actual plan payout will depend on the Company's and your individual performance relative to pre-established goals, subject to and governed by the terms and requirements of the 2020 Cash Bonus Plan as determined by the Committee. The maximum achievable under the plan is 175% of your target. You are eligible for this pro-rated incentive bonus pursuant to the 2020 Cash Bonus Plan.

Equity Incentive. Equity Incentive. A target equity grant of restricted shares of the Company's common stock equal to up to 75% of your annualized base salary for 2020 under the 2020 Equity Incentive Plan (the "2020 EIP") to be established by the Committee. The number of restricted shares awarded will be based upon your annualized base salary and the closing price of the Company's common stock on the award date. 40% time-based and the balance will be performance-based. The time-based portion is expected to have a four (4) year ratable vesting period, and the performance-based portion is expected to vest at the completion of three (3) years, depending upon performance relative to goals established by the Committee. The maximum achievable for the performance-based portion of the 2020 EIP is 175% of your target for the performance-based portion of the 2020 EIP. All incentive compensation (whether cash or equity) for all employees, including you, is subject to the discretion of the Committee.

Upon the occurrence of a Payment Trigger described in subparagraph (ii) of Paragraph (L) of Section 1 of the Executive Severance and Change in Control Agreement attached hereto as Exhibit A that you will have the opportunity to sign, all unvested shares subject to time-based vesting would become fully vested and any unvested shares subject to performance-based vesting would vest in accordance with the award agreement relating to such shares. You are eligible for this pro-rated incentive bonus pursuant to the 2020 Equity Incentive Plan.

Grant of Restricted Shares. You will be eligible, under the Company's 2014 Omnibus Incentive Plan, for a one-time Restricted Stock Award (the "Award"), on the terms and conditions set forth in the Award Notice and the 2014 Omnibus Incentive Plan, of 10,934 time-based Restricted Shares of the Company's Common Stock. The Restricted Shares will be subject to the terms, conditions and restrictions set forth in the Award Notice and will vest as set forth in the Award Notice. These shares are time-based on a four (4) year ratable vesting period.

Obligations. You may be required to serve as an officer and/or director of one or more subsidiaries of the Company, for which you will receive no additional compensation.

Benefits. A significant part of your total compensation at the Company is derived from a competitive benefits package for employees. Eligible Company employees may participate in health insurance benefits (medical, dental, and vision), life insurance, short term and long term disability, the Company's Employee Stock Purchase Plan, 401(k) Plan, and Flexible Spending Plan. All benefits are subject to the plan documents and eligibility requirements.

Paid Time Off. You will receive five (5) weeks of paid time off per year.

Business Travel and Expense. You will be expected to travel in connection with your employment. The Company will reimburse you for reasonable business expenses incurred in connection with your employment and in accordance with the Company's Business Entertainment and Travel Policy.  You will be provided a laptop and cellular phone at the Company's expense.

Confidential Information or Trade Secrets. You will observe all rules, regulations, and security requirements of the Company concerning the safety of persons and property. You agree that you will comply with the Company's employee handbook, Code of Business Conduct and Ethics Policy, the Open Door Policy, the Whistleblower Policy, the Stock Ownership and Anti-Hedging and Pledging Policy, the Clawback Policy, and any other policies of the Company as they relate to employees, officers, or directors of the Company.

Executive Severance and Change in Control Agreement. You will have the opportunity to enter into an Executive Severance and Change in Control Agreement with the Company in the form of Exhibit A attached hereto and incorporated by reference herein.

Employment At-Will. This letter does not create an express or implied contract of employment or any other contractual commitment. This letter contains the complete, final, and exclusive embodiment of the understanding between you and the Company regarding the terms of your employment and supersedes in

all respects any prior or other agreement or understanding, written or oral, between you and the Company with respect to the subject matter of this letter. Your employment relationship with the Company is on an at-will basis, which means that either you or the Company may terminate the employment relationship at any time for any reason or no reason, consistent with applicable law.

Notwithstanding the terms of this letter, the Company shall have the right change its compensation, welfare, benefit, incentive, and employment plans, policies, and terms from time to time in its sole discretion.

You represent and warrant that your signing of this letter and the performance of your obligations under it (including, without limitation, your employment with the Company and your performance of services for the Company) will not breach or be in conflict with any covenant not to compete and/or similar obligations by which you are or may be bound. You also agree that you will not disclose to or use on behalf of the Company any proprietary information of another person or entity without that person's or entity's consent.

Please review and acknowledge your acceptance of the terms of this letter by signing below and faxing or emailing the signed letter to my attention.

Sincerely,

/s/ James D. Reed

James Reed

President and Chief Executive Officer

I accept this offer of promotion with USA Truck, Inc. and agree to the terms and conditions outlined in the letter.

/s/ ZK	04/21/2020
Signature	Date
Zachary King
Full Name

Exhibit A

[Executive Severance and Change In Control

Agreement Attached]

EX-10.2

EXHIBIT 10.2

EXECUTIVE SEVERANCE AND CHANGE IN CONTROL AGREEMENT

This Executive Severance and Change in Control Agreement (this “Agreement”), dated as of April 21, 2020 is made by and between USA Truck, Inc., a Delaware corporation (as hereinafter defined, the “Company”), and Zachary King, Senior Vice President and Chief Financial Officer of the Company (as hereinafter defined, the “Executive”).

WHEREAS, the Company and the Executive have executed the Employment Offer Letter by and between the Company and the Executive dated April 21, 2020 (the “Employment Offer Letter”); and

WHEREAS, the Company and the Executive desire to set forth the circumstances under which the Executive may receive payments under this Agreement.

NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows:

1. Defined Terms.

For purposes of this Agreement, the following terms shall have the meanings indicated below:

(A)“Board” shall mean the Board of Directors of the Company, as constituted from time to time.

(B)“Cause” for termination by the Company of the Executive’s employment shall mean (i) failure by the Executive to perform the essential functions of the Executive’s position with the Company, other than any failure resulting from the Executive’s incapacity due to physical or mental disability; (ii) failure to comply with any lawful directive by the Board; (iii) a material violation by the Executive of the corporate governance guidelines, code of ethics, insider trading policy, governance policy, or other policy of the Company; (iv) a breach of any fiduciary duty to Company; (v) misconduct in the course and scope of employment by the Executive that is injurious to the Company, from a monetary or reputational standpoint; (vi) any attempt to willfully obtain any personal profit from any transaction which is adverse to the interests of the Company or any of its subsidiaries and in which the Company or any of its subsidiaries has an interest or any other act of fraud or embezzlement against the Company, any of its subsidiaries or any of its customers or suppliers; (vii) a breach by the Executive of any of the covenants contained in Sections 14, 15, and 16 of this Agreement; (viii) the repeated use of alcohol by the Executive that interferes with the Executive’s duties, the use of illegal drugs by the Executive, or a violation by the Executive of the drug and/or alcohol policies of the Company; (ix) violation of any applicable law, rule or regulation, including without limitation the Sarbanes-Oxley Act of 2002 or other federal or state securities law, rule, or regulation; or (x) the conviction or plea of guilty or nolo contendere to a felony or a misdemeanor involving moral turpitude. With respect to subsections (i), (ii) and (iii) above, the Executive shall be notified in writing (including via email) of any alleged failure, breach or violation, such notice shall specify in reasonable detail the facts and circumstances claimed to constitute Cause under subsections (i), (ii) or (iii) as applicable, and Executive shall be given at least fifteen (15) calendar days to remedy or cure any failure, breach or violation, unless such failure, breach or violation cannot be cured in the Company’s sole judgment. For purposes of this definition following a Change in Control, the Board’s determination of “Cause” must be made in good faith.

(C)A “Change in Control” shall mean the occurrence of any of the following occurring after the date of this Agreement:

(i)Any “Person” as defined in Section 3(a)(9) of the Exchange Act, and as used in Section 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act (but excluding the Company and any employee benefit plan sponsored or maintained by the Company (including any trustee of such plan acting as trustee)), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities (other than indirectly as a result of the Company’s redemption of its own securities); or

(ii)The consummation of any merger or other business combination of the Company, a sale of more than 50% of the Company’s assets, the liquidation or dissolution of the Company or any combination of one or more of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which either (x) the stockholders of the Company and any trustee or fiduciary of any Company employee benefit plan immediately prior to the Transaction own more than 50% of the voting power, directly or indirectly, of (A) the surviving corporation in any such merger or other business combination; (B) the purchaser of or successor to the Company’s assets; (C) both the surviving corporation and the purchaser in the event of any combination of Transactions; or (D) the parent company owning 100% of such surviving corporation, purchaser or both the surviving corporation and the purchaser, as the case may be ((A), (B), (C) or (D), as applicable, the “Surviving Entity”) or (y) the Incumbent Directors, as defined below, shall continue to serve as a majority of the board of directors of the Surviving Entity without an agreement or understanding that such Incumbent Directors will later surrender such majority; or

(iii)Within any twenty-four (24)-month period, the individuals who were directors immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, including any Surviving Entity. For this purpose, any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of, or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors (so long as such director was not nominated by a Person who commenced or threatened to commence an election contest or proxy solicitation by or on behalf of a Person (other than the Board) or who has entered into an agreement to effect a Change in Control or expressed an intention to cause such a Change in Control).

(D)“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(E)“Company” shall mean USA Truck, Inc. and any successor to its business or assets, by operation of law or otherwise.

(F)“Constructive Termination” shall mean the occurrence of any of the following, without the  Executive’s express written consent,  at any time within twelve (12) months following   a Change in Control:

(i)material diminution in the overall scope of the Executive’s duties, authorities and responsibilities from those held by the Executive immediately prior to the time of a Change in Control;

(ii)geographic relocation of the Executive’s assigned principal business location to a location greater than forty (40) miles from the place of the Executive’s principal business location immediately prior to the time of a Change in Control; or

(iii)diminution by ten percent (10%) or more of the Executive’s annual base salary or target bonus in effect immediately prior to the time of a Change in Control.

(G)“Date of Termination” shall have the meaning stated in Paragraph (B) of Section 5 hereof.

(H)“Disability” shall mean a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Executive to be unable to perform the duties of his or her position of employment or any substantially similar position of employment.

(I)“Executive” shall mean the individual named in the first paragraph of this Agreement.

(J)“Incumbent Directors” shall mean directors who were directors of the Company as of the date hereof or who are appointed, elected or nominated to the Board in accordance with the following sentence. It is understood that any individual becoming a member of the Board subsequent to the date hereof whose appointment was approved by a vote of at least a two-thirds majority of the Continuing Directors remaining in office at the time of appointment or whose election or nomination for election by the Company’s stockholders was approved by  a vote of at least a two-thirds majority of the Continuing  Directors  remaining  in office at the time of election or nomination shall be considered, for purposes of this Agreement,  as though such individual  were a Continuing Director on the date hereof.

(K)“Notice of Termination” shall have the meaning stated in Paragraph (A) of Section 5 hereof.

(L)“Payment Trigger” shall mean any of the following that occurs during the term of this Agreement:

(i)termination of the Executive’s employment by the Company without Cause, at any time other than within twelve (12) months following a Change in Control, and other than  as a result of the Executive’s Disability; or

(ii)Constructive Termination of the Executive while the Executive remains employed by the Company or its successor, or termination of the Executive’s employment by the Company without Cause within twelve (12) months following a Change in Control occurring during the term of this Agreement.

For the avoidance of doubt, a termination of the Executive by the Company for Disability shall not be deemed a termination of the Executive without Cause.

(M)“ Person “ shall have the meaning given in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time, as modified and used in Sections 13(d) and 14(d) thereof; except that, a Person shall not include (i) the Company, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or (iii) an underwriter temporarily holding securities pursuant to an offering of such securities.

2. Term of Agreement.

This Agreement shall be effective as of the date set forth in the first paragraph of this Agreement and shall continue in effect until the Date of Termination or the death of the Executive; provided, that all covenants (including, without limitation, the covenants of the Executive contained in Sections 14, 15, and 16 of this Agreement and the covenants of the Company following a Payment Trigger) shall survive in accordance with their terms.

3. General Provisions.

(A)The Company hereby represents and warrants to the Executive that the execution and delivery of this Agreement and the performance by the Company of the actions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company. This Agreement is a legal, valid and legally binding obligation of the Company enforceable in accordance with its terms.

(B)No amount or benefit shall be payable under this Agreement unless there shall have occurred a Payment Trigger during the term of this Agreement.

(C)This Agreement and the Employment Offer Letter shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company. Notwithstanding the immediately preceding sentence or any other provision of this Agreement, any purported termination of the Executive’s employment that is not effected in accordance with a Notice of Termination satisfying Paragraph (A) of Section 5 shall not be effective for purposes of this Agreement. The Executive’s continued employment for any period of time after a Payment Trigger, up to the maximum

time specified in Paragraph (B) of Section 5, shall not constitute a waiver of the Executive’s rights with respect to any payment obligations of the Company under this Agreement. The waiver by the Executive of any particular event meeting the definition of or constituting a Constructive Termination shall not operate as a waiver by the Executive of any benefits or rights under this Agreement should any subsequent event or circumstance occur that constitutes a Constructive Termination under this Agreement.

4.Payments Due Upon a Payment Trigger.

(A)The Company shall pay to the Executive the payments described in this Section 4 upon the occurrence of a Payment Trigger during the term of this Agreement.

(B)(i) Upon the occurrence of a Payment Trigger during the term  of  this Agreement arising by reason of the circumstances described in subparagraph (i) of Paragraph (L) of Section 1:

(a)the Company shall pay the Executive monthly payments, in cash, equal to one-twelfth (1/12) of the Executive’s annual base salary in effect immediately prior to the Date of Termination, on or as near as practicable to the same date in each month as monthly installments (each of which shall be considered a separate “payment” for purposes of Code Section 409A, as defined in Section 23) of the annual base salary were made to the Executive prior to the Date of Termination, for a period of six (6) months following the Date of Termination or such lesser number of months Executive is employed by the Company as Senior Vice President, Truckload Operations (pro-rated for partial months);

(b)the Company shall pay to the Executive a lump sum amount, in cash, if and to the extent earned, under any short term cash incentive compensation plan for the fiscal year in which the Date of Termination occurs, which plan has been adopted. by the Executive Compensation Committee of the Board prior to the Date of Termination, pro­ rated for the number of days Executive was employed by the Company in the applicable fiscal year through the Date of Termination, and payable at the time and on the same basis as paid to recipients still employed by the Company; and

(c)the Company shall pay the Executive any other amounts (other than any payment of short term cash incentive compensation described in Section 4(B)(i)(b) above or Section 4(C) below) that may be due to the Executive under any employee welfare, benefit, vacation, equity, or long term incentive plan then in effect to the extent the Executive is an eligible participant, subject to and upon the terms and conditions set forth in any such plan.

(ii)Upon the occurrence of a Payment Trigger during the term of this Agreement arising by reason of the circumstances described in subparagraph (ii) of Paragraph (L) of Section 1:

(a)the Company shall pay the Executive a lump sum payment, in cash, equal to the sum of one hundred fifty percent (150%) of the Executive’s annual base salary in effect immediately prior to the Date of Termination, provided that if the Change in Control does not constitute a change in control event as defined in Code Section 409A, then the portion of the lump sum payment, if any, that is considered deferred compensation subject to Code Section 409A shall be paid in installments as described in Section 4(B)(i)(a);

(b)to the extent the Executive has established full time residency in the Ft. Smith/Van Buren, Arkansas area for Executive and his family, the Company shall pay to the Executive a lump sum payment, in cash, equal to the amount set forth on the signature page to this Agreement (if any) and identified as relocation services benefit, to defray the Executive’s costs of relocation services;

(c)the Company shall pay to the Executive a lump sum amount, in cash, equal to one hundred fifty percent (150%) of the target amount of any short term incentive cash compensation plan for the fiscal year in which the Date of Termination occurs, which plan has been adopted by the Executive Compensation Committee of the Board prior to the Date of Termination, that would have been paid to the Executive for the fiscal year in which the Date of Termination occurs, assuming all performance and other vesting criteria were satisfied for such year; provided, that if no short term cash incentive cash compensation plan has been adopted for the fiscal year in which the Date of Termination occurs, such target amount will be equal to the Executive’s target amount under the short term incentive cash compensation plan adopted by the Executive Compensation Committee of the Board for the fiscal year immediately preceding the fiscal year in which the Date of Termination occurs;

(d)the Company shall reimburse, on an after-tax basis, any premiums paid by the Executive pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), during a period of eighteen (18) months following the Date of Termination; and

(e)the Company shall pay the Executive any other amounts (other than any payment of short term cash incentive compensation described in Section 4(B)(ii)(c) or Section 4(C)) that may be due the Executive under any employee welfare, benefit, vacation, equity, or long term incentive plan then in effect to the extent the Executive is an eligible participant, subject to and upon the terms and conditions set forth in any such plan.

(C)Notwithstanding any provision of any incentive compensation plan adopted by the Executive Compensation Committee of the Board prior to the Date of Termination, and in addition to any payments under Paragraph (B) hereof, the Company shall pay to the Executive a lump sum amount, in cash, equal to the amount of any cash incentive compensation that has been awarded to and earned by the Executive under any cash incentive compensation plan adopted by the Executive Compensation Committee of the Board for a completed fiscal year preceding the occurrence of the Date of Termination but that has not yet been paid to the Executive.

(D)The payments provided for in subparagraph (ii)(a) of Paragraph (B) and, if applicable and due upon the occurrence of a Payment Trigger during the term of this Agreement by reason of the circumstances described in subparagraph (ii) of Paragraph (L) of Section 1, Paragraph (C) of this Section 4 shall be made within a reasonable time following the expiration of the applicable waiting periods following execution and delivery of the General Release (as hereinafter defined).

(E)As a condition to the receipt of the severance and other payment benefits described in this Agreement, the Executive shall execute and comply with the terms of a general release of all claims (the “General Release”) against the Company, its affiliates and representatives, in the form attached hereto as Exhibit A, as updated by the Company for any change in laws. The General Release must be signed, and the period provided therein for revocation must have expired, not later than sixty days from the Date of Termination. Notwithstanding anything to the contrary contained herein, no severance benefits or other payments required under this Agreement shall be paid until the General Release is signed and the revocation period has expired, and any amounts that would otherwise have been paid prior to such date shall be paid within a reasonable time after such date, without interest. Notwithstanding the foregoing, if the sixty-day period after the Date of Termination ends in the calendar year following the year that includes the Date of Termination, no such amount that is subject to Code Section 409A shall be paid sooner than the first day of the year following the year that includes the Date of Termination, regardless of when the General Release is signed.

5.Termination Procedures.

(A)During the term of this Agreement, any purported termination of the Executive’s employment (other than by reason of death) shall be communicated by a Notice of Termination from one party hereto to the other party hereto in accordance with this Section 5(A). For purposes of this Agreement, a “Notice of Termination” shall mean, (i) in the case of a termination of the Executive’s employment by the Company without Cause, a written notice of termination, (ii) in the case of a termination of the Executive’s employment by the Company for Cause, a written notice of termination, which will indicate the conduct set forth in the definition of Cause in Paragraph (B) of Section 1 that the Executive was found to have violated, and (iii) in the case of the Executive terminating his or her employment with the Company, a written or verbal notice of termination; provided, that a Notice of Termination by the Executive in the case of a Constructive Termination shall specify in reasonable detail the event or circumstance constituting the Constructive Termination under Paragraph (F) of Section 1 of this Agreement, and such notice of Constructive Termination must be provided by the Executive to the Company within sixty (60) days of the initial existence of the condition giving rise to the Constructive Termination. Notwithstanding anything to the contrary contained herein, if the Executive engages in conduct that is reasonably believed to be imminently harmful to the Company, the Company may terminate the Executive’s employment by giving the Executive a verbal Notice of Termination, which may be effective immediately, and which shall be effective for purposes of this Agreement.

(B)“For purposes of this Agreement, a “Notice of Termination” shall mean a written or verbal notice of termination in accordance with Paragraph (A) of Section 5. In the case of a Notice of Termination for Cause, the Notice of Termination will indicate the conduct set forth in the definition of Cause in Paragraph (B) of Section 1 that the Executive was found to have violated.”

(C)“Date of Termination” with respect to any purported termination of the Executive’s employment during the term of this Agreement (other than by reason of death) shall mean:

(i)if the Executive’s employment is terminated by the Company for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s duties during that thirty (30) day period);

(ii)if the Executive’s employment is terminated by the Company for any other reason except in the case of a termination for Cause, the date specified in the Notice of Termination;

(iii)if the Executive’s employment is terminated by the Company for Cause, the date specified in the Notice of Termination; and

(iv)in the case of termination by the Executive (including a Constructive Termination following a Change in Control), thirty (30) days after the date such Notice of Termination is given; provided, in the case of a Constructive Termination, the Notice of Termination contemplated by Paragraph (A) of this Section 5 shall be deemed cancelled, void and of no further force and effect, and no payment obligation of the Company shall arise therefrom, if the Company rescinds or otherwise eliminates or reverses the action or event that would otherwise constitute grounds for Constructive Termination, and so notifies the Executive in writing within thirty (30) days of its receipt of the notice of Constructive Termination. The rescission, elimination or reversal of any such action or event constituting a Constructive Termination shall not operate to release or discharge the Company from any other liability or obligation under this Agreement, including any liability or obligation arising from any subsequent action or event that constitutes a Constructive Termination.

6.No Mitigation; No Setoff.

The Executive shall not be required to mitigate the amount of any benefits the Company becomes obligated to provide to the Executive in connection with this Agreement by seeking other employment or otherwise. The benefits to be provided to the Executive in connection with this Agreement may not be reduced, setoff or subject to recovery by the Company by any benefits the Executive may receive from other employment, from retirement benefits or otherwise. Further, the amount of any payment or benefit provided for in this Agreement shall not be setoff against any amount claimed to be owed by the Executive to the Company, or otherwise, except for a violation of Section 14, 15, or 16.

7.Disputes.

(A)If a dispute or controversy arises out of or in connection with this Agreement, the parties shall first attempt in good faith to settle the dispute or controversy by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to arbitration or litigation. Thereafter, any remaining unresolved dispute or controversy arising out of or in connection with this Agreement may be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association in a city located within Crawford County, Arkansas. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The Executive shall, however, be entitled to seek specific performance of the Company’s obligations hereunder during the pendency of any dispute or controversy arising under or in connection with this Agreement. The Company shall be entitled, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach of, or to otherwise seek specific performance of the Executive’s obligations under, any of the covenants contained in Section 14, 15, or 16 of this Agreement during the pendency of any dispute or controversy arising under or in connection with this Agreement, and the Company shall not be obligated to post bond or other security in seeking such relief.

(B)Any legal action concerning this Agreement, other than a mediation or an arbitration described in Paragraph (A) of this Section 7, whether instituted by the Company or the Executive, shall be brought and resolved only in a state or federal court of competent jurisdiction located in Crawford County, Arkansas or the Fort Smith Division of the Western District of Arkansas. The parties hereby irrevocably consent and submit to and shall take any action necessary to subject themselves to the personal jurisdiction of any such court and hereby irrevocably agree that all claims in respect of the action shall be instituted, heard, and determined in such court. The parties agree that such court is a convenient forum, and hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance

of the action. Any final judgment in the action may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(C)The Company shall pay all costs and expenses, including attorneys’ fees and disbursements, of the Company and the Executive in connection with any legal proceeding (including arbitration), whether or not instituted by the Company or the Executive, relating to the interpretation or enforcement of any provision of this Agreement, that is resolved in favor of the Executive pursuant to a final, unappealable judgment. The Executive shall pay all costs and expenses, including attorneys’ fees and disbursements, of the Company and the Executive in connection with any legal proceeding (including arbitration), whether or not instituted by the Company or the Executive, relating to the interpretation or enforcement of any provision of this Agreement, that is resolved in favor of the Company pursuant to a final, unappealable judgment. The non-prevailing party, as set forth above, shall pay prejudgment interest on any money judgment obtained by the prevailing party as a result of such proceeding, calculated at the rate provided in Section 1274(b)(2)(B) of the Code.

8.Successors; Binding Agreement.

(A)In addition to any obligations imposed by law upon any successor to the Company, the Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise, and whether or not such a transaction constitutes a Change in Control) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain the assumption and agreement prior to the effectiveness of any succession shall be a breach of this Agreement for which the Executive shall have any and all of the remedies available to him under this Agreement. The provisions of this Section 8 shall continue to apply to each subsequent employer of the Executive bound by this Agreement in the event of any merger, consolidation, or transfer of all or substantially all of the business or assets of that subsequent employer, whether or not that transaction constitutes a Change in Control.

(B)This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive shall die while any amount would be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, the amount, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives, or administrators of the Executive’s estate.

9.Effect on Prior Agreements.

This Agreement contains the complete, final, and exclusive embodiment of the agreement and understanding among the parties hereto regarding severance, change in control, or similar payments to the Executive and supersedes in all respects any prior or other agreement or understanding, written or oral, among the parties with respect to the subject matter of this Agreement, including, but not limited to, Change in Control Severance Agreements, the Employment Offer Letter, employment agreements or company policies, or other agreements or arrangements with respect to severance, change in control, or similar payments.

10.Exclusive Remedy.

In the event of a Payment Trigger, the provisions of Section 4 are intended to be and are exclusive and in lieu of any other rights or remedies to which the Executive or the Company may otherwise be entitled (including any contrary provisions in any written or oral employment agreement or arrangement the Executive may have with the Company), whether at law, tort or contract, in equity, or under this Agreement. The Executive shall not be entitled to any severance or Change in Control benefits or rights upon a Payment Trigger other than those benefits expressly set forth in Section 4.

11.Notices.

For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt:

To the Company: USA Truck, Inc.

3201 Industrial Park Road

Van Buren, Arkansas 72956

Attention: Chairman of the Board

To the Executive:Mr. Zachary King

street

city, state, zip

12.Miscellaneous.

No provision of this Agreement may be modified, waived, or discharged unless such waiver, modification, or discharge is agreed to in writing and signed by the Executive and an officer of the Company specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. All references to sections of the Code shall be deemed also to refer to any successor provisions to such sections.

13.Governing Law.

The validity, interpretation, construction, and performance of this Agreement shall be governed by the internal, substantive laws of the State of Delaware, without giving effect to the law or principles of conflict of laws of any jurisdiction.

14.Obligation Not to Solicit and Compete.

The Executive hereby agrees that during his employment with the Company and for a period of six (6) months thereafter or, in the event of a Change in Control, eighteen (18) months thereafter (the applicable period being referred to herein as the “Restricted Period’), the Executive will not, directly or indirectly, in any manner (i) attempt to induce or assist others to attempt to induce any officer, employee, driver, independent contractor, customer, or vendor of the Company or its affiliates to terminate its association with or reduce or terminate business with the Company or its affiliates, nor do anything directly or indirectly to interfere with the relationship between the Company or its affiliates and any such persons or concerns, unless part of a management directive, or (ii) engage or invest in, own, manage, operate, finance, control or participate in the ownership, management, operation, financing or control of, be employed by, serve as an agent, officer, director or consultant to, be associated with or in any manner connected with, lend his name or any similar name to, lend his credit or render services or advice to, any Competitive Business (as hereinafter defined) anywhere in North America; provided, in order to bind the Executive to the provisions of Section 14(ii) when there is no Payment Trigger, the Company must make monthly payments, in cash, equal to one-twelfth (1/12) of the Executive’s annual base salary in effect immediately prior to the Date of Termination, on or as near as practicable to the same date in each month as monthly installments of the annual base salary were made to the Executive prior to the Date of Termination, for such portion of the Restricted Period as the Company determines (the “Non-Compete Payments”), which benefits will commence when the General Release is signed and the revocation period has expired. The Company will give the Executive notice within ten (10) days following the Date of Termination if it elects to not make the Non-Compete Payments and, once Non­ Compete Payments commence, the Company will give the Executive thirty (30) days’ written notice before discontinuing the Non-Compete Payments. The provisions of Section 14(i) will automatically apply to the Executive regardless of whether there is a Payment Trigger and the provisions of Section 14(ii) will automatically apply to the Executive if there is a Payment Trigger; the Executive acknowledging that he has received sufficient consideration for such covenants. For purposes of this

Agreement, Competitive Business will mean the interstate or intrastate transportation of freight by truck (motor carrier), interstate or intrastate transportation freight through the use of a combination of rail and truck (intermodal), arranging for the interstate or intrastate transportation of freight by truck or a combination of rail and truck (brokerage), any business conducted by the Company or the Company’s affiliates during Executive’s employment, and any business where plans were developed during the Executive’s employment to engage in such business. Nothing herein will be deemed to prevent the Executive from acquiring through market purchases and owning, solely as an investment, less than two percent (2%) in the aggregate of the equity securities of any issuer whose shares are registered under Section 12(b) or Section 12(g) of the Exchange Act, as amended, and are listed or admitted for trading on any United States national securities exchange or are quoted on any system of automated dissemination of quotations of securities prices in common use, so long as the Executive is not directly or indirectly a member of any “control group” (within the meaning of the rules and regulations of the SEC).

15.Confidentiality.

The Executive acknowledges that during his employment with the Company, he may acquire confidential proprietary information of the Company or its affiliates (‘‘Confidential Information”) that is, and remains, the sole property of the Company. Such Confidential Information is a valuable asset of the Company and substantially contributes to the effective and successful conduct of the Company’s business. Confidential Information is intended to remain secret and misappropriation by any means is strictly prohibited. The Executive agrees to comply with the policies and procedures of the Company for protecting Confidential Information and agrees not to disclose to any person or use any Confidential Information obtained by the Executive incident to the Executive’s employment or other association with the Company or its affiliates, other than as required for the proper performance of the Executive’s duties and responsibilities to the Company or as required by applicable law after notice to the Company and a reasonable opportunity for it to protect Confidential Information. This restriction will continue to apply after the Executive’s employment terminates, regardless of the reason for such termination, for so long as such Confidential Information remains confidential or, if sooner, until the expiration of the Restricted Period following the date the Executive’s employment with the Company terminates. The obligations of confidentiality imposed by this Section 15 will not apply to Confidential Information that becomes generally known to the public hereafter through no act of the Executive’s in breach of this Agreement and no act of any other person in breach of an obligation of confidentiality to the Company. Notwithstanding anything to the contrary herein, the Executive acknowledges that the requirements for confidentiality as set forth in the Company handbook continue to apply to the Executive while the Executive is receiving compensation and benefits under this Agreement and during the Restricted Period.

The Executive also acknowledges that the requirements for confidentiality set forth in the Company handbook continue to apply to the Executive for the term provided therein. Notwithstanding anything to the contrary herein or set forth in the Company handbook, nothing herein or therein will (i) limit Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”), (ii) limit Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company, or (iii) limit Executive’s right to receive an award for information provided to any Government Agencies.

The restrictions in this Section, and Section 16 below, do not apply to information that the Executive is legally required to disclose pursuant to a subpoena or court order, and do not prevent the Executive from reporting an event that the Executive believes in good faith is a violation of law to the relevant law enforcement agency, require notice to or approval from the Company before doing so, or prohibit the Executive from cooperating in an investigation conducted by a government agency. This may include a disclosure of trade secret information, provided that such disclosure must comply with the restrictions in the Defend Trade Secrets Act of 2016 (DTSA). The DTSA provides that no individual will be held civilly or criminally liable under federal or state trade secret law for disclosure of a trade secret that (i) is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and made solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document if such filing is under seal so that it is not made public. Also, an individual who pursues a lawsuit for retaliation for reporting a suspected violation of the law may disclose the trade secret to the individual’s attorney and use the trade secret information in the court proceeding, if any document containing the trade secret is filed under seal, and the trade secret is not disclosed, except as permitted by court order.

16.Non-disparagement.

The Executive agrees that he will not make to any person or entity any false, disparaging, or derogatory comments about the Company or its affiliates, or their business affairs, directors, officers, employees, drivers, independent contractors, customers, or vendors.

17.Remedies

Upon breach of any of the covenants contained in Section 14, 15, or 16 of this Agreement, (a) the Company can and may take any and all actions available at law and in equity, including obtaining a restraining order or injunctive relief, (b) all compensation and benefits described in this Agreement will immediately cease, (c) the Executive will remain obligated to comply with the covenants in this Agreement, and (d) the periods set forth above in Sections 14 and 15 will be tolled during any period in which the Executive is in violation of such Section(s) so that the Company is provided with the full benefit of the Restricted Period.

18.Withholding.

All payments provided for hereunder will be subject to required withholding of federal, state and local income, excise, and employment-related taxes. If any such excise taxes would otherwise be imposed, the Company shall determine in good faith whether the Executive will either receive all of the benefits to which he is entitled under this Agreement, subject to the excise tax, or have his benefits under this Agreement reduced to a level at which the excise tax will not apply, depending upon which approach will provide the Executive with the greater net after-tax benefit.

19.Severability.

If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

20.Counterparts.

This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

21.Payment; Assignment.

Benefits payable under this Agreement will be paid only from the general assets of the Company. No person has any right to or interest in any specific assets of the Company by reason of this Agreement or the Employment Offer Letter. To the extent benefits under this Agreement are not paid when due to any individual, he or she is a general unsecured creditor of the Company with respect to any amounts due. Benefits payable pursuant to this Agreement and the right to receive future benefits may not be anticipated, alienated, sold, transferred, assigned, pledged, encumbered, or subject to any charge.

22.Further Assurances.

The parties to this Agreement agree to perform, or cause to be performed, such further acts and deeds and to execute and deliver or cause to be executed and delivered, such additional or supplemental documents or instruments as may be reasonably required by the other party to carry into effect the intent and purpose of this Agreement.

23.Code Section 409A.

It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Code Section 409A (including the Treasury regulations and other published guidance relating thereto) (“Code Section 409A”) so as not to subject the Executive to payment of any additional tax, penalty or interest imposed under Code Section 409A. The provisions of this Agreement shall be construed and interpreted, and if necessary modified or reformed (including any

modification or reformation regarding the timing and amount of any payment) to avoid the imputation of any such additional tax, penalty or interest under Code Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Executive. A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits that the Company determines may be considered nonqualified deferred compensation under Code Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A, and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like term, and the timing thereof, shall mean such a separation from service. Notwithstanding any other provision of this Agreement, in the event the Executive is a “specified employee” as defined in Code Section 409A on the date the Executive incurs a separation from service, as so defined, to the extent required by Code Section 409A, payments and benefits hereunder to which Code Section 409A would apply may not commence to the Executive until the earlier of the first day of the seventh month following the month that includes the Executive’s separation from service (as defined in Code Section 409A) or the date of the Executive’s death and any delayed payments and benefits shall be paid and provided in the aggregate, without interest, no later than ten (10) days following such date. For purposes of Code Section 409A, the Executive’s right to receive the payments and benefits hereunder shall be treated as a right to receive a series of separate and distinct payments and benefits. Whenever a payment or benefit hereunder specifies a payment or benefit period with reference to a number of days, the actual date of payment or benefit within the specified period shall be within the sole discretion of the Company. In no event may the Executive, directly or indirectly, designate the calendar year of any payment to be made under this Plan, to the extent such payment is subject to Code Section 409A. The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Code Section 409A, but do not satisfy an exemption from, or the conditions of, Code Section 409A. Any terms of this Agreement that are undefined or ambiguous shall be interpreted by the Company in its discretion in a manner that complies with Code Section 409A to the extent necessary to comply therewith. If for any reason any provision of this Agreement does not accurately reflect its intended establishment of an exemption from or compliance with Code Section 409A, as demonstrated by consistent interpretations or other evidence of intent, such provision shall be considered ambiguous as to its exemption from or compliance with Code Section 409A and shall be interpreted by the Company in a manner consistent with such intent, as determined in the discretion of the Company.

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

IN WITNESS WHEREOF, the parties have signed this Agreement as of the date set forth above.

USA TRUCK, INC.

By:/s/ James D. Reed

Name: James D. Reed

Title: President and CEO

/s/ ZK

Zachary King

____________________________________

Signature

Exhibit A

TO BE EXECUTED ON THE SEPARATION DATE

General Release

In exchange for the payments and benefits described in the agreement to which this release is attached (the “Agreement”), Executive, on his own behalf and on behalf of his heirs, executors, administrators, assigns and successors, does hereby covenant not to sue and acknowledges full and complete satisfaction of and hereby releases, absolves and discharges the Company and its Affiliates and their successors and assigns, parents, subsidiaries and affiliates, past and present, as well as their trustees, directors, officers, agents, attorneys, insurers, stockholders and employees, past and present, and each of them (hereinafter collectively referred to as “Releasees”), with respect to and from any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts, wages, vacation pay, expenses, attorneys’ fees, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which Executive now owns or holds or has at any time heretofore owned or held as against said Releasees, or any of them, arising out of or in any way connected with his employment or other relationships with the Company or its Affiliates, or his separation from any such employment or other relationships (collectively, “Released Claims”), including specifically, but without limiting the generality of the foregoing, any claim under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act of 1967, as amended by the Older Worker’s Benefit Protection Act (“ADEA’’), the federal Family and Medical Leave Act, the Equal Pay Act, the Employee Retirement Income Security Act of 1974, the Worker Adjustment and Retraining Notification Act, or any other employment related federal, state or local law, regulation or ordinance; provided, however, that the foregoing release will not include or affect (and the following are expressly excluded from any Released Claims): (i) Executive’s rights under the Agreement; (ii) Executive’s rights to file claims for workers’ compensation or unemployment insurance benefits, (iii) Executive’s regular and usual salary accrued prior to the Separation Date; (iv) COBRA continuation coverage and life insurance conversion rights, if any, (v) claims which the law expressly prohibits the release, or that arise after the date Executive signs this General Release, and (vi) Executive’s rights to provide information, assist or participate in any investigation, proceedings, or litigation concerning any administrative claim with any government agency under any applicable law that protects such rights, or to file such a claim.

This General Release does not

(i)limit Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”), (ii) limit Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company, or (iii) limit Executive’s right to receive an award for information provided to any Government Agencies.

Executive acknowledges that the non-disparagement and confidentiality provisions contained in this General Release infringe on Executive’s rights described in this General Release, and Executive agrees that he is aware of and has consented to such infringement. Furthermore, notwithstanding the foregoing release, Executive will continue to be entitled to all of his respective statutory rights to indemnification, including, without limitation, indemnification pursuant to the Company’s organizational documents, insurance policies, or under applicable law to the same extent Executive would have had the right to be indemnified absent this General Release.

Waiver of Limitations on General Releases: Executive acknowledges that he is consciously and voluntarily granting the Company a release even as to claims for damages that may exist as of the date

Executive signs this General Release that Executive does not know exists, and which, if known, would materially affect Executive’s decision to sign and not revoke the General Release, regardless of whether the lack of knowledge is the result of ignorance, oversight, error, neglect, or any other cause. To the extent that any statute or common law principle of any controlling jurisdiction purports to limit the effects and scope of the general releases contained in this General Release to claims actually known by Executive, such statutes and common law principles are knowingly waived by both parties, each party having been advised by independent counsel as to the effect of such waiver.

Executive acknowledges that he is waiving and releasing any rights he may have under the ADEA and that this waiver and release is knowing and voluntary. Executive and the Company agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the date Executive signs this Agreement. Executive acknowledges that the consideration given for the Agreement is in addition to anything of value to which he was already entitled. Executive further acknowledges that he has been advised by this writing that:

(a)He should consult with an attorney prior to executing the General Release;

(b)He has at least twenty-one (21) days within which to consider the General Release, but if he wishes to sign the General Release earlier, he may do so. Executive has not been asked by the Company to shorten the time period for consideration of whether to sign the General Release;

(c)He has seven (7) days following his execution of the General Release to revoke the General Release;

(d)The General Release will not be effective until the eighth day after Executive executes and does not revoke the General Release, and if Executive timely revokes the General Release, it will be void and of no effect;

(e)The General Release will not be effective until the eighth day after Executive executes and does not revoke the General Release; in the event that Executive timely revokes the General Release, without regard to the date on which the Agreement was executed, and neither the Company or its Affiliates will have any further obligations under the Agreement, nor will Executive have any further rights under the Agreement;

(f)Any revocation must be in writing and hand delivered to the Company by close of business on or before the seventh day from the date that Executive signs the Agreement or General Release;

(g)Any agreed changes to the Agreement or General Release, whether material or immaterial, do not re-start the running of the twenty-one (21) day consideration period.

Nothing in the Agreement or the General Release prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs from doing so, unless specifically authorized by federal law.

Executive represents and warrants that he has no present knowledge of any injury, illness or disease that is or might be compensable as a workers’ compensation claim or similar claim for workplace injuries, illnesses or diseases. Executive agrees that he has received all compensation due to her as a result of services performed for the Company through the date he signs this General Release.

Terms used herein and not otherwise defined will have the meanings set forth in the Agreement to which this General Release was attached.

Intending to be legally bound, I have signed this General Release as of the date written below.

Signature: ________________________________________________

Date Signed: ______________________________________________

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

USA TRUCK, INC.

I, James D. Reed, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of USA Truck, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	July 28, 2020	By:	/s/ James D. Reed
			James D. Reed
			Principal Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

USA TRUCK, INC.

I, Zachary B. King, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of USA Truck, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	July 28, 2020	By:	/s/ Zachary B. King
			Zachary B. King
			Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with this quarterly report on Form 10-Q of USA Truck, Inc. (the “Company”) for the period ended June 30, 2020 (the “Report”), I, James D. Reed, certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	July 28, 2020	By:	/s/ James D. Reed
			James D. Reed
			Principal Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with this quarterly report on Form 10-Q of USA Truck, Inc. (the “Company”) for the period ended June 30, 2020 (the “Report”), I, Zachary B. King, certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	July 28, 2020	By:	/s/ Zachary B. King
			Zachary B. King
			Principal Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Jul. 24, 2020
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2020
Entity File Number	1-35740
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	71-0556971
Entity Address, Address Line One	3200 Industrial Park Road
Entity Address, City or Town	Van Buren
Entity Address, State or Province	AR
Entity Address, Postal Zip Code	72956
City Area Code	479
Local Phone Number	471-2500
Title of 12(b) Security	Common Stock, $0.01 Par Value
Trading Symbol	USAK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		8,762,377
Entity Registrant Name	USA TRUCK INC.
Entity Central Index Key	0000883945
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash	$ 92	$ 97
Accounts receivable, net of allowance for doubtful accounts of $810 and $369, respectively	53,362	49,853
Other receivables	7,947	5,408
Inventories	786	769
Assets held for sale	1,082	2,542
Prepaid expenses and other current assets	6,666	7,855
Total current assets	69,935	66,524
Property and equipment:
Land and structures	33,474	33,077
Revenue equipment	320,623	309,573
Service, office and other equipment	31,077	30,235
Property and equipment, at cost	385,174	372,885
Accumulated depreciation and amortization	(142,414)	(124,216)
Property and equipment, net	242,760	248,669
Operating leases - right of use assets	7,866	11,775
Goodwill	5,231	5,231
Other intangibles, net	15,773	16,453
Other assets	1,209	2,058
Total assets	342,774	350,710
Current liabilities:
Accounts payable	24,197	29,421
Current portion of insurance and claims accruals	9,702	12,466
Accrued expenses	8,338	6,518
Current finance lease obligations	25,928	30,779
Current operating lease obligations	3,028	6,050
Long-term debt, current maturities	3,064	6,165
Total current liabilities	74,257	91,399
Other long-term liabilities	1,629	80
Long-term debt, less current maturities	92,158	83,349
Long-term finance lease obligations	60,363	58,397
Long-term operating lease obligations	4,966	5,812
Deferred income taxes	24,824	24,017
Insurance and claims accruals, less current portion	9,071	9,445
Total liabilities	267,268	272,499
Stockholders' equity:
Preferred Stock, $0.01 par value; 1,000,000 shares authorized; none issued	0	0
Common Stock, $0.01 par value; 30,000,000 shares authorized; issued 12,036,279 shares, and 11,987,572 shares, respectively	120	120
Additional paid-in capital	59,565	63,238
Retained earnings	70,287	73,769
Less treasury stock, at cost (3,273,902 shares, and 3,434,231 shares, respectively)	(54,466)	(58,916)
Total stockholders' equity	75,506	78,211
Total liabilities and stockholders' equity	$ 342,774	$ 350,710

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Allowance for doubtful accounts	$ 810	$ 369
Stockholders' equity:
Preferred Stock, par or stated value per share (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred Stock, shares issued (in shares)	0	0
Common Stock, par or stated value per share (in dollars per share)	$ 0.01	$ 0.01
Common Stock, shares authorized (in shares)	30,000,000	30,000,000
Common Stock, shares issued (in shares)	12,036,279	11,987,572
Treasury stock, shares (in shares)	3,273,902	3,434,231

XML

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME
Operating revenue	$ 123,737	$ 133,622	$ 250,510	$ 267,596
Operating expenses:
Salaries, wages and employee benefits	33,636	33,806	69,481	69,896
Fuel and fuel taxes	8,082	14,102	19,945	27,733
Depreciation and amortization	10,034	9,125	20,045	17,943
Insurance and claims	4,009	7,160	9,866	14,440
Equipment rent	2,336	2,568	4,628	5,288
Operations and maintenance	8,606	8,481	17,502	15,754
Purchased transportation	49,276	49,072	97,090	97,353
Operating taxes and licenses	1,349	1,311	2,508	2,428
Communications and utilities	906	719	1,719	1,486
(Gain) loss on disposal of assets, net	(16)	141	22	(4)
Asset impairments	588	367	588	367
Other	3,931	4,787	8,428	9,008
Total operating expenses	122,737	131,639	251,822	261,692
Operating income (loss)	1,000	1,983	(1,312)	5,904
Other expenses:
Interest expense, net	1,235	1,595	2,919	3,336
Other, net	64	171	110	308
Total other expenses, net	1,299	1,766	3,029	3,644
(Loss) income before income taxes	(299)	217	(4,341)	2,260
Income tax expense (benefit)	632	216	(859)	758
Consolidated net (loss) income and comprehensive (loss) income	$ (931)	$ 1	$ (3,482)	$ 1,502
Net (loss) earnings per share:
Average shares outstanding (basic) (in shares)	8,820	8,554	8,737	8,479
Basic (loss) earnings per share (in dollars per share)	$ (0.11)	$ 0.00	$ (0.40)	$ 0.18
Average shares outstanding (diluted) (in shares)	8,820	8,567	8,737	8,498
Diluted (loss) earnings per share (in dollars per share)	$ (0.11)	$ 0.00	$ (0.40)	$ 0.18

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Total
Balance at Dec. 31, 2018	$ 120	$ 66,433	$ 78,467	$ (63,747)	$ 81,273
Balance (in shares) at Dec. 31, 2018	12,012
Increase (Decrease) in Stockholders' Equity
Issuance of treasury stock		(4,558)		4,558
Stock-based compensation		589			589
Net share settlement related to restricted stock vesting		(72)			(72)
Net share settlement related to restricted stock vesting (in shares)	(5)
Net income (loss)			1,501		1,501
Balance at Mar. 31, 2019	$ 120	62,392	79,968	(59,189)	83,291
Balance (in shares) at Mar. 31, 2019	12,007
Balance at Dec. 31, 2018	$ 120	66,433	78,467	(63,747)	81,273
Balance (in shares) at Dec. 31, 2018	12,012
Increase (Decrease) in Stockholders' Equity
Net income (loss)					1,502
Balance at Jun. 30, 2019	$ 120	62,718	79,969	(58,811)	83,996
Balance (in shares) at Jun. 30, 2019	11,989
Balance at Mar. 31, 2019	$ 120	62,392	79,968	(59,189)	83,291
Balance (in shares) at Mar. 31, 2019	12,007
Increase (Decrease) in Stockholders' Equity
Issuance of treasury stock		(378)		378
Stock-based compensation		705			705
Forfeited restricted stock (in shares)	(18)
Net share settlement related to restricted stock vesting		(1)			(1)
Net income (loss)			1		1
Balance at Jun. 30, 2019	$ 120	62,718	79,969	(58,811)	83,996
Balance (in shares) at Jun. 30, 2019	11,989
Balance at Dec. 31, 2019	$ 120	63,238	73,769	(58,916)	78,211
Balance (in shares) at Dec. 31, 2019	11,988
Increase (Decrease) in Stockholders' Equity
Issuance of treasury stock		(4,327)		4,327
Stock-based compensation		471			471
Forfeited restricted stock (in shares)	(15)
Net share settlement related to restricted stock vesting		(57)			(57)
Net share settlement related to restricted stock vesting (in shares)	(11)
Net income (loss)			(2,551)		(2,551)
Balance at Mar. 31, 2020	$ 120	59,325	71,218	(54,589)	76,074
Balance (in shares) at Mar. 31, 2020	11,962
Balance at Dec. 31, 2019	$ 120	63,238	73,769	(58,916)	78,211
Balance (in shares) at Dec. 31, 2019	11,988
Increase (Decrease) in Stockholders' Equity
Net income (loss)					(3,482)
Balance at Jun. 30, 2020	$ 120	59,565	70,287	(54,466)	75,506
Balance (in shares) at Jun. 30, 2020	12,036
Balance at Mar. 31, 2020	$ 120	59,325	71,218	(54,589)	76,074
Balance (in shares) at Mar. 31, 2020	11,962
Increase (Decrease) in Stockholders' Equity
Issuance of treasury stock		(123)		123
Stock-based compensation		363			363
Restricted stock award grant (in shares)	74
Net income (loss)			(931)		(931)
Balance at Jun. 30, 2020	$ 120	$ 59,565	$ 70,287	$ (54,466)	$ 75,506
Balance (in shares) at Jun. 30, 2020	12,036

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating activities:
Net (loss) income	$ (3,482)	$ 1,502
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	20,045	17,943
Bad debt expense	478	(140)
Deferred income tax, net	807	774
Share-based compensation	834	1,294
Loss (gain) on disposal of assets, net	22	(4)
Asset impairments	588	367
Other	40	127
Changes in operating assets and liabilities:
Accounts and other receivables	(5,797)	(6,283)
Inventories and prepaid expenses	1,172	2,930
Accounts payable and accrued liabilities	1,594	(809)
Insurance and claims accruals	(2,745)	(1,220)
Other long-term assets and liabilities	850	(727)
Net cash provided by operating activities	14,406	15,754
Investing activities:
Acquisition of Davis Transfer Company (net of cash)		(305)
Capital expenditures	(9,809)	(25,209)
Proceeds from sale of property and equipment	1,459	7,643
Net cash used in investing activities	(8,350)	(17,871)
Financing activities:
Borrowings under long-term debt	33,200	53,700
Payments on long-term debt	(26,440)	(55,249)
Principal payments on financing lease obligations	(11,366)	(6,375)
Proceeds from obligation under finance lease		10,471
Payments on obligation under finance lease	(1,052)	(219)
Payment of debt issuance costs		(538)
Net change in bank drafts payable	(346)	(391)
Net payments for tax withholdings for vested stock-based awards	(57)	(73)
Net cash (used in) provided by financing activities	(6,061)	1,326
Decrease in cash	(5)	(791)
Cash:
Beginning of period	97	989
End of period	92	198
Supplemental disclosure of cash flow information:
Interest	2,704	2,986
Income taxes	29	$ 998
Supplemental disclosure of non-cash investing:
Sales of revenue equipment included in other receivables	$ 730

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BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2020

BASIS OF PRESENTATION

BASIS OF PRESENTATION

NOTE 1 – BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements include the accounts and operations of USA Truck Inc., and present our financial position as of June 30, 2020 and December 31, 2019 and our results of operations, comprehensive (loss) income and cash flows for the three and six months ended June 30, 2020 and 2019.

These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and do not include all of the information normally included with financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) of the United States.  Additionally, the Company has elected to utilize certain abbreviated reporting requirements available to smaller reporting companies. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

These condensed consolidated financial statements and notes are unaudited.  However, in the opinion of management, these condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of the results for the periods presented.  Results for interim periods are not necessarily indicative of results to be expected for the full year ending December 31, 2020.

The accompanying condensed consolidated financial statements include USA Truck Inc., and its wholly owned subsidiaries: International Freight Services, Inc. (“IFS”), a Delaware corporation; Davis Transfer Company Inc. (“DTC”), a Georgia corporation, Davis Transfer Logistics Inc. (“DTL”), a Georgia corporation, and B & G Leasing, L.L.C. (“B & G”), a Georgia limited liability company.  Collectively, DTC, DTL, and B & G comprise “Davis Transfer Company”.  References in this report to “it,” “we,” “us,” “our,” or the “Company,” and similar expressions refer to USA Truck Inc. and its subsidiaries.  All significant intercompany balances and transactions have been eliminated in preparing the condensed consolidated financial statements.  Certain amounts reported in prior periods have been reclassified to conform to the current year presentation.

Change in estimate

The Company reviews the estimated useful lives and salvage values of its fixed assets on an ongoing basis, based upon, among other things, our experience with similar assets, conditions in the used revenue equipment market, and prevailing industry practice.  During the first quarter of 2020, the Company lowered the salvage value of its tractor fleet from 30% to 25% to better reflect current estimates of the value of such equipment upon its retirement.  This change is being accounted for as a change in estimate.  During the three and six months ended June 30, 2020, this change in estimate resulted in an increase in depreciation and amortization expense of approximately $0.3 million and $0.8 million, respectively.

Risks and Uncertainties

In March 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency.  The rapid spread of the pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy.  In view of the rapidly changing business environment, unprecedented market volatility and heightened degree of uncertainty resulting from COVID-19, we are currently unable to fully determine its future impact on our business.  However, we continue to monitor the progression of the pandemic, further government response and development of treatments and vaccines and their potential effect on our financial position, results of operations, cash flows and liquidity.  These events could have an impact in future periods on certain estimates used in the preparation of our financial results, including, but not limited to impairment of goodwill, other intangible assets and other long-lived assets, income tax provision and recoverability of certain receivables.  Should the pandemic continue for an extended

period of time, the impact on our operations could have a material adverse effect on our financial condition, results of operations, cash flows and liquidity.

Accounting standards issued but not yet adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).  This update requires measurement and recognition of expected versus incurred credit losses for financial assets held.  For smaller reporting companies, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.  We are currently evaluating the effect of adopting ASU 2016-13.

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REVENUE RECOGNITION

6 Months Ended

Jun. 30, 2020

REVENUE RECOGNITION

REVENUE RECOGNITION

NOTE 2 – REVENUE RECOGNITION

The following tables set forth revenue disaggregated by revenue type and segment:

	Three Months Ended June 30,
	2020								2019
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	78,514	$	35,040	$	(3,461)	$	110,093	$	82,664	$	34,698	$	(2,209)	$	115,153
Fuel surcharge		8,083		2,618		(167)		10,534		13,034		4,087		(220)		16,901
Accessorial		2,030		1,080		—		3,110		778		790		—		1,568
Total	$	88,627	$	38,738	$	(3,628)	$	123,737	$	96,476	$	39,575	$	(2,429)	$	133,622

	Six Months Ended June 30,
	2020								2019
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	159,417	$	66,707	$	(6,154)	$	219,970	$	164,086	$	71,328	$	(4,420)	$	230,994
Fuel surcharge		19,371		5,695		(520)		24,546		24,799		7,929		(387)		32,341
Accessorial		3,834		2,160		—		5,994		2,493		1,768		—		4,261
Total	$	182,622	$	74,562	$	(6,674)	$	250,510	$	191,378	$	81,025	$	(4,807)	$	267,596

At June 30, 2020 and December 31, 2019, the Company had contract assets, respresenting our right to consideration for transportation services not yet billed, of $1.4 million and $0.9 million, respectively.

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SEGMENT REPORTING

6 Months Ended

Jun. 30, 2020

SEGMENT REPORTING

SEGMENT REPORTING

NOTE 3 – SEGMENT REPORTING

The Company’s two reportable segments are Trucking and USAT Logistics.  In determining its reportable segments, the Company’s chief operating decision maker focuses on financial information, such as operating revenue, operating expense categories, operating ratios and operating income, as well as on key operating statistics, to make operating decisions.

Trucking. Trucking is comprised of one-way truckload and dedicated freight motor carrier services.  Truckload provides motor carrier services as a medium-haul common and contract carrier.  USA Truck has provided truckload motor carrier services since its inception, and continues to derive the largest portion of its gross revenue from these services.  Dedicated freight provides truckload motor carrier services to specific customers for movement of freight over particular routes at specified times.

USAT Logistics. USAT Logistics’ service offerings consist of freight brokerage, logistics, and rail intermodal services.  Each of these service offerings match customer shipments with available equipment of authorized third-party motor carriers and other service providers.  The Company provides these services to many existing Trucking customers, many of whom prefer to rely on a single service provider, or a small group of service providers, to provide all their transportation solutions.

Revenue equipment assets are not allocated to USAT Logistics as freight services for customers are brokered through arrangements with third-party motor carriers who utilize their own equipment.  To the extent rail intermodal or other USAT Logistics operations require the use of Company-owned assets, they are obtained from the Company’s Trucking segment on an as-needed basis.  Depreciation and amortization expense is allocated to USAT Logistics based on the Company-owned assets specifically utilized to generate USAT Logistics revenue.  All intercompany transactions between segments reflect rates similar to those that would be negotiated with independent third parties.  All other expenses for USAT Logistics are specifically identifiable direct costs or are allocated to USAT Logistics based on relevant cost drivers, as determined by management.

A summary of operating revenue by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating revenue	(in thousands)
Trucking revenue (1)	$	88,627	$	96,476	$	182,622	$	191,378
Trucking intersegment eliminations		(707)		(407)		(1,701)		(769)
Trucking operating revenue		87,920		96,069		180,921		190,609
USAT Logistics revenue		38,738		39,575		74,562		81,025
USAT Logistics intersegment eliminations		(2,921)		(2,022)		(4,973)		(4,038)
USAT Logistics operating revenue		35,817		37,553		69,589		76,987
Total operating revenue	$	123,737	$	133,622	$	250,510	$	267,596

1) Includes foreign revenue of $7.5 million and $9.4 million for the three months ended June 30, 2020 and 2019, respectively, and $16.1 million and $19.0 million for the six months ended June 30, 2020 and 2019, respectively.

A summary of operating income (loss) by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating income (loss)	(in thousands)
Trucking	$	1,176	$	837	$	(511)	$	2,445
USAT Logistics		(176)		1,146		(801)		3,459
Total operating income (loss)	$	1,000	$	1,983	$	(1,312)	$	5,904

A summary of depreciation and amortization by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Depreciation and amortization	(in thousands)
Trucking	$	9,697	$	8,853	$	19,473	$	17,432
USAT Logistics		337		272		572		511
Total depreciation and amortization	$	10,034	$	9,125	$	20,045	$	17,943

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EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

6 Months Ended

Jun. 30, 2020

EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

NOTE 4 – EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

The Company adopted the 2014 Omnibus Incentive Plan (the “Incentive Plan”) in May 2014.  The Incentive Plan replaced the 2004 Equity Incentive Plan and provided for the granting of up to 500,000 shares of common stock through equity-based awards to directors, officers and other key employees and consultants.  The First Amendment to the Incentive Plan was adopted in May 2017, which, among other things, increased the number of shares of common stock available for issuance under the Incentive Plan by an additional 500,000 shares.  The Second Amendment to the Incentive Plan was adopted in May 2019, which, among other things, increased the number of shares of common stock available for issuance under the Incentive Plan by an additional 500,000 shares.  As of June 30, 2020, 488,617 shares remain available under the Incentive Plan for the issuance of future equity-based compensation awards.

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ACCRUED EXPENSES

6 Months Ended

Jun. 30, 2020

ACCRUED EXPENSES

ACCRUED EXPENSES

NOTE 5 – ACCRUED EXPENSES

Accrued expenses consist of the following:

	June 30, 2020		December 31, 2019
	(in thousands)
Salaries, wages and employee benefits	$	5,532	$	3,668
Federal and state tax accruals		1,677		1,648
Other (1)		1,129		1,202
Total accrued expenses	$	8,338	$	6,518

1) No single item included within other accrued expenses exceeded 5.0% of our total current liabilities.

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DEBT

6 Months Ended

Jun. 30, 2020

DEBT

DEBT

NOTE 6 –DEBT

Long-term debt consisted of the following:

	June 30, 2020		December 31, 2019
	(in thousands)
Revolving credit agreement	$	83,075	$	73,225
Sale leaseback finance obligations		10,731		11,783
Insurance premium financing (2019)		1,416		4,506
		95,222		89,514
Less current maturities		(3,064)		(6,165)
Total long-term debt	$	92,158	$	83,349

Credit facility

On January 31, 2019, the Company, entered into a five year, $225.0 million senior secured revolving credit facility (the “Credit Facility”) with a group of lenders and Bank of America, N.A., as agent (the “Agent”) pursuant to the terms of an Amended and Restated Loan and Security Agreement.  The Credit Facility replaced the Company’s previous five year, $170.0 million senior secured revolving credit facility dated February 15, 2015.  On April 7, 2020, the Company, in accordance with the terms of the Credit Agreement, provided notice to the Agent that effective as of April 20, 2020, the Company was permanently reducing the revolving credit commitment under the Credit Agreement by $55.0 million such that the revolving credit commitment is now $170.0 million.  The reduction in the revolving credit commitment will also reduce the fees paid by the Company in connection with such commitment.

The Credit Facility is structured as a $170.0 million revolving credit facility, with an accordion feature that, so long as no event of default exists, allows the Company to request an increase in the revolving credit facility of up to $75.0 million, exercisable in increments of at least $20.0 million.  The Credit Facility is a five year facility scheduled to terminate on January 31, 2024.  Borrowings under the Credit Facility are classified as either “base rate loans” or “LIBOR loans”.  Base rate loans accrue interest at a base rate equal to the Agent’s prime rate plus an applicable margin adjusted quarterly between 0.25% and 0.75% based on the Company’s consolidated fixed charge coverage ratio.  LIBOR loans accrue interest at the London Interbank Offered Rate (“LIBOR”) plus an applicable margin adjusted quarterly between 1.25% and 1.75% based on the Company’s consolidated fixed charge coverage ratio.  The Credit Facility includes, within its $170.0 million revolving credit facility, a letter of credit sub-facility in an aggregate amount of $15.0 million and a swingline sub-facility (the “Swingline”) in an aggregate amount of $25.0 million.  An unused line fee of 0.25% is applied to the average daily amount by which the lenders’ aggregate revolving commitments exceed the outstanding principal amount of revolver loans and the aggregate undrawn amount of all outstanding letters of credit issued under the Credit Facility.  The Credit Facility is secured by a pledge of substantially all of the Company’s assets, except for any real estate or revenue equipment financed outside the Credit Facility.

Borrowings under the Credit Facility are subject to a borrowing base limited to the lesser of (A) $170.0 million; or (B) the sum of (i) 90.0% of eligible investment grade accounts receivable (reduced to 85.0% in certain situations), plus (ii) 85.0% of eligible non-investment grade accounts receivable, plus (iii) the lesser of (a) 85.0% of eligible unbilled accounts receivable and (b) $10.0 million, plus (iv) the product of 85.0% multiplied by the net orderly liquidation value percentage applied to the net book value of eligible revenue equipment, plus (v)  85.0% multiplied by the net book value of otherwise eligible newly acquired revenue equipment that has not yet been subject to an appraisal.  The borrowing

base is reduced by an availability reserve, including reserves based on dilution and certain other customary reserves.

The Credit Facility contains a single financial covenant, which requires a consolidated fixed charge coverage ratio of at least 1.0 to 1.0 that is triggered in the event excess availability under the Credit Facility falls below 10.0% of the lenders’ total commitments.  Also, certain restrictions regarding the Company’s ability to pay dividends, make certain investments, prepay certain indebtedness, execute share repurchase programs and enter into certain acquisitions and hedging arrangements are triggered in the event excess availability under the Credit Facility falls below 20.0% of the lenders’ total commitments.

The Company had no borrowings under the Swingline as of June 30, 2020.  The average interest rate including all borrowings made under the Credit Facility as of June 30, 2020 was 2.90%.  As debt is repriced on a monthly basis, the borrowings under the Credit Facility approximate fair value.  As of June 30, 2020, the Company had $7.4 million in letters of credit outstanding and had approximately $38 million available to borrow under the Credit Facility taking into account borrowing base availability.

Sale-leaseback transactions

In July 2019, the Company entered into a sale-leaseback transaction whereby it sold tractors for approximately $2.3 million and concurrently entered into a finance lease agreement for the sold tractors with a five year term.  Under the lease agreement, the Company paid an initial monthly payment of approximately $0.03 million.  At the end of the lease, the Company has the option to purchase the tractors.  This transaction does not qualify for sale-leaseback accounting due to the option to repurchase the tractors and is therefore treated as a financing obligation.

In April 2019, the Company entered into a sale-leaseback transaction whereby it sold tractors for approximately $10.5 million and concurrently entered into a finance lease agreement for the sold tractors with a five year term.  Under the lease agreement, the Company paid an initial monthly payment of approximately $0.1 million.  At the end of the lease, the Company has the option to purchase the tractors for the greater of fair market value or 32.5% of the original cost.  This transaction does not qualify for sale-leaseback accounting due to the option to repurchase the tractors and is therefore treated as a financing obligation.

Insurance premium financing

In October 2019, the Company entered into a short-term agreement to finance approximately $4.5 million with a third-party financing company for a portion of the Company’s annual insurance premiums.

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LEASES

6 Months Ended

Jun. 30, 2020

LEASES

LEASES

NOTE 7 – LEASES

The components of lease expense for each of the periods presented are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
	(in thousands)
Operating lease costs	$	2,052	$	2,356	$	4,218	$	4,515
Finance lease costs:
Amortization of assets		4,784		2,959		9,507		5,650
Interest on lease liabilities		763		603		1,553		1,149
Total finance lease costs		5,547		3,562		11,060		6,799
Variable and short-term lease costs		284		212		411		773
Total lease costs	$	7,883	$	6,130	$	15,689	$	12,087

Supplemental information and balance sheet location related to leases is as follows:

	June 30, 2020			December 31, 2019
Operating leases:	(dollars in thousands)
Operating lease right-of-use assets	$	7,866		$	11,775
Current operating lease obligations		3,028			6,050
Long-term operating lease obligations		4,966			5,812
Total operating lease liabilities	$	7,994		$	11,862
Finance leases:
Property and equipment, at cost		121,889			120,236
Accumulated amortization		(35,990)			(30,990)
Property and equipment, net	$	85,899		$	89,246
Current finance lease obligations		25,928			30,779
Long-term finance lease obligations		60,363			58,397
	$	86,291		$	89,176
Weighted average remaining lease term:		(in months)			(in months)
Operating leases		52			45
Finance leases		42			44
Weighted average discount rate:
Operating leases		4.00	%		4.03	%
Finance leases		3.50	%		3.34	%

Supplemental cash flow information related to leases is as follows for the six months ended:

	June 30, 2020		June 30, 2019
Cash paid for amounts included in measurement of liabilities:	(in thousands)
Operating cash flows from operating leases	$	42	$	3,885
Operating cash flows from finance leases		1,553		1,149
Financing cash flows from finance leases		11,366		6,375
ROU assets obtained in exchange for lease liabilities:
Operating leases		—		931
Finance leases		8,481		16,303

OTHER COMMITMENTS

As of June 30, 2020, the Company had no noncancellable commitments for the acquisition of revenue or non-revenue equipment.

During July 2020, the Company entered into an agreement to take delivery of 189 tractors through a lease agreement.

RELATED PARTY LEASE

In the normal course of business, the Company leases office and shop space from a related party under a monthly operating lease.  Rent expense for this space was approximately $0.04 million for the three months ended June 30, 2020 and 2019, and $0.08 million for the six months ended June 30, 2020 and 2019, respectively.  This expense is included in the “Operations and maintenance” line item in the accompanying condensed consolidated statement of (loss) income and comprehensive (loss) income.

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INCOME TAXES

6 Months Ended

Jun. 30, 2020

INCOME TAXES

INCOME TAXES

NOTE 8 – INCOME TAXES

During the three months ended June 30, 2020 and 2019, the Company’s effective tax rate was 211.4% and 99.5%, respectively.  During the six months ended June 30, 2020 and 2019, the Company’s effective tax rate was 19.8% and 33.5%, respectively.  The Company’s effective tax rate, when compared to the federal statutory rate of 21%, is primarily affected by state income taxes, net of federal income tax effect for the current year periods, and permanent differences, the most significant of which is the effect of the partially non-deductible per diem pay structure for our drivers.  Drivers may elect to receive non-taxable per diem pay in lieu of a portion of their taxable wages.  This per diem program increases the Company’s drivers’ net pay per mile, after taxes, while decreasing gross pay, before taxes.  Per diem pay is partially non-deductible by the Company under current IRS regulations.  As a result, salaries, wages and employee benefits costs are slightly lower and effective income tax rates are higher than the statutory rate.  Due to the partially non-deductible effect of per diem pay, the Company’s tax rate will change based on fluctuations in earnings (losses) and in the number of drivers who elect to receive this pay structure.  Generally, as pretax income or loss increases, the impact of the driver per diem program on the Company’s effective tax rate decreases, because aggregate per diem pay becomes smaller in relation to pretax income or loss, while in periods where earnings are at or near breakeven the impact of the per diem program on the Company’s effective tax rate can be significant.

As of June 30, 2020 and December 31, 2019, the Company had income tax receivables of approximately $3.5 million and $1.5 million, respectively, presented in the “Other receivables” line item in the condensed consolidated balance sheet.

During the six month period ended June 30, 2020 our effective tax rate was also affected by changes stemming from the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted in 2020, which allows a 5 year federal net operating loss carryback for federal income tax purposes to tax periods where the federal statutory rate was 35%, resulting in a tax benefit.  During the six months ended June 30, 2020 and 2019, the Company’s tax rate was negatively affected by vesting of equity-based compensation at a lower stock price than the price at which it was granted, as well as a non-deductible officer compensation, resulting in an increase to tax expense.

The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period.  We determined that since small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate.  As such, we have used a cut-off method to calculate taxes for the three and six months ended June 30, 2020.

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(LOSS) EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2020

(LOSS) EARNINGS PER SHARE

(LOSS) EARNINGS PER SHARE

NOTE 9 – (LOSS) EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted (loss) earnings per share:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Numerator:	(in thousands, except per share amounts)
Net (loss) income	$	(931)	$	1	$	(3,482)	$	1,502
Denominator:
Denominator for basic earnings (loss) per share – weighted average shares		8,820		8,554		8,737		8,479
Effect of dilutive securities:
Employee restricted stock and incentive stock options		—		13		—		19
Denominator for diluted earnings (loss) per share – adjusted weighted average shares and assumed conversion		8,820		8,567		8,737		8,498
Basic (loss) earnings per share	$	(0.11)	$	0.00	$	(0.40)	$	0.18
Diluted (loss) earnings per share	$	(0.11)	$	0.00	$	(0.40)	$	0.18
Weighted average anti-dilutive employee restricted stock and incentive stock options		348		509		393		364

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LEGAL PROCEEDINGS

6 Months Ended

Jun. 30, 2020

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS

NOTE 10 – LEGAL PROCEEDINGS

The Company is party to routine litigation incidental to its business, primarily involving claims for personal injury and property damage incurred in the transportation of freight.  The Company maintains insurance to cover liabilities in excess of certain self-insured retention levels.  Though management believes these claims to be immaterial to the Company’s long-term financial position, adverse results of one or more of these claims could have a material adverse effect on the Company’s financial position or results of operations in any given reporting period.

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LONG-LIVED ASSET IMPAIRMENT

6 Months Ended

Jun. 30, 2020

LONG-LIVED ASSET IMPAIRMENT

LONG-LIVED ASSET IMPAIRMENT

NOTE 11 – LONG-LIVED ASSET IMPAIRMENT

During the second quarter of 2020, the Company reviewed the values of its assets held for sale and determined a subset of older model year tractors required an impairment of approximately $0.5 million.  In order to determine the fair values of the tractors, auction data was used from recent sales of similar tractors which is a Level 2 fair value measurement under the fair value hierarchy.

During the second quarter of 2020, in response to the closure of our Van Buren, Arkansas terminal the Company contracted with a third-party to appraise the terminal and the owned lands surrounding it.  As a result of the appraisal, an impairment was recorded for approximately $0.1 million for a parcel of land that had a book value in excess of its fair value.  The appraisal report is considered a Level 2 fair value measurement under the fair value hierarchy.

During the second quarter of 2019, the Company reviewed the values of its assets held for sale and determined a subset of tractors that the Company had recently experienced losses on disposal of similar tractors required an impairment of approximately $0.4 million.  The fair value was determined using quotes from third parties for the purchase of the tractors which is a Level 1 fair value measurement under the fair value hierarchy.

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REVENUE RECOGNITION (Tables)

6 Months Ended

Jun. 30, 2020

REVENUE RECOGNITION

Disaggregation of Revenue

The following tables set forth revenue disaggregated by revenue type and segment:

	Three Months Ended June 30,
	2020								2019
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	78,514	$	35,040	$	(3,461)	$	110,093	$	82,664	$	34,698	$	(2,209)	$	115,153
Fuel surcharge		8,083		2,618		(167)		10,534		13,034		4,087		(220)		16,901
Accessorial		2,030		1,080		—		3,110		778		790		—		1,568
Total	$	88,627	$	38,738	$	(3,628)	$	123,737	$	96,476	$	39,575	$	(2,429)	$	133,622

	Six Months Ended June 30,
	2020								2019
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	159,417	$	66,707	$	(6,154)	$	219,970	$	164,086	$	71,328	$	(4,420)	$	230,994
Fuel surcharge		19,371		5,695		(520)		24,546		24,799		7,929		(387)		32,341
Accessorial		3,834		2,160		—		5,994		2,493		1,768		—		4,261
Total	$	182,622	$	74,562	$	(6,674)	$	250,510	$	191,378	$	81,025	$	(4,807)	$	267,596

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SEGMENT REPORTING (Tables)

6 Months Ended

Jun. 30, 2020

SEGMENT REPORTING

Schedule of segment information by segment

A summary of operating revenue by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating revenue	(in thousands)
Trucking revenue (1)	$	88,627	$	96,476	$	182,622	$	191,378
Trucking intersegment eliminations		(707)		(407)		(1,701)		(769)
Trucking operating revenue		87,920		96,069		180,921		190,609
USAT Logistics revenue		38,738		39,575		74,562		81,025
USAT Logistics intersegment eliminations		(2,921)		(2,022)		(4,973)		(4,038)
USAT Logistics operating revenue		35,817		37,553		69,589		76,987
Total operating revenue	$	123,737	$	133,622	$	250,510	$	267,596

1) Includes foreign revenue of $7.5 million and $9.4 million for the three months ended June 30, 2020 and 2019, respectively, and $16.1 million and $19.0 million for the six months ended June 30, 2020 and 2019, respectively.

A summary of operating income (loss) by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating income (loss)	(in thousands)
Trucking	$	1,176	$	837	$	(511)	$	2,445
USAT Logistics		(176)		1,146		(801)		3,459
Total operating income (loss)	$	1,000	$	1,983	$	(1,312)	$	5,904

A summary of depreciation and amortization by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Depreciation and amortization	(in thousands)
Trucking	$	9,697	$	8,853	$	19,473	$	17,432
USAT Logistics		337		272		572		511
Total depreciation and amortization	$	10,034	$	9,125	$	20,045	$	17,943

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ACCRUED EXPENSES (Tables)

6 Months Ended

Jun. 30, 2020

ACCRUED EXPENSES

Schedule of accrued expenses

	June 30, 2020		December 31, 2019
	(in thousands)
Salaries, wages and employee benefits	$	5,532	$	3,668
Federal and state tax accruals		1,677		1,648
Other (1)		1,129		1,202
Total accrued expenses	$	8,338	$	6,518

1) No single item included within other accrued expenses exceeded 5.0% of our total current liabilities.

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DEBT (Tables)

6 Months Ended

Jun. 30, 2020

DEBT

Schedule of long-term debt instruments

Long-term debt consisted of the following:

	June 30, 2020		December 31, 2019
	(in thousands)
Revolving credit agreement	$	83,075	$	73,225
Sale leaseback finance obligations		10,731		11,783
Insurance premium financing (2019)		1,416		4,506
		95,222		89,514
Less current maturities		(3,064)		(6,165)
Total long-term debt	$	92,158	$	83,349

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LEASES (Tables)

6 Months Ended

Jun. 30, 2020

LEASES

Schedule of lease expense

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
	(in thousands)
Operating lease costs	$	2,052	$	2,356	$	4,218	$	4,515
Finance lease costs:
Amortization of assets		4,784		2,959		9,507		5,650
Interest on lease liabilities		763		603		1,553		1,149
Total finance lease costs		5,547		3,562		11,060		6,799
Variable and short-term lease costs		284		212		411		773
Total lease costs	$	7,883	$	6,130	$	15,689	$	12,087

Schedule of supplemental balance sheet information

	June 30, 2020			December 31, 2019
Operating leases:	(dollars in thousands)
Operating lease right-of-use assets	$	7,866		$	11,775
Current operating lease obligations		3,028			6,050
Long-term operating lease obligations		4,966			5,812
Total operating lease liabilities	$	7,994		$	11,862
Finance leases:
Property and equipment, at cost		121,889			120,236
Accumulated amortization		(35,990)			(30,990)
Property and equipment, net	$	85,899		$	89,246
Current finance lease obligations		25,928			30,779
Long-term finance lease obligations		60,363			58,397
	$	86,291		$	89,176
Weighted average remaining lease term:		(in months)			(in months)
Operating leases		52			45
Finance leases		42			44
Weighted average discount rate:
Operating leases		4.00	%		4.03	%
Finance leases		3.50	%		3.34	%

Schedule of supplemental cash flow and other information

	June 30, 2020		June 30, 2019
Cash paid for amounts included in measurement of liabilities:	(in thousands)
Operating cash flows from operating leases	$	42	$	3,885
Operating cash flows from finance leases		1,553		1,149
Financing cash flows from finance leases		11,366		6,375
ROU assets obtained in exchange for lease liabilities:
Operating leases		—		931
Finance leases		8,481		16,303

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(LOSS) EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2020

(LOSS) EARNINGS PER SHARE

Schedule of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted (loss) earnings per share:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Numerator:	(in thousands, except per share amounts)
Net (loss) income	$	(931)	$	1	$	(3,482)	$	1,502
Denominator:
Denominator for basic earnings (loss) per share – weighted average shares		8,820		8,554		8,737		8,479
Effect of dilutive securities:
Employee restricted stock and incentive stock options		—		13		—		19
Denominator for diluted earnings (loss) per share – adjusted weighted average shares and assumed conversion		8,820		8,567		8,737		8,498
Basic (loss) earnings per share	$	(0.11)	$	0.00	$	(0.40)	$	0.18
Diluted (loss) earnings per share	$	(0.11)	$	0.00	$	(0.40)	$	0.18
Weighted average anti-dilutive employee restricted stock and incentive stock options		348		509		393		364

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BASIS OF PRESENTATION (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2020
Change in Accounting Estimate [Line Items]
Pre-tax increase in depreciation expense from a change in the Tractor Fleet salvage value percentage	$ 0.3		$ 0.8
Salvage Value
Change in Accounting Estimate [Line Items]
Tractor Fleet previous salvage value (as a percent)		30.00%
Tractor Fleet salvage value (as a percent)		25.00%

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REVENUE RECOGNITION - Disaggregation of Revenue by Type (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Disaggregation of Revenue
Revenues	$ 123,737	$ 133,622	$ 250,510	$ 267,596
Contract assets	1,400		1,400		$ 900
Intersegment Eliminations
Disaggregation of Revenue
Revenues	(3,628)	(2,429)	(6,674)	(4,807)
Trucking
Disaggregation of Revenue
Revenues	87,920	96,069	180,921	190,609
Trucking | Operating Segments
Disaggregation of Revenue
Revenues	88,627	96,476	182,622	191,378
Trucking | Intersegment Eliminations
Disaggregation of Revenue
Revenues	(707)	(407)	(1,701)	(769)
USAT Logistics
Disaggregation of Revenue
Revenues	35,817	37,553	69,589	76,987
USAT Logistics | Operating Segments
Disaggregation of Revenue
Revenues	38,738	39,575	74,562	81,025
USAT Logistics | Intersegment Eliminations
Disaggregation of Revenue
Revenues	(2,921)	(2,022)	(4,973)	(4,038)
Freight
Disaggregation of Revenue
Revenues	110,093	115,153	219,970	230,994
Freight | Intersegment Eliminations
Disaggregation of Revenue
Revenues	(3,461)	(2,209)	(6,154)	(4,420)
Freight | Trucking | Operating Segments
Disaggregation of Revenue
Revenues	78,514	82,664	159,417	164,086
Freight | USAT Logistics | Operating Segments
Disaggregation of Revenue
Revenues	35,040	34,698	66,707	71,328
Fuel surcharge
Disaggregation of Revenue
Revenues	10,534	16,901	24,546	32,341
Fuel surcharge | Intersegment Eliminations
Disaggregation of Revenue
Revenues	(167)	(220)	(520)	(387)
Fuel surcharge | Trucking | Operating Segments
Disaggregation of Revenue
Revenues	8,083	13,034	19,371	24,799
Fuel surcharge | USAT Logistics | Operating Segments
Disaggregation of Revenue
Revenues	2,618	4,087	5,695	7,929
Accessorial
Disaggregation of Revenue
Revenues	3,110	1,568	5,994	4,261
Accessorial | Trucking | Operating Segments
Disaggregation of Revenue
Revenues	2,030	778	3,834	2,493
Accessorial | USAT Logistics | Operating Segments
Disaggregation of Revenue
Revenues	$ 1,080	$ 790	$ 2,160	$ 1,768

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SEGMENT REPORTING - Other (Details)	6 Months Ended
	Jun. 30, 2020 segment
SEGMENT REPORTING
Number of reportable segments	2

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SEGMENT REPORTING - Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Segment Reporting Information
Operating revenue	$ 123,737	$ 133,622	$ 250,510	$ 267,596
Operating income (loss)	1,000	1,983	(1,312)	5,904
Depreciation and amortization	10,034	9,125	20,045	17,943
Trucking
Segment Reporting Information
Operating revenue	87,920	96,069	180,921	190,609
USAT Logistics
Segment Reporting Information
Operating revenue	35,817	37,553	69,589	76,987
Operating Segments | Trucking
Segment Reporting Information
Operating revenue	88,627	96,476	182,622	191,378
Operating income (loss)	1,176	837	(511)	2,445
Depreciation and amortization	9,697	8,853	19,473	17,432
Operating Segments | USAT Logistics
Segment Reporting Information
Operating revenue	38,738	39,575	74,562	81,025
Operating income (loss)	(176)	1,146	(801)	3,459
Depreciation and amortization	337	272	572	511
Intersegment Eliminations
Segment Reporting Information
Operating revenue	(3,628)	(2,429)	(6,674)	(4,807)
Intersegment Eliminations | Trucking
Segment Reporting Information
Operating revenue	(707)	(407)	(1,701)	(769)
Intersegment Eliminations | USAT Logistics
Segment Reporting Information
Operating revenue	(2,921)	(2,022)	(4,973)	(4,038)
Foreign countries | Operating Segments | Trucking
Segment Reporting Information
Operating revenue	$ 7,500	$ 9,400	$ 16,100	$ 19,000

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EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS (Details) - Omnibus Incentive Plan (the "Incentive Plan")	6 Months Ended
	Jun. 30, 2020 shares
Defined Benefit Plan Disclosure
Number of shares authorized (in shares)	500,000
Number of additional shares authorized (in shares)	500,000
Number of shares available for grant (in shares)	488,617

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ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
ACCRUED EXPENSES
Salaries, wages and employee benefits	$ 5,532	$ 3,668
Federal and state tax accruals	1,677	1,648
Other	1,129	1,202
Total accrued expenses	$ 8,338	$ 6,518

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DEBT - Summary of Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Apr. 20, 2020	Dec. 31, 2019	Jan. 31, 2019	Feb. 15, 2015
Debt Instruments
Total long-term debt, including current maturities	$ 95,222		$ 89,514
Less current maturities	(3,064)		(6,165)
Total long-term debt	92,158		83,349
Credit Facility
Debt Instruments
Total long-term debt, including current maturities	83,075	$ 170,000	73,225	$ 225,000	$ 170,000
Sale leaseback finance obligations
Debt Instruments
Total long-term debt, including current maturities	10,731		11,783
Insurance Premiums Financing Note | Sale leaseback finance obligations
Debt Instruments
Total long-term debt, including current maturities	$ 1,416		$ 4,506

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DEBT - Other (Details) - USD ($)			1 Months Ended		6 Months Ended
	Jan. 31, 2019	Feb. 15, 2015	Jul. 31, 2019	Apr. 30, 2019	Jun. 30, 2019	Jun. 30, 2020	Apr. 20, 2020	Dec. 31, 2019	Oct. 31, 2019
Debt Instruments
Long-term debt						$ 95,222,000		$ 89,514,000
Borrowing based threshold for eligible unbilled accounts receivable (as a percent)	85.00%
Remaining borrowing capacity						$ 38,000,000
Weighted average interest rate						2.90%
Proceeds from obligation under finance lease			$ 2,300,000		$ 10,471,000
Finance lease contract term			5 years
Initial monthly payment in sale-leaseback transaction			$ 30,000.00
Tractors
Debt Instruments
Proceeds from obligation under finance lease				$ 10,500,000
Finance lease contract term				5 years
Initial monthly payment in sale-leaseback transaction				$ 100,000
Percentage of original cost at which Company has option to purchase at end of lease				32.50%
Sale leaseback finance obligations
Debt Instruments
Long-term debt						$ 10,731,000		11,783,000
Credit Facility
Debt Instruments
Long-term debt	$ 225,000,000.0	$ 170,000,000.0				83,075,000	$ 170,000,000.0	73,225,000
Maximum increase available subject to lender approval	75,000,000.0
Excercisable, incremental borrowing capacity	$ 20,000,000.0
Term of debt instrument	5 years	5 years
Increase (decrease) in borrowing capacity							$ (55,000,000.0)
Fixed charge coverage ratio	1.0
Commitment fee percentage	0.25%
Borrowing base before additions of eligible revenue equipment	$ 10,000,000.0
Newly acquired revenue equipment (as a percent)	85.00%
Eligible revenue equipment (as a percent)	85.00%
Percentage of maximum revolver amount	10.00%
Minimum excess availability percentage of maximum revolver amount	20.00%
Letter of credit outstanding						7,400,000
Credit Facility | Minimum
Debt Instruments
Borrowing based threshold eligible investment grade accounts receivable (as a percent)	85.00%
Credit Facility | Maximum
Debt Instruments
Borrowing based threshold eligible investment grade accounts receivable (as a percent)	90.00%
Swingline sub-facility
Debt Instruments
Long-term debt	$ 25,000,000.0					0
Letter of credit sub-facility
Debt Instruments
Long-term debt	$ 15,000,000.0
Base Rate | Credit Facility | Minimum
Debt Instruments
Basis spread on variable rate (as a percent)	0.25%
Base Rate | Credit Facility | Maximum
Debt Instruments
Basis spread on variable rate (as a percent)	0.75%
London Interbank Offered Rate (LIBOR) | Credit Facility | Minimum
Debt Instruments
Basis spread on variable rate (as a percent)	1.25%
London Interbank Offered Rate (LIBOR) | Credit Facility | Maximum
Debt Instruments
Basis spread on variable rate (as a percent)	1.75%
Insurance Premiums Financing Note
Debt Instruments
Accrued Premium Insurance Payable									$ 4,500,000
Insurance Premiums Financing Note | Sale leaseback finance obligations
Debt Instruments
Long-term debt						$ 1,416,000		$ 4,506,000

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LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
LEASES
Operating lease costs	$ 2,052	$ 2,356	$ 4,218	$ 4,515
Finance lease costs:
Amortization of assets	4,784	2,959	9,507	5,650
Interest on lease liabilities	763	603	1,553	1,149
Total finance lease costs	5,547	3,562	11,060	6,799
Variable and short-term lease costs	284	212	411	773
Total lease costs	$ 7,883	$ 6,130	$ 15,689	$ 12,087

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LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Operating leases:
Operating leases - right of use assets	$ 7,866	$ 11,775
Current operating lease obligations	3,028	6,050
Long-term operating lease obligations	4,966	5,812
Total operating lease liabilities	7,994	11,862
Finance leases:
Property and equipment, at cost	385,174	372,885
Accumulated amortization	(142,414)	(124,216)
Property and equipment, net	242,760	248,669
Current finance lease obligations	25,928	30,779
Long-term finance lease obligations	60,363	58,397
Total lease obligations	$ 86,291	$ 89,176
Weighted average remaining lease term:
Operating leases	52 months	45 months
Finance leases	42 months	44 months
Weighted average discount rate:
Operating leases	4.00%	4.03%
Finance leases	3.50%	3.34%
Equipment finance leases
Finance leases:
Property and equipment, at cost	$ 121,889	$ 120,236
Accumulated amortization	(35,990)	(30,990)
Property and equipment, net	$ 85,899	$ 89,246

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LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$ 3,885	$ 42
Operating cash flows from finance leases	1,149	1,553
Financing cash flows from finance leases	6,375	11,366	$ 6,375
ROU assets obtained in exchange for lease liabilities:
Operating leases	931
Finance leases	$ 16,303	$ 8,481

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LEASES - Other (Details) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Jul. 31, 2020 item	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)
Lease details
Noncancellable commitments for purchases of equipment		$ 0		$ 0
Lease rent expense		$ 40	$ 40	$ 80	$ 80
Tractors
Lease details
Number of units under lease agreement | item	189

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INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
INCOME TAXES
Effective income tax rate reconciliation percent	211.40%		99.50%		19.80%	33.50%
Effective income tax rate reconciliation at federal statutory income tax rate, percent		21.00%		21.00%
Income tax receivable	$ 3.5				$ 3.5		$ 1.5
CARES net operating losses carryback period					5 years
CARES net operating losses carryback federal statutory rate (as a percent)					35.00%

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(LOSS) EARNINGS PER SHARE - Computation of Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
(LOSS) EARNINGS PER SHARE
Net (loss) income	$ (931)	$ (2,551)	$ 1	$ 1,501	$ (3,482)	$ 1,502
Denominator:
Denominator for basic earnings (loss) per share - weighted average shares (in shares)	8,820		8,554		8,737	8,479
Effect of dilutive securities:
Employee restricted stock and incentive stock options (in shares)			13			19
Denominator for diluted earnings (loss) per share - adjusted weighted average shares and assumed conversion (in shares)	8,820		8,567		8,737	8,498
Basic (loss) earnings per share (in dollars per share)	$ (0.11)		$ 0.00		$ (0.40)	$ 0.18
Diluted (loss) earnings per share (in dollars per share)	$ (0.11)		$ 0.00		$ (0.40)	$ 0.18
Weighted average anti-dilutive employee restricted stock and incentive stock options (in shares)	348		509		393	364

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LONG-LIVED ASSET IMPAIRMENT (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Long-lived asset impairment
Asset impairments	$ 588	$ 367	$ 588	$ 367
Older model year tractors
Long-lived asset impairment
Asset impairments	500
Van Buren, AR Terminal
Long-lived asset impairment
Asset impairments	$ 100
Tractors
Long-lived asset impairment
Asset impairments		$ 400