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, 2022

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 ☒	Non-accelerated filer [ ]
Smaller reporting company ☒		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 August 5, 2022, was 9,033,766

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, 2022, and December 31, 2021		2
		Condensed Consolidated Statements of Income and Comprehensive Income (unaudited) - Three and six months ended June 30, 2022, and June 30, 2021		3
		Condensed Consolidated Statements of Stockholders’ Equity (unaudited) - Three months ended March 31, and June 30, 2022, and March 31, and June 30, 2021		4
		Condensed Consolidated Statements of Cash Flows (unaudited) – Six months ended June 30, 2022, and June 30, 2021		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		30
4.		Controls and Procedures		31
		PART II – OTHER INFORMATION
1.		Legal Proceedings		31
1A.		Risk Factors		31
2.		Unregistered Sales of Equity Securities and Use of Proceeds		32
3.		Defaults Upon Senior Securities		32
4.		Mine Safety Disclosures		32
5.		Other Information		32
6.		Exhibits		33
		Signatures		34

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

USA TRUCK INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

Assets	June 30, 2022		December 31, 2021
Current assets:	(in thousands, except share data)
Cash and restricted cash (restricted cash of $8,499 and $405, respectively)	$	10,699	$	1,352
Receivables, net of allowance for doubtful accounts of $294 and $490, respectively		116,538		100,166
Inventories		1,236		1,387
Assets held for sale		1,216		—
Prepaid expenses and other current assets		7,645		10,103
Total current assets		137,334		113,008
Property and equipment:
Land and structures		28,872		34,266
Revenue equipment		337,998		316,492
Service, office and other equipment		25,503		31,213
Property and equipment, at cost		392,373		381,971
Accumulated depreciation and amortization		(165,110)		(175,024)
Property and equipment, net		227,263		206,947
Operating leases - right of use assets		25,450		22,898
Goodwill		5,231		5,231
Other intangibles, net		13,170		13,815
Other assets		3,167		2,136
Total assets	$	411,615	$	364,035
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	46,673	$	36,378
Current portion of insurance and claims accruals		10,098		8,973
Accrued expenses		14,390		10,006
Current finance lease obligations		16,834		14,095
Current operating lease obligations		7,221		6,679
Long-term debt, current maturities		16,956		11,069
Total current liabilities		112,172		87,200
Other long-term liabilities		302		342
Long-term debt, less current maturities		53,241		63,355
Long-term finance lease obligations		69,688		56,274
Long-term operating lease obligations		18,665		16,644
Deferred income taxes		22,049		21,914
Insurance and claims accruals, less current portion		7,112		6,881
Total liabilities		283,229		252,610
Commitments and contingencies		—		—
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 12,481,442 shares, and 12,263,030 shares, respectively		125		123
Additional paid-in capital		66,324		63,752
Retained earnings		119,593		103,283
Less treasury stock, at cost (3,447,676 shares, and 3,367,418 shares, respectively)		(57,656)		(55,733)
Total stockholders’ equity		128,386		111,425
Total liabilities and stockholders’ equity	$	411,615	$	364,035

See accompanying notes to condensed consolidated financial statements.

2

USA TRUCK INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(in thousands, except per share data)
Operating revenue	$	202,130	$	170,031	$	403,193	$	328,536
Operating expenses:
Salaries, wages and employee benefits		42,238		36,488		84,125		73,043
Fuel and fuel taxes		22,638		12,414		39,675		23,858
Depreciation and amortization		8,986		9,163		17,010		18,733
Insurance and claims		7,046		5,181		13,669		10,990
Equipment rent		1,526		2,048		3,360		3,997
Operations and maintenance		9,925		8,783		18,440		15,849
Purchased transportation		95,692		82,938		194,011		157,041
Operating taxes and licenses		1,273		1,323		2,533		2,595
Communications and utilities		735		796		1,741		1,600
Gain on disposal of assets, net		(881)		(140)		(7,282)		(317)
Merger costs		2,132		—		2,132		—
Other		4,968		4,108		9,244		8,172
Total operating expenses		196,278		163,102		378,658		315,561
Operating income		5,852		6,929		24,535		12,975
Other expenses:
Interest expense, net		1,542		1,014		2,959		2,039
Other, net		84		49		152		110
Total other expenses, net		1,626		1,063		3,111		2,149
Income before income taxes		4,226		5,866		21,424		10,826
Income tax expense		1,027		1,673		5,114		3,036
Consolidated net income and comprehensive income	$	3,199	$	4,193	$	16,310	$	7,790
Net earnings per share:
Average shares outstanding (basic)		8,876		8,806		8,904		8,826
Basic earnings per share	$	0.36	$	0.48	$	1.83	$	0.88
Average shares outstanding (diluted)		8,987		8,947		9,062		8,976
Diluted earnings per share	$	0.36	$	0.47	$	1.80	$	0.87

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, 2021	12,263	$	123	$	63,752	$	103,283	$	(55,733)	$	111,425
Stock-based compensation	—		—		748		—		—		748
Restricted stock award grant	199		2		(2)		—		—		—
Forfeited restricted stock	—		—		1,416		—		(1,416)		—
Net share settlement related to vested equity awards	(7)		—		(592)		—		(488)		(1,080)
Net income	—		—		—		13,111		—		13,111
Balance at March 31, 2022	12,455	$	125	$	65,322	$	116,394	$	(57,637)	$	124,204
Stock-based compensation	—		—		1,011		—		—		1,011
Restricted stock award grant	27		—		—		—		—		—
Net share settlement related to vested equity awards	(1)		—		(9)		—		(19)		(28)
Net income	—		—		—		3,199		—		3,199
Balance at June 30, 2022	12,481	$	125	$	66,324	$	119,593	$	(57,656)	$	128,386

	Common Stock			Additional
		Par		Paid-in		Retained		Treasury
	Shares	Value		Capital		Earnings		Stock		Total
	(in thousands)
Balance at December 31, 2020	12,038	$	120	$	60,692	$	78,515	$	(54,626)	$	84,701
Stock-based compensation	—		—		168		—		—		168
Restricted stock award grant	193		2		(2)		—		—		—
Forfeited restricted stock	(4)		—		390		—		(390)		—
Net share settlement related to vested equity awards	—		—		407		—		(412)		(5)
Net income	—		—		—		3,597		—		3,597
Balance at March 31, 2021	12,227	$	122	$	61,655	$	82,112	$	(55,428)	$	88,461
Issuance of treasury stock	—		—		—		—		—		—
Stock-based compensation	—		—		577		—		—		577
Restricted stock award grant	26		1		—		—		—		1
Net share settlement related to vested equity awards	—		—		36		—		(40)		(4)
Net income	—		—		—		4,193		—		4,193
Balance at June 30, 2021	12,253	$	123	$	62,268	$	86,305	$	(55,468)	$	93,228

See accompanying notes to condensed consolidated financial statements.

4

USA TRUCK INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended June 30,
	2022		2021
Operating activities:	(in thousands)
Net income	$	16,310	$	7,790
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		17,010		18,733
Bad debt benefit		(191)		(102)
Deferred income tax benefit, net		135		(1,979)
Stock-based compensation		1,759		745
Gain on disposal of assets, net		(7,282)		(317)
Other		214		71
Changes in operating assets and liabilities:
Accounts and other receivables		(16,180)		(18,174)
Inventories and prepaid expenses		3,383		1,852
Accounts payable and accrued expenses		8,601		6,213
Insurance and claims accruals		2,359		357
Other long-term assets and liabilities		(2,245)		503
Net cash provided by operating activities	$	23,873	$	15,692
Investing activities:
Capital expenditures		(9,011)		(1,066)
Proceeds from sale of property and equipment		12,843		6,141
Net cash provided by investing activities	$	3,832	$	5,075
Financing activities:
Borrowings under long-term debt		6,000		28,760
Payments on long-term debt		(52,201)		(39,156)
Principal payments on financing lease obligations		(12,290)		(5,888)
Proceeds from obligation under finance lease		41,974		—
Payment of debt issuance costs		(774)		—
Net change in bank drafts payable		41		(2,785)
Net payments for tax withholdings for vested stock-based awards		(1,108)		(9)
Net cash used in financing activities	$	(18,358)	$	(19,078)
Increase in cash and restricted cash		9,347		1,689
Cash and restricted cash:
Beginning of period		1,352		325
End of period	$	10,699	$	2,014
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	2,710	$	2,106
Income taxes, net of refunds		7,516		6,623
Supplemental disclosure of non-cash investing:
Purchase of revenue equipment included in accounts payable	$	6,059	$	1,021

See accompanying notes to condensed consolidated financial statements.

5

USA TRUCK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

June 30, 2022

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 June 30, 2022, and December 31, 2021, and our results of operations and comprehensive income for the three and six months ended June 30, 2022 and 2021.

These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) 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, 2021.

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, 2022.

The accompanying condensed consolidated financial statements include USA Truck Inc., and its wholly owned subsidiaries: International Freight Services, Inc. (“IFS”), a Delaware corporation; USA Truck, LLC, a Delaware limited liability company; USA Truck Fleetco, LLC, a Delaware limited liability company; USA Truck Logistics, LLC, a Delaware limited liability company; Skyraider Risk Retention Group Inc. (“SRRG”), a South Carolina 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.  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 2022, the Company increased the salvage value of its tractor fleet 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, 2022, this change in estimate resulted in a decrease in depreciation and amortization expense of approximately $1.0 million and $2.0 million, respectively.

Risks and Uncertainties

We continue to monitor the progression of the COVID-19 pandemic, including the outbreak of new strains of the virus, further government responses, including vaccine, testing, and mask mandates, and development of treatments and vaccines and the resulting potential effect on our financial position, results of operations, cash flows and liquidity.  Should the efforts to recover from the pandemic deteriorate or stall, the impact on our operations could have a material adverse effect on our financial condition, results of operations, cash flows and liquidity.

6

Accounting standards issued but not yet adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 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.  ASU 2016-13 is effective for smaller reporting companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.  We continue to evaluate the effect of adopting ASU 2016-13, but believe the effects will not be significant and will be limited to the valuation of the Company’s trade receivables.  The Company expects to adopt ASU 2016-13 using the modified retrospective approach.

NOTE 2 – REVENUE RECOGNITION

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

	Three Months Ended June 30,
	2022								2021
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	95,653	$	72,216	$	(6,346)	$	161,523	$	90,712	$	72,204	$	(13,545)	$	149,371
Fuel surcharge		23,535		12,665		(310)		35,890		12,038		5,569		(534)		17,073
Accessorial		3,327		1,390		—		4,717		2,611		976		—		3,587
Total	$	122,515	$	86,271	$	(6,656)	$	202,130	$	105,361	$	78,749	$	(14,079)	$	170,031

	Six Months Ended June 30,
	2022								2021
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	193,225	$	160,150	$	(18,792)	$	334,583	$	181,727	$	134,666	$	(26,149)	$	290,244
Fuel surcharge		39,759		21,105		(316)		60,548		22,358		9,866		(909)		31,315
Accessorial		5,602		2,460		—		8,062		4,379		2,598		—		6,977
Total	$	238,586	$	183,715	$	(19,108)	$	403,193	$	208,464	$	147,130	$	(27,058)	$	328,536

At June 30, 2022 and December 31, 2021, the Company had contract assets, representing our right to consideration for transportation services not yet billed, of $2.1 million and $1.6 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 expenses, operating ratios and operating income, as well as on key operating statistics, to make operating decisions.

Trucking.  Trucking is comprised of truckload and dedicated freight service offerings.  Truckload service offerings provide motor carrier services as a common and contract carrier, utilizing equipment owned or leased by the Company or independent contractors.  Dedicated freight service offerings provide 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.  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

7

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,
	2022		2021		2022		2021
Operating revenue (1)	(in thousands)
Trucking revenue	$	122,515	$	105,361	$	238,586	$	208,464
Trucking intersegment eliminations		(111)		(259)		(153)		(586)
Trucking operating revenue		122,404		105,102		238,433		207,878
USAT Logistics revenue		86,271		78,749		183,715		147,130
USAT Logistics intersegment eliminations		(6,545)		(13,820)		(18,955)		(26,472)
USAT Logistics operating revenue		79,726		64,929		164,760		120,658
Total operating revenue	$	202,130	$	170,031	$	403,193	$	328,536

1) Includes foreign revenue of $14.6 million and $10.0 million for the three months ended June 30, 2022 and 2021, respectively, and $27.0 million and $18.9 million for the six months ended June 30, 2022, and 2021, respectively.

A summary of operating income by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Operating income	(in thousands)
Trucking	$	4,296	$	3,057	$	16,925	$	6,577
USAT Logistics		3,688		3,872		9,742		6,398
Unallocated merger costs		(2,132)		—		(2,132)		—
Total operating income	$	5,852	$	6,929	$	24,535	$	12,975

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Depreciation and amortization	(in thousands)
Trucking	$	8,576	$	8,901	$	16,296	$	18,197
USAT Logistics		410		262		714		536
Total depreciation and amortization	$	8,986	$	9,163	$	17,010	$	18,733

NOTE 4 – EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

The Company adopted the 2014 Omnibus Incentive Plan (the “Incentive Plan”) in May 2014, which provided for the granting of up to 500,000 shares of common stock through equity-based awards to directors, officers and other key employees.  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.  The Third Amendment to the Incentive Plan was adopted in May 2022, which, among other things, increased the number of shares of common stock available for issuance under the Incentive Plan by an additional 250,000 shares.  As of June 30, 2022, 416,302 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, 2022		December 31, 2021
	(in thousands)
Salaries, wages and employee benefits	$	8,888	$	7,318
Federal and state tax accruals		1,863		685
Other		3,639		2,003
Total accrued expenses	$	14,390	$	10,006

NOTE 6 – DEBT

Long-term debt consisted of the following:

	June 30, 2022		December 31, 2021
	(in thousands)
Revolving credit agreement	$	—	$	38,000
Sale-leaseback finance obligations		28,906		32,739
Term loans		39,473		—
Insurance premium financing		1,762		3,601
Other		56		84
		70,197		74,424
Less current maturities		(16,956)		(11,069)
Total long-term debt	$	53,241	$	63,355

New credit facility

On January 31, 2022, the Company entered into a new senior secured revolving credit facility (the “Credit Facility”) with a group of lenders and BMO Harris Bank, N.A., as agent (“Agent”).  Contemporaneously with the funding of the Credit Facility, the Company paid off the obligations under its prior credit facility and terminated such facility.

The Credit Facility is structured as a $130.0 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 $60 million, exercisable in increments of $20 million.  The Credit Facility is a five-year facility scheduled to terminate on January 31, 2027.  Borrowings under the Credit Facility are classified as either secured overnight financing rate (“SOFR”) loans or “Base Rate Loans”.  SOFR Loans accrue interest at SOFR plus an applicable margin that adjusts quarterly to between 1.25% and 1.75% based on the Company’s consolidated fixed charge coverage ratio.  Base Rate Loans accrue interest at a base rate equal to the Agent’s prime rate plus an applicable margin that adjusts quarterly to between 0.25% and 0.75% based on the Company’s consolidated fixed charge coverage ratio.  The Credit Facility includes, within its $130.0 million revolving credit facility, a letter of credit sub-facility in an aggregate amount of $15.0 million and a swing line sub-facility 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 certain of the Company’s assets, with the notable exclusions of any real estate or revenue equipment financed outside the Credit Facility. 

Borrowings under the Credit Facility are subject to a borrowing base limited to (A) the sum of (i) 85.0% of eligible accounts receivable, plus (ii) 90.0% of eligible investment grade accounts receivable (reduced to 85.0% in certain situations), plus (iii) the lesser of (a) 85.0% of eligible unbilled accounts receivable and (b) $17.5 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.  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 springing financial covenant, which requires a consolidated fixed charge coverage ratio of at least 1.0 to 1.0.  The financial covenant springs only in the event excess availability under the Credit Facility drops below (i) 10.0% of the lenders’ total commitments under the Credit Facility and (ii) $13.0 million.  As of June 30, 2022, availability under the Credit Facility was $130.0 million.  Availability in future periods will be reduced as the $7.9 million in existing letters of credit are transitioned to collateralization by the

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Credit Facility.   In July 2022, approximately $6.7 million of the collateralized cash was unrestricted and made available to the Company.  

The Credit Facility includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts outstanding under the Credit Facility may be accelerated, and the lenders’ commitments may be terminated.  The Credit Facility contains certain restrictions and covenants relating to, among other things, dividends, liens, acquisitions and dispositions, affiliate transactions, and other indebtedness.

Previous credit facility

The previous credit facility was a $170.0 million revolving credit facility, with a $75.0 million accordion feature exercisable in increments of at least $20.0 million.  The previous credit facility was a five-year facility scheduled to terminate on January 31, 2024.  Borrowings under the previous credit facility were classified as either “base rate loans” or “LIBOR loans”, and included a letter of credit sub-facility in aggregate of $15.0 million and a swingline sub-facility in aggregate of $25.0 million.  An unused line fee of 0.25% was 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 previous credit facility.  The previous credit facility was secured by a pledge of substantially all of the Company’s assets, except for any real estate or revenue equipment financed outside the previous credit facility.

The previous credit facility contained a single financial covenant that was triggered in the event excess availability fell below 10.0% of the lenders’ total commitments, and 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 were triggered in the event excess availability fell below 20.0% of the lenders’ total commitments.  Additionally, the Company recognized charges in the first quarter of 2022 of $0.3 million associated with the write-off of unamortized debt issuance costs associated with the previous credit facility to the interest expense line item.  

Restricted cash

The Company has $7.9 million in letters of credit that were supported by the previous credit facility.  Upon termination of the previous credit facility, the Company was required to cash collateralize the letters of credit at 105% of the outstanding amounts, or $8.3 million.  In future periods, as the letters of credit are transitioned to the Credit Facility, the funds will be transferred to an unrestricted account and the restrictions will lapse.  In July 2022, approximately $6.7 million of the collateralized cash was unrestricted and made available to the Company.  

Term loans

In January 2022, the Company entered into a series of term loans totaling approximately $42.0 million.  These term loans are secured by operating equipment with varying degrees of remaining lives, with loan durations corresponding to the remaining useful lives and ranging from 36 to 96 months.  The average interest rate on the loans was 3.2%. The proceeds from these loans were used to pay off the balance of our previous credit facility.  Under these agreements, the Company will make monthly payments of approximately $0.7 million for the first 36 months.  After that time, the monthly obligation will reduce as each term loan is repaid.

Sale-leaseback transactions

In December 2021, the Company entered into a sale-leaseback transaction whereby it sold trailers for approximately $24.5 million and concurrently entered into a finance lease agreement for the sold trailers with a 48 month term.  Under the lease agreement, the Company will make monthly payments of approximately $0.5 million, and at the end of the lease, has the option to purchase the trailers for nominal consideration.  This transaction does not qualify for sale-leaseback accounting due to the bargain purchase option and is therefore treated as a financing obligation.

Insurance premium financing

In October 2021, the Company entered into a short-term agreement to finance approximately $5.5 million with a third-party financing company for a portion of the Company’s annual insurance premiums.

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NOTE 7 – LEASES AND OTHER COMMITMENTS

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(in thousands)
Operating lease costs	$	2,224	$	1,908	$	4,254	$	3,842
Finance lease costs:
Amortization of assets		4,134		2,782		7,277		6,796
Interest on lease liabilities		910		639		1,543		1,309
Total finance lease costs		5,044		3,421		8,820		8,105
Variable and short-term lease costs		413		703		911		1,286
Total lease costs	$	7,681	$	6,032	$	13,985	$	13,233

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

	June 30, 2022			December 31, 2021
Operating leases:	(dollars in thousands)
Operating leases - right-of-use assets	$	25,450		$	22,898
Current operating lease obligations		7,221			6,679
Long-term operating lease obligations		18,665			16,644
Total operating lease liabilities	$	25,886		$	23,323
Finance leases and assets subject to sale leasebacks:
Property and equipment, at cost		156,379			137,736
Accumulated amortization		(51,436)			(47,699)
Property and equipment, net	$	104,943		$	90,037
Finance lease obligations:
Current finance lease obligations		16,834			14,095
Long-term finance lease obligations		69,688			56,274
	$	86,522		$	70,369
Weighted average remaining lease term:		(in months)			(in months)
Operating leases		51			50
Finance leases		37			35
Weighted average discount rate:
Operating leases		4.14	%		4.53	%
Finance leases		3.30	%		3.69	%

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

	June 30, 2022		June 30, 2021
Cash paid for amounts included in measurement of liabilities:	(in thousands)
Operating cash flows from operating leases	$	214	$	71
Operating cash flows from finance leases		910		1,309
Financing cash flows from finance leases		12,290		5,888
Assets obtained in exchange for lease liabilities:
Operating leases	$	5,842	$	170
Finance leases		28,102		—

OTHER COMMITMENTS

As of June 30, 2022, the Company had $53.7 million in purchase commitments for the acquisition of revenue equipment, of which $13.3 million was cancellable.  It is anticipated that these purchase commitments may be funded  through cash provided by operations, borrowings under the Company’s Credit Facility, proceeds from the sale of used revenue equipment or the use of finance and operating leases.    

NOTE 8 – INCOME TAXES

During the three months ended June 30, 2022 and 2021 the Company’s effective tax rate was 24.3% and 28.5%, respectively.  During the six months ended June 30, 2022, and 2021 the Company’s effective tax rate was 23.9% and 28.0%, respectively.  The effective rate varied from the statutory federal tax rate primarily due to state income taxes and certain non-deductible expenses.  The fiscal 2022 tax rate was affected by vesting of equity-based compensation at a higher stock price than the price at which it was granted, which resulted in a decrease to tax expense.  Additionally, in fiscal 2022, the Company benefited from The Consolidated Appropriations Act of 2021 that increased the deduction for the cost of food or beverage provided by a restaurant to be 100% deductible in 2021 and 2022.  The three and six month periods ended June 30, 2021, however, did not benefit from The Consolidated Appropriations Act of 2021 because the legislation was not passed until December 2021.  

NOTE 9 – EARNINGS PER SHARE

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Numerator:	(in thousands, except per share amounts)
Net income	$	3,199	$	4,193	$	16,310	$	7,790
Denominator:
Denominator for basic earnings per share – weighted average shares		8,876		8,806		8,904		8,826
Effect of dilutive securities:
Employee restricted stock and incentive stock options		111		141		158		150
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion		8,987		8,947		9,062		8,976
Basic earnings per share	$	0.36	$	0.48	$	1.83	$	0.88
Diluted earnings per share	$	0.36	$	0.47	$	1.80	$	0.87
Weighted average anti-dilutive employee restricted stock and incentive stock options		301		114		238		126

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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, results of operations or cash flows in any given reporting period.

NOTE 11 – PROPOSED MERGER

On June 23, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Schenker, Inc., a New York corporation (“Schenker”) and Tango Merger, Inc., a Delaware corporation and a wholly owned subsidiary of Schenker (“Merger Sub”).  The Merger Agreement provides that Merger Sub will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Schenker (the “Merger”).  Schenker and Merger Sub are affiliates of DB Schenker, one of the world's leading logistics service providers.

At the effective time of the Merger and as a result of the Merger:

● Each share of the Company’s common stock, par value $0.01 per share (the “Company common stock”), that is issued and outstanding immediately prior to the effective time of the Merger, other than shares to be cancelled pursuant to the Merger Agreement or shares of Company common stock held by holders who have made a valid demand for appraisal in accordance with Section 262 of the Delaware General Corporation Law, will be converted into the right to receive $31.72 in cash, without interest (the “Merger Consideration”), subject to any applicable withholding taxes;

● Each outstanding and unexercised option to purchase shares of Company common stock (whether vested or unvested and whether exercisable or unexercisable) (a “Company stock option”) will become fully vested and be cancelled in exchange for the right to receive a cash payment, without interest and subject to applicable tax withholding, of an amount equal to the product of (i) the total number of shares of Company common stock underlying each such Company stock option and (ii) the excess of the Merger Consideration over the exercise price per share of each such Company stock option;

● Each outstanding share of restricted stock of the Company (whether vested or unvested) (“restricted stock”), will become fully vested and be cancelled in exchange for the right to receive a cash payment, without interest and subject to applicable tax withholding, of an amount equal to the product of (i) the total number of shares of Company common stock underlying each such award of restricted stock and (ii) the Merger Consideration; and

● Each outstanding performance stock unit with respect to shares of Company common stock (whether vested or unvested) (a “PSU”), will become fully vested and be cancelled in exchange for the right to receive a cash payment, without interest and subject to applicable tax withholding, of an amount equal to the product of (i) the total number of shares of Company common stock underlying each such PSU and (ii) the Merger Consideration.

The closing of the Merger is subject to various conditions, including (i) the adoption of the Merger Agreement by holders of two-thirds of the issued and outstanding shares of Company common stock entitled to vote thereon at the stockholder meeting (the “Company Stockholder Approval”); (ii) the absence of any outstanding law, regulation, or order enacted, promulgated, issued, entered, amended or enforced by any governmental entity that restrains, enjoins or otherwise prohibits the consummation of the Merger; (iii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (the “HSR Act”); (iv) the CFIUS (the “Committee  on Foreign Investment in the United States”) Approval (as defined in the Merger Agreement); and (v) the accuracy of the representations and warranties contained in the Merger Agreement, subject to customary materiality qualifications, as of the date of the Merger Agreement and as of the date of the closing of the Merger, and compliance in all material respects with the covenants and agreements contained in the Merger Agreement.  In addition, the obligation of Schenker and Merger Sub to consummate the Merger is subject to the absence, since the date of the Merger Agreement, of a Company Material Adverse Effect (as defined in the Merger Agreement).  The closing of the Merger is not subject to a financing condition.  Under the terms of the Merger Agreement, consummation of the Merger will occur on the third business day following the satisfaction or waiver of the conditions to closing of the Merger.

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Assuming the satisfaction of the conditions set forth in the Merger Agreement, including Company Stockholder Approval, the Company expects the Merger to close by the end of 2022.  Until the closing, the Company will continue to operate as an independent company.

The Merger Agreement provides that, in certain circumstances, including the termination of the Merger Agreement by the Company to accept a Superior Proposal (as defined in the Merger Agreement), the termination of the Merger Agreement by Schenker following a change in recommendation by the Board, and other customary circumstances, the Company would be required to pay Schenker a termination fee of $10,000,000.

In the second quarter of 2022, the Company incurred approximately $2.1 million of Merger related costs that are recorded in the line item ‘Merger costs’ in the condensed consolidated statement of income and comprehensive income.  These costs related primarily to legal costs incurred on behalf of the Company, executives, and the Board and the costs related to the fairness opinion, from a financial point of view, of the merger consideration.

NOTE 12 –ASSET HELD FOR SALE

On June 20, 2022, the Company entered into an agreement to sell excess property consisting of approximately 25.5 acres of land and the related facility located in Van Buren, Arkansas, with a net book value of $1.2 million for approximately $3.2 million.  The agreement contains customary terms and conditions, including a due diligence inspection period, and is expected to close prior to end of the year.

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 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;

● 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; and

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

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

● the Merger and Merger Agreement,

● the impact of public health crises, including COVID-19,

● future driver market,

● future strategy and strategic initiatives,

● future ability to grow market share,

● future driver and customer-facing employee compensation,

● future ability and cost to recruit and retain drivers,

● 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,

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● future safety performance,

● future profitability,

● future industry capacity,

● future deployment of technology,

● future pricing rates and freight network,

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

● future insurance and claims expense, including trends in cost, coverage and retention levels, as well as the formation of additional captive insurance companies,

● future salaries, wages and employee benefits costs,

● future efforts to expand our use of independent contractors, 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 impact of regulations,

● future use of derivative financial instruments,

● the impact of inflation and supply chain shortages,

● 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,” “would,” “should,” “could,” “potential,” “continue,” “designed,” “likely,” “foresee,” “seek,” “target,” “forecast,” “intends,” “hopes,” “strategy,” “objective,” “mission,” “outlook,” “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 sections entitled “Item 1.A, Risk Factors” in this Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, and other filings with 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.

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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.

Proposed Merger

On June 23, 2022, the Company entered into the Merger Agreement with Schenker and Merger Sub.  The Merger Agreement provides that Merger Sub will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Schenker.  Schenker and Merger Sub are affiliates of DB Schenker, one of the world's leading logistics service providers.

At the effective time of the Merger and as a result of the Merger:

● Each share of the Company common stock that is issued and outstanding immediately prior to the effective time of the Merger, other than shares to be cancelled pursuant to the Merger Agreement or shares of Company common stock held by holders who have made a valid demand for appraisal in accordance with Section 262 of the Delaware General Corporation Law, will be converted into the right to receive $31.72 in cash, without interest (the “Merger Consideration”), subject to any applicable withholding taxes;

● Each outstanding and unexercised Company stock option will become fully vested and be cancelled in exchange for the right to receive a cash payment, without interest and subject to applicable tax withholding, of an amount equal to the product of (i) the total number of shares of Company common stock underlying each such Company stock option and (ii) the excess of the Merger Consideration over the exercise price per share of each such Company stock option;

● Each outstanding share of restricted stock will become fully vested and be cancelled in exchange for the right to receive a cash payment, without interest and subject to applicable tax withholding, of an amount equal to the product of (i) the total number of shares of Company common stock underlying each such award of restricted stock and (ii) the Merger Consideration; and

● Each outstanding PSU, will become fully vested and be cancelled in exchange for the right to receive a cash payment, without interest and subject to applicable tax withholding, of an amount equal to the product of (i) the total number of shares of Company common stock underlying each such PSU and (ii) the Merger Consideration.

The closing of the Merger is subject to various conditions, including (i) the Company Stockholder Approval; (ii) the absence of any outstanding law, regulation, or order enacted, promulgated, issued, entered, amended or enforced by any governmental entity that restrains, enjoins or otherwise prohibits the consummation of the Merger; (iii) the expiration or termination of any applicable waiting period under the HSR Act; (iv) the CFIUS (the “Committee  on Foreign Investment in the United States”) Approval (as defined in the Merger Agreement); and (v) the accuracy of the representations and warranties contained in the Merger Agreement, subject to customary materiality qualifications, as of the date of the Merger Agreement and as of the date of the closing of the Merger, and compliance in all material respects with the covenants and agreements contained in the Merger Agreement.  In addition, the obligation of Schenker and Merger Sub to consummate the Merger is subject to the absence, since the date of the Merger Agreement, of a Company Material Adverse Effect (as defined in the Merger Agreement).  The closing of the Merger is not subject to a financing condition.  Under the terms of

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the Merger Agreement, consummation of the Merger will occur on the third business day following the satisfaction or waiver of the conditions to closing of the Merger.

Assuming the satisfaction of the conditions set forth in the Merger Agreement, including Company Stockholder Approval, the Company expects the Merger to close by the end of 2022.  Until the closing, the Company will continue to operate as an independent company.

The Merger Agreement provides that, in certain circumstances, including the termination of the Merger Agreement by the Company to accept a Superior Proposal (as defined in the Merger Agreement), the termination of the Merger Agreement by Schenker following a change in recommendation by the Board, and other customary circumstances, the Company would be required to pay Schenker a termination fee of $10,000,000.

In the second quarter of 2022, the Company incurred approximately $2.1 million of Merger related costs that are recorded in the line item ‘Merger costs’ in the condensed consolidated statement of income and comprehensive income.  These costs related primarily to legal costs incurred on behalf of the Company, executives, and the Board and the costs related to the fairness opinion, from a financial point of view, of the merger consideration.

Business Overview

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.

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 segment provides services that 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 segment.  

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 accident claims expense.  These expenses vary primarily based upon 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

17

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, (vii) operating ratio, and (viii) adjusted operating ratio.  In general, the Company’s average miles per available tractor per week, rate per mile and deadhead percentages are affected by industry-wide freight volumes and industry-wide trucking capacity, 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.

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.

COVID-19

The COVID-19 outbreak, and its variants, have resulted in government authorities in the United States and around the world implementing numerous measures to try to reduce its spread, such as travel bans and restrictions, social distancing, quarantines, shelter in place or total lock-down orders, business limitations and shutdowns, and vaccine, testing, and mask mandates.  While many of these measures have been relaxed or rolled back, we continue to monitor the situation and implement new measures as deemed appropriate.

The overall impact of COVID-19 on our consolidated results of operations for the three and six months ended June 30, 2022 was not significant, however the impact of COVID-19 on our consolidated results of operations in future periods remains uncertain.  Based on the duration 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.

18

Results of Operations

The following tables summarize the condensed consolidated statements of income and comprehensive 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,
	2022						2021
						Adjusted					Adjusted	Change
				Operating		Operating			Operating		Operating	in Dollar
				Revenue		Ratio (1)			Revenue		Ratio (1)	Amounts
	$			%		%	$		%		%	%
	(dollars in thousands)
Base revenue (1)	$	166,240		82.2	%		$	152,958	90.0	%		8.7	%
Fuel surcharge revenue		35,890		17.8				17,073	10.0			110.2
Operating revenue		202,130		100.0				170,031	100.0			18.9
Total operating expenses		196,278	(2)	97.1		95.0		163,102	95.9		95.3	20.3
Operating income		5,852		2.9				6,929	4.1			(15.5)
Other expenses:
Interest expense		1,542		0.8				1,014	0.6			52.1
Other, net		84		0.0				49	0.0			71.4
Total other expenses, net		1,626		0.8				1,063	0.6			53.0
Income before income taxes		4,226		2.1				5,866	3.4			(28.0)
Income tax expense		1,027		0.5				1,673	1.0			(38.6)
Consolidated net income	$	3,199		1.6	%		$	4,193	2.5	%		(23.7)	%

	Six Months Ended June 30,
	2022						2021
						Adjusted					Adjusted	Change
				Operating		Operating			Operating		Operating	in Dollar
				Revenue		Ratio (1)			Revenue		Ratio (1)	Amounts
	$			%		%	$		%		%	%
	(dollars in thousands)
Base revenue (1)	$	342,645		85.0	%		$	297,221	90.5	%		15.3	%
Fuel surcharge revenue		60,548		15.0				31,315	9.5			93.4
Operating revenue		403,193		100.0				328,536	100.0			22.7
Total operating expenses		378,658	(2)	93.9		92.0		315,561	96.1		95.4	20.0
Operating income		24,535		6.1				12,975	3.9			89.1
Other expenses:
Interest expense		2,959		0.7				2,039	0.6			45.1
Other, net		152		0.0				110	0.0			38.2
Total other expenses, net		3,111		0.8				2,149	0.7			44.8
Income before income taxes		21,424		5.3				10,826	3.3			97.9
Income tax expense		5,114		1.3				3,036	0.9			68.4
Consolidated net income	$	16,310		4.0	%		$	7,790	2.4	%		109.4	%

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

2) Includes approximately $2.1 million in merger related costs as of June 30, 2022.  See Note 11 to the condensed consolidated financial statements for further discussion of the merger.  

19

Use of Non-GAAP Financial Information

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

Base revenue is calculated as operating revenue less fuel surcharge revenue and intercompany eliminations.  Adjusted operating ratio is calculated as operating expenses excluding amortization of acquisition related intangibles and merger costs, net of fuel surcharge revenue, as a percentage of operating revenue excluding fuel surcharge revenue.  Adjusted operating income is calculated by deducting operating expenses excluding amortization of acquisition related intangibles and merger costs, net of fuel surcharge revenue, from operating revenue, net of fuel surcharge revenue. Adjusted net income is defined as net income excluding amortization of acquisition related intangibles and merger costs plus or minus the income tax effect of such adjustments using a statutory tax rate.  Adjusted earnings per diluted share is defined as adjusted net income divided by the weighted average number of diluted shares outstanding during the period.  The per-share impact of each adjustment is determined by dividing it by the weighted average diluted shares outstanding.

The Company’s chief operating decision-maker focuses on base revenue, adjusted operating ratio, adjusted operating income, adjusted net income, and adjusted earnings per diluted share 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 relevant basis for comparing results of operations.  Management believes its presentation of these measures 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.

Base revenue, adjusted operating ratio, adjusted operating income, adjusted net income, and adjusted earnings per diluted share are not substitutes for operating revenue, operating ratio, operating income, net income, earnings per diluted share, or any other measure derived solely from GAAP measures.  There are limitations to using non-GAAP measures.  Although management believes that base revenue, adjusted operating ratio, adjusted operating income, adjusted net income, and adjusted earnings per diluted share can make an evaluation of the Company’s operating performance more relevant 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 base revenue, adjusted operating ratio, adjusted operating income, adjusted net income, and adjusted earnings per diluted share differently.  As a result, it may be difficult to use base revenue, adjusted operating ratio, adjusted operating income, adjusted net income, adjusted earnings per diluted share, or similarly named non-GAAP measures that other companies may use, to compare the performance of those companies to USA Truck’s performance.

20

Consolidated Reconciliations

Pursuant to the requirements of Regulation S-K, Item 10(e) and Regulation G, reconciliations of non-GAAP financial measures to GAAP financial measures have been provided in the tables below for base revenue, adjusted operating ratio, adjusted operating income, adjusted net income, and adjusted earnings per diluted share:

Base Revenue, Adjusted Operating Ratio, Adjusted Operating Income, Adjusted Net Income, and Adjusted Earnings per Diluted Share

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
	(in thousands)
Operating revenue	$	202,130		$	170,031		$	403,193		$	328,536
Less: Fuel surcharge revenue		(35,890)			(17,073)			(60,548)			(31,315)
Base revenue	$	166,240		$	152,958		$	342,645		$	297,221
Operating expense	$	196,278		$	163,102		$	378,658		$	315,561
Adjusted for:
Merger costs		(2,132)			—			(2,132)			—
Amortization of acquisition related intangibles		(323)			(323)			(645)			(645)
Fuel surcharge revenue		(35,890)			(17,073)			(60,548)			(31,315)
Adjusted operating expense	$	157,933		$	145,706		$	315,333		$	283,601
Operating income	$	5,852		$	6,929		$	24,535		$	12,975
Adjusted operating income	$	8,307		$	7,252		$	27,312		$	13,620
Operating ratio		97.1	%		95.9	%		93.9	%		96.1
Adjusted operating ratio		95.0	%		95.3	%		92.0	%		95.4

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(in thousands)
Net income	$	3,199	$	4,193	$	16,310	$	7,790
Adjusted for:
Merger costs		2,132		—		2,132		—
Amortization of acquisition related intangibles		323		323		645		645
Income tax effect of adjustments		(626)		(82)		(708)		(164)
Adjusted net income	$	5,028	$	4,434	$	18,379	$	8,271

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Earnings per diluted share	$	0.36	$	0.47	$	1.80		0.87
Adjusted for:
Merger costs		0.24		—		0.24		—
Amortization of acquisition related intangibles		0.04		0.04		0.07		0.07
Income tax effect of adjustments		(0.07)		(0.01)		(0.08)		(0.02)
Adjusted earnings per diluted share	$	0.57	$	0.50	$	2.03	$	0.92

21

Segment Reconciliations

	Three Months Ended						Six Months Ended
Trucking Segment (1)	June 30,						June 30,
	2022			2021			2022			2021
	(in thousands)
Operating revenue	$	122,404		$	105,102		$	238,433		$	207,878
Intersegment activity		111			259			153			586
Operating revenue (before intersegment eliminations)		122,515			105,361			238,586			208,464
Less: fuel surcharge revenue (before intersegment eliminations)		(23,535)			(12,038)			(39,759)			(22,358)
Base revenue	$	98,980		$	93,323		$	198,827		$	186,106
Operating expense (before intersegment eliminations)	$	118,219		$	102,304		$	221,661		$	201,887
Adjusted for:
Amortization of acquisition related intangibles		(323)			(323)			(645)			(645)
Fuel surcharge revenue		(23,535)			(12,038)			(39,759)			(22,358)
Adjusted operating expense	$	94,361		$	89,943		$	181,257		$	178,884
Operating income	$	4,296		$	3,057		$	16,925		$	6,577
Adjusted operating income	$	4,619		$	3,380		$	17,570		$	7,222
Operating ratio		96.5	%		97.1	%		92.9	%		96.8	%
Adjusted operating ratio		95.3	%		96.4	%		91.2	%		96.1	%

	Three Months Ended						Six Months Ended
USAT Logistics Segment (1)	June 30,						June 30,
	2022			2021			2022			2021
	(in thousands)
Operating revenue	$	79,726		$	64,929		$	164,760		$	120,658
Intersegment activity		6,545			13,820			18,955			26,472
Operating revenue (before intersegment eliminations)		86,271			78,749			183,715			147,130
Less: fuel surcharge revenue (before intersegment eliminations)		(12,665)			(5,569)			(21,105)			(9,866)
Base revenue	$	73,606		$	73,180		$	162,610		$	137,264
Operating expense (before intersegment eliminations)	$	82,583		$	74,877		$	173,973		$	140,732
Adjusted for:
Fuel surcharge revenue		(12,665)			(5,569)			(21,105)			(9,866)
Adjusted operating expense	$	69,918		$	69,308		$	152,868		$	130,866
Operating income	$	3,688		$	3,872		$	9,742		$	6,398
Adjusted operating income	$	3,688		$	3,872		$	9,742		$	6,398
Operating ratio		95.7	%		95.1	%		94.7	%		95.7	%
Adjusted operating ratio		95.0	%		94.7	%		94.0	%		95.3	%

1) Merger costs of approximately $2.1 million for the three and six months ended June 30, 2022, have not been allocated to the reportable segments.  See Note 11 to the condensed consolidated financial statements for further discussion of the merger.

22

Key Operating Statistics by Segment

	Three Months Ended						Six Months Ended
	June 30,						June 30,
Trucking:	2022			2021			2022			2021
Operating revenue (before intersegment eliminations) (in thousands)	$	122,515		$	105,361		$	238,586		$	208,464
Operating income (1) (in thousands)	$	4,296		$	3,057		$	16,925		$	6,577
Adjusted operating income (2) (in thousands)	$	4,619		$	3,380		$	17,570		$	7,222
Operating ratio (3)		96.5	%		97.1	%		92.9	%		96.8	%
Adjusted operating ratio (4)		95.3	%		96.4	%		91.2	%		96.1	%
Total miles (5) (in thousands)		38,434			42,700			76,921			84,848
Deadhead percentage (6)		11.8	%		11.2	%		11.3	%		11.4	%
Base revenue per loaded mile	$	2.920		$	2.461		$	2.914		$	2.475
Average number of seated tractors		1,693			1,787			1,707			1,784
Average number of available tractors (7)		1,795			1,922			1,810			1,907
Average number of in-service tractors (8)		1,819			1,949			1,841			1,936
Loaded miles per available tractor per week		1,452			1,518			1,458			1,525
Base revenue per available tractor per week	$	4,242		$	3,735		$	4,248		$	3,774
Average loaded miles per trip		486			509			491			515
USAT Logistics:
Operating revenue (before intersegment eliminations) (in thousands)	$	86,271		$	78,749		$	183,715		$	147,130
Operating income (1) (in thousands)	$	3,688		$	3,872		$	9,742		$	6,398
Adjusted operating income (2) (in thousands)	$	3,688		$	3,872		$	9,742		$	6,398
Gross margin (9) (in thousands)	$	11,091		$	9,733		$	24,350		$	17,958
Gross margin percentage (10)		12.9	%		12.4	%		13.3	%		12.2	%
Load count (in thousands)		42.1			37.1			83.3			70.2

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

2) Adjusted operating income is calculated by deducting operating expenses (before intersegment eliminations) excluding amortization of acquisition related intangibles and merger costs, 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 amortization of acquisition related intangibles and merger costs, 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).

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

23

Results of Operations—Segment Review

Trucking operating revenue

During the three months ended June 30, 2022, Trucking operating revenue (before intersegment eliminations) increased 16.3% to $122.5 million, compared to $105.4 million for the same period in 2021.  Trucking base revenue (before intersegment eliminations) increased 6.1% to $99.0 million compared to $93.3 million for the second quarter of 2021.  The increase in operating revenue (before intersegment eliminations) resulted primarily from a 18.7% increase in base revenue per loaded mile offset by a 4.3% decrease in loaded miles per available tractor per week.  

During the six months ended June 30, 2022, Trucking operating revenue (before intersegment eliminations) increased 14.4% to $238.6 million, compared to $208.5 million for the same period in 2021.  Trucking base revenue (before intersegment eliminations) increased 6.8% to $198.8 million compared to $186.1 million for the second quarter of 2021.  The increase in operating revenue (before intersegment eliminations) resulted primarily from a 17.7% increase in base revenue per loaded mile offset by a 4.4% decrease in loaded miles per available tractor per week.  

Trucking operating income

For the three months ended June 30, 2022, Trucking reported operating income of $4.3 million compared to operating income of $3.1 million for the same period in 2021.  This was primarily driven by 16.3% increase in operating revenue (before intersegment eliminations) discussed above, partially offset by a 15.6% increase in operating expenses (primarily increased fuel and compensation expense).

For the six months ended June 30, 2022, Trucking reported an operating income of $16.9 million compared to operating income of $6.6 million for the same period in 2021.  This change was largely driven by the 14.4% increase in operating revenue (before intersegment eliminations) discussed above and a $7.0 million increase in the gain on sale of used equipment, partially offset by a 9.8% increase in operating expenses.  

USAT Logistics operating revenue

For the three months ended June 30, 2022, USAT Logistics operating revenue (before intersegment eliminations) increased 9.6% to $86.3 million compared to $78.7 million for the same period in 2021.  The year-over-year increase in operating revenue (before intersegment eliminations) was the result of a 13.5% increase in load volume paired with a 3.4% increase in revenue per load.

For the six months ended June 30, 2022, USAT Logistics operating revenue (before intersegment eliminations) increased 24.9% to $183.7 million compared to $147.1 million for the same period in 2021.  The year-over-year change in operating revenue (before intersegment eliminations) was the result of an 18.8% increase in load volume paired with a 5.1% increase in revenue per load.

USAT Logistics operating income

USAT Logistics reported operating income of $3.7 million for the three months ended June 30, 2022, a decrease of $0.2 million, compared to operating income of $3.9 million for the comparable quarter in 2021.  This change was driven by a 10.3% increase in operating expenses, largely offset by a 9.6% increase in operating revenue (before intersegment eliminations) and a 50-basis point improvement in gross margin.

For the six months ended June 30, 2022, USAT Logistics reported operating income of $9.7 million, an increase of $3.3 million, compared to operating income of $6.4 million for the comparable period in 2021.  This increase was driven by a 24.9% increase in operating revenue (before intersegment eliminations) and a 110-basis point improvement in gross margin, partially offset by a 23.6% increase in operating expenses.

24

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,
	2022						2021
					Adjusted						Base		% change
					Operating								2022 to
	Operating Revenue				Ratio (1)		Operating Revenue				Revenue (1)		2021
	$		%		%		$		%		%		%
Operating Expenses:	(dollars in thousands)
Salaries, wages and employee benefits	$	42,238	20.9	%	25.4	%	$	36,488	21.4	%	23.9	%	15.8	%
Fuel and fuel taxes		22,638	11.2		(8.0)	(2)		12,414	7.3		(3.0)	(2)	82.4
Depreciation and amortization		8,986	4.4		5.2	(1)		9,163	5.4		5.8	(1)	(1.9)
Insurance and claims		7,046	3.5		4.2			5,181	3.0		3.4		36.0
Equipment rent		1,526	0.8		0.9			2,048	1.2		1.3		(25.5)
Operations and maintenance		9,925	4.9		6.0			8,783	5.2		5.7		13.0
Purchased transportation		95,692	47.3		57.6			82,938	48.8		54.2		15.4
Operating taxes and licenses		1,273	0.6		0.8			1,323	0.8		0.9		(3.8)
Communications and utilities		735	0.4		0.4			796	0.5		0.5		(7.7)
Gain on disposal of assets, net		(881)	(0.4)		(0.5)			(140)	(0.1)		(0.1)		—
Merger costs		2,132	1.1		0.0	(1)		—	—		0.0		—
Other		4,968	2.4		3.0			4,108	2.4		2.7		20.9
Total operating expenses	$	196,278	97.1	%	95.0	%	$	163,102	95.9	%	95.3	%	20.3	%

	Six Months Ended June 30,
	2022						2021
					Adjusted						Base		% change
					Operating								2021 to
	Operating Revenue				Ratio (1)		Operating Revenue				Revenue (1)		2020
	$		%		%		$		%		%		%
Operating Expenses:	(dollars in thousands)
Salaries, wages and employee benefits	$	84,125	20.9	%	24.5	%	$	73,043	22.2	%	24.6	%	15.2	%
Fuel and fuel taxes		39,675	9.9		(6.1)	(2)		23,858	7.3		(2.5)	(2)	66.3
Depreciation and amortization		17,010	4.2		4.8	(1)		18,733	5.7		6.1	(1)	(9.2)
Insurance and claims		13,669	3.4		4.0			10,990	3.4		3.7		24.4
Equipment rent		3,360	0.8		1.0			3,997	1.2		1.4		(15.9)
Operations and maintenance		18,440	4.6		5.4			15,849	4.8		5.3		16.3
Purchased transportation		194,011	48.1		56.6			157,041	47.8		52.8		23.5
Operating taxes and licenses		2,533	0.6		0.7			2,595	0.8		0.9		(2.4)
Communications and utilities		1,741	0.4		0.5			1,600	0.5		0.5		8.8
Gain on disposal of assets, net		(7,282)	(1.8)		(2.1)			(317)	(0.1)		(0.1)		2,197.2
Merger costs		2,132	0.5		0.0	(1)		—	—		—		N/A
Other		9,244	2.3		2.7			8,172	2.5		2.7		13.1
Total operating expenses	$	378,658	93.9	%	92.0	%	$	315,561	96.1	%	95.4	%	20.0	%

1) Base revenue is calculated as operating revenue less fuel surcharge revenue and intercompany eliminations.

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

3) Calculated as operating expenses excluding amortization of acquisition related intangibles and merger costs, net of fuel surcharge revenue, as a percentage of operating revenue excluding fuel surcharge revenue.

25

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.  The increase in salaries, wages and employee benefits expense for both the three and six months ended June 30, 2022, was primarily due to increases in performance-based compensation and driver and administrative pay, due to a tight driver market and inflation arising during the latter half of 2021 and into the current year.  Management believes the market for drivers will remain tight, and as such, expects driver wages to continue to increase, although at a reduced rate, in order to attract and retain sufficient numbers of qualified drivers to operate the Company’s fleet.  This expense item will also be affected by the percentage of Trucking miles operated by independent contractors instead of Company employed drivers.

Fuel and fuel taxes

Fuel and fuel taxes relate primarily to 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 increase in fuel and fuel taxes for the three and six months ended June 30, 2022, is primarily due to increases in the price per gallon of diesel fuel compared to the same period in 2021.  For the three and six months ended June 30, 2022, the average diesel fuel prices per gallon as reported by the DOE, increased 70.7% and 60.0%, respectively, when compared to the same periods in 2021. For the three months ended June 30, 2022, this increase was largely offset by a 110.2% increase in fuel surcharge revenue, which increased from $17.1 million to $35.9 million, and a 4.6% decrease in total miles driven by Company drivers compared to the same period in 2021.  For the six months ended June 30, 2022, this increase was largely offset by a 93.4% increase in fuel surcharge revenue, which increased from $31.3 million to $60.5 million, and a 6.0% decrease in total miles driven by Company drivers compared to the same period in 2021. 

The Company continues to pursue fuel efficiency initiatives, including the acquisition of newer, more fuel-efficient revenue equipment and implementing focused driver training programs.  The Company expects to continue to manage its idle time and truck speeds and partner with customers to align fuel surcharge programs to recover a fair portion of its fuel costs.  The Company’s net fuel expense will likely continue 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, depreciation of facilities, 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 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, 2022, equipment rent expense decreased slightly when compared to the 2021 periods.

The decrease in depreciation and amortization expense over the three and six months ended June 30, 2022, when compared to the same periods in 2021 were primarily due to the change in tractor salvage values that occurred during the first quarter of 2022 to better reflect current estimates of the value of such equipment upon retirement, and the timing of revenue equipment replacements.  These changes reduced depreciation expense by $1.0 million and $2.0 million for the three and six months ended June 30, 2022, respectively.  The Company believes these changes will more accurately reflect the value of the revenue equipment on the accompanying condensed consolidated balance sheets.

While the Company intends to continue its focus on improving asset utilization, matching customer demand and strengthening load profitability initiatives, management expects acquisition costs of new revenue equipment to continue to increase in the near term due to the ongoing supply chain issues.  Tractor and trailer manufacturers continuing to experience shortages of semiconductor chips and other component parts and supplies, forcing many to curtail or suspend production, which has led to a lower supply of tractors and trailers and higher prices, which could have a material adverse effect on our business, financial condition, and results of operations, particularly our maintenance expense and driver retention.

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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 accruals, developments in prior-year claims, and insurance premiums and self-insured amounts.  For the three and six months ended June 30, 2022, insurance and claims expense increased compared to the prior year period, primarily due to increased insurance premiums and higher claims costs.

Because the trucking industry continues to experience large auto liability verdicts and settlements, causing a decline in the number of carriers and underwriters that write insurance policies or that are willing to provide insurance for trucking companies, the Company expects insurance and claims expense to continue to be volatile.  These factors have caused the Company’s insurance premiums to increase during the October 2021 renewal.  The Company continues to evaluate options to prevent further expense increases, including the continued use of and the formation of additional captive insurance companies.

Operations and maintenance

Operations and maintenance expense consists primarily of vehicle repairs and maintenance, tolls and weight tickets, and other related costs.  Operations 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.  However, a portion of operations and maintenance expenses are comprised of fixed costs, such as travel expenses, facility lease payments and property taxes.  The increase in operations and maintenance expense for the three and six months ended June 30, 2022, when compared to the same periods in 2021, was largely the result of increased direct repair and tire expenses, accessorial expenses and travel costs, partially offset by lower tolls.  Although we are beginning to see improved delivery schedules, management continues to believe that delays in the receipt of new tractors, paired with the overall age of our Company-owned fleet will likely affect our maintenance costs in future periods.

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, 2022, purchased transportation expense increased significantly when compared to the 2021 periods, primarily due to the continued increase in volume of brokered loads through our USAT Logistics segment and increased third-party capacity costs in a tight capacity market.

The Company is endeavoring to grow its independent contractor fleet and 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, increases in driver wages 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 on disposal of assets, net

The increase in gain on disposal of assets, net during the three and six months ended June 30, 2022, when compared to the same periods in 2021, was due primarily to the continued strength in the used equipment market.  Although we are seeing some softening, management expects that the strong demand in the used equipment market will continue through the remainder of this year; however, the first quarter 2022 adjustment to salvage values is expected to reduce the magnitude of these gains in future periods.

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Interest expense, net

The increase in interest expense, net for the three and six months ended June 30, 2022, when compared to the same periods in 2021, was primarily due to increased borrowing using finance leases and finance sale leasebacks and a $0.3 million write-off of unamortized debt issuance costs associated with the Company’s previous credit facility during the first quarter of 2022, partially offset by decreased borrowings and fees associated with the Credit Facility as compared to the previous credit facility.  See Notes 6 and 7 to the condensed consolidated financial statements for further discussion of the Company’s Credit Facility, insurance financing, and finance and operating lease obligations.

Income tax expense

During the three months ended June 30, 2022, and 2021, the Company’s effective tax rate was 24.3% and 28.5%, respectively.  During the six months ended June 30, 2022, and 2021, the Company’s effective tax rate was 23.9% and 28.0%, respectively.  The effective rate varied from the statutory federal tax rate primarily due to state income taxes and certain non-deductible expenses.  The fiscal 2022 tax rate was affected by vesting of equity-based compensation at a higher stock price than the price at which it was granted, which resulted in a decrease to tax expense.  Additionally, in fiscal 2022, the Company benefited from The Consolidated Appropriations Act of 2021 that increased the deduction for the cost of food or beverage provided by a restaurant to be 100% deductible in 2021 and 2022.  The three and six months ended June 30, 2021, however, did not benefit from The Consolidated Appropriations Act of 2021 because the legislation was not passed until December 2021.  

Seasonality

In the trucking industry, revenue typically follows a seasonal pattern for various commodities and customer businesses.  Peak freight demand has historically occurred in the months of September, October and November.  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.  Weather-related events, such as tornadoes, hurricanes, blizzards, ice storms, floods, and fires, could increase in frequency and severity due to climate change.  

Inflation

Most of the Company’s operating expenses are inflation sensitive, and as such, are not always able to be offset through increases in revenue per mile and cost control efforts.  A prolonged period of inflation could cause interest rates, fuel, wages and other operating costs to increase, which could adversely affect the Company’s results of operations unless freight rates correspondingly increase.  The Company attempts to limit the effects of inflation through increases in revenue per mile, certain cost control efforts and limiting the effects of fuel prices through fuel surcharges and measures intended to reduce the consumption of fuel.  Management also believes that inflation-driven cost increases on overall operating costs would not be materially different for the Company than for its competitors.  Additionally, a prolonged period of inflation could reduce overall economic activity and may reduce overall demand for our services.  

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 unable 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 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 the three and six months ended June 30, 2022, the average diesel fuel prices per gallon as reported by the DOE, increased 70.7% and 60.0%, respectively, when compared to the same periods in 2021.

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As of June 30, 2022, 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, 2022, the Company had total stockholders’ equity of $128.4 million and total debt and finance lease liabilities of $156.7 million, resulting in a total debt, less cash (excluding restricted cash), to total capitalization ratio of 54.6% compared to 56.4% as of December 31, 2021.

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 and availability, 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, 2022, the Company had $53.7 million in purchase commitments for the acquisition of revenue equipment, of which $13.3 million was cancellable.  It is anticipated that these purchase commitments may be funded  through cash provided by operations, borrowings under the Company’s Credit Facility, proceeds from the sale of used revenue equipment or the use of finance and operating leases.

Liquidity and Capital Resources

On June 23, 2022, the Company entered into the Merger Agreement with Schenker and Merger Sub.  The Company has agreed to various covenants and agreements, including, among others, agreements to conduct business in the ordinary course during the period between the execution of the Merger Agreement and the effective time of the Merger.  Outside of certain limited exceptions, we may not take, authorize, commit, resolve, or agree to do certain actions without Schenker’s consent, including, without limitation:

● acquiring businesses and disposing of assets;

● incurring expenditures and indebtedness above specified thresholds;

● issuing equity; and

● declaring dividends.

We do not believe these restrictions will prevent us from meeting our ongoing costs of operations, working capital needs, or capital expenditure requirements.

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 the use of finance and operating leases.  Based on expected financial conditions, net capital expenditures, forecasted 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 for the foreseeable future.

On January 31, 2022, the Company entered into the Credit Facility.  The Credit Facility is structured as a $130.0 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 $60 million, exercisable in increments of $20 million.  Included within its $130.0 million revolving credit facility, is a letter of credit sub-facility in an aggregate amount of $15.0 million and a swing line sub-facility in an aggregate amount of $25.0 million.  The Credit Facility is secured by a pledge of certain of the Company’s assets, with the notable exclusions of any real estate or revenue equipment financed outside the Credit Facility.  

The Credit Facility contains a single springing financial covenant, which requires a consolidated fixed charge coverage ratio of at least 1.0 to 1.0.  The financial covenant springs only in the event excess availability under the Credit Facility drops below (i) 10.0% of the lenders’ total commitments under the Credit Facility and (ii) $13.0 million.  

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Fluctuations in the outstanding balance and related availability under the Credit Facility are driven primarily by cash flows from operations, bi-annual appraisals of revenue equipment, the timing and nature of property and equipment additions that are not funded through other sources of financing, and the nature and timing of receipt of proceeds from disposals of property and equipment.  As of June 30, 2022, availability under the Credit Facility was $130.0 million.  Availability in future periods will be reduced as the $7.9 million in existing letters of credit are transitioned to collateralization by the Credit Facility.  In July 2022, approximately $6.7 million of the collateralized cash was unrestricted and made available to the Company.  

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	2022		2021
Sources of cash:		(in thousands)
Operating activities - net	Operating	$	23,873	$	15,692
Proceeds from sale of property and equipment	Investing		12,843		6,141
Borrowings under long-term debt	Financing		6,000		28,760
Proceeds from issuance of long-term debt	Financing		41,974		—
Net change in bank drafts payable	Financing		41		(2,785)
Uses of cash:
Capital expenditures	Investing		(9,011)		(1,066)
Payments of long-term debt	Financing		(52,201)		(39,156)
Principal payments on financing lease obligations	Financing		(12,290)		(5,888)
Payments of debt issuance costs	Financing		(774)		—
Other uses - net	Financing		(1,108)		(9)
Increase in cash and restricted cash		$	9,347	$	1,689

Operating activities

Our net cash provided by operating activities for the six months ended June 30, 2022, increased from the comparable 2021 period primarily due to an increase in net income and an increase to accounts payable and accrued expenses, offset by an increase in accounts and other receivables.

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.  

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

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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, 2022 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 (ii) accumulated and communicated to the Company’s 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, 2022 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, results of operations or cash flows 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.  The section entitled “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, describes some of the risks and uncertainties associated with the Company’s business.  The information presented below supplements such risk factors.  The risk factors set forth below should be read in conjunction with the risk factors included Company’s Annual Report on Form 10-K for the year ended December 31, 2021.  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.

Risks related to the Merger could materially affect our business, financial condition, results of operations, cash flows, projected results, and future prospects.

Completion of the Merger is subject to a number of closing conditions, including obtaining the approval of our stockholders and the receipt of required regulatory consents and approvals.  We can provide no assurance that all required consents and approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable), and, even if all required consents and approvals can be obtained and all closing conditions are satisfied (or waived, if applicable), we can provide no assurance as to the terms, conditions and timing of such consents and approvals or the timing of the completion of the Merger.  Many of the conditions to completion of the Merger are not within our control, and we cannot predict when or if these conditions will be satisfied (or waived, if applicable).  Any adverse consequence

31

of the pending Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.

Each party’s obligation to consummate the Merger is subject to the accuracy of the representations and warranties of the other party (subject to customary materiality qualifications) and compliance in all material respects with the covenants and agreements contained in the Merger Agreement as of the closing of the Merger, including, with respect to us, covenants to conduct our business in the ordinary course and to not engage in certain kinds of material transactions prior to closing.  In addition, the Merger Agreement may be terminated under certain specified circumstances, including, but not limited to, in connection with a change in the recommendation of our Board to enter into an agreement for a Superior Proposal (as defined in the Merger Agreement).  As a result, we cannot assure you that the Merger will be completed, even if our stockholders approve the Merger, or that, if completed, it will be exactly on the terms set forth in the Merger Agreement or within the expected time frame.

In addition, we are subject to the following risks related to the Merger:

● legal proceedings, judgments or settlements, including those that may be instituted against the Company, the Board, the Company’s executive officers and others following the announcement of the Merger;

● disruptions of current plans and operations caused by the announcement and pendency of the Merger;

● disruption of management’s attention from the Company’s ongoing business operations due to the Merger;

● potential difficulties in employee retention due to the announcement and pendency of the Merger;

● the response of customers, suppliers, drivers and regulators to the announcement and pendency of the Merger;

● disruptions in the execution of plans, strategies, goals and objectives of management for future operations caused by the Merger; and

● the price of the Company common stock price may decline significantly if the Merger is not completed.

The occurrence of any of these events individually or in combination could affect the Company’s business, financial condition, results of operations, cash flows, projected results, and future prospects.

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
2.1*		Agreement and Plan of Merger, dated as of June 23, 2022, by and among the USA Truck, Inc., Schenker, Inc., and Tango Merger, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on June 24, 2022).
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 March 31, 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**		Third Amendment to the USA Truck, Inc. 2014 Omnibus Incentive Plan (incorporated by reference to Appendix A of the Company’s definitive additional materials on Schedule 14A, filed on May 3, 2022).
10.2**	#	First Amendment to Executive Severance and Change in Control Agreement, between the Company and George T. Henry dated June 15, 2022.
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:

#	Filed herewith.
##	Furnished herewith.
*	Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.
**	Management contract or compensatory plan, contract or arrangement

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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.
Date:	August 8, 2022	By:	/s/ James D. Reed
			(Signature)
			James D. Reed
			President and Chief Executive Officer
Date:	August 8, 2022	By:	/s/ Zachary B. King
			(Signature)
			Zachary B. King
			Executive Vice President and Chief Financial Officer

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EX-10.2

EXHIBIT 10.2

FIRST AMENDMENT TO

EXECUTIVE SEVERANCE AND CHANGE IN CONTROL AGREEMENT

This First Amendment to Executive Severance and Change in Control Agreement (this "Amendment"), dated as of June 13, 2022, is made by and between USA Truck, Inc., a Delaware corporation, and George Henry IV, Executive Vice President and Chief Operating Officer. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Agreement (as hereinafter defined).

WHEREAS, the Company and the Executive are parties to that certain Executive Severance and Change in Control Agreement, dated as of March 13, 2018 (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Agreement"); and

WHEREAS, the Company and the Executive desire certain amendments to the Agreement and, subject to the terms and conditions hereof, the parties have agreed to effect such amendments through this Amendment.

NOW, THEREFORE,in consideration of the premises and the mutual agreements set forth herein, the Company and the Executive hereby agree as follows:

1.Amendments.  The Agreement is hereby amended as follows:

a.Sections 4(B)(i)(a) through (c) of the Agreement are hereby amended and restated in their entirety to read as follows:

(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 twelve (12) months following the Date of Termination or such lesser number of months Executive is employed by the Company (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.

b.Exhibit A to the Agreement is hereby amended and restated in its entirety as set forth in Exhibit A hereto.

2.Effect of Amendment.  All of the terms of the Agreement, as amended hereby, shall be and remain in full force and effect and shall constitute the legal, valid, binding, and enforceable obligations of the Company and the Executive.

3.Binding Nature.  This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns.

4.Governing Law.  The validity, interpretation, construction, and performance of this Amendment 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.

5.Miscellaneous.  No provision of the Amendment 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.

6.Counterparts.  This Amendment may be executed in one or more counterparts, each of which will be deemed to be an original, but all of which together will constitute one and the same instrument. Facsimile or electronic counterparts will be effective.

7.Entire Understanding.  This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto.

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

[SIGNATURE PAGE FOLLOWING]

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

USA TRUCK, INC.

By:	/s/ James Reed
Name:	James Reed
Title:	President & CEO
	GEORGE HENRY IV
	/s/ George Henry

Exhibit A

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 Fair Labor Standards 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, accrued but unused vacation through the Separation Date, COBRA continuation coverage and life insurance conversion rights, if any, and (iv) 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 the Agreement infringe on Executive’s rights described in the foregoing sentence, 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 release.

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 Effective Date (as hereinafter defined) of the 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 Agreement;

(b)He has at least twenty-one (21) days within which to consider the Agreement, but if he wishes to sign the Agreement earlier, he may do so by signing the Acknowledgment and Waiver of the 21-day consideration period in the form attached as Exhibit B to the Agreement;

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

(d)This Agreement will not be effective until the eighth day after Executive executes and does not revoke the Agreement (the “Effective Date”); and

(e)Nothing in the Agreement 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.  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.  In the event that Executive exercises his right of revocation, neither Executive nor any member of the Company or its Affiliates will have any further rights or obligations under the Agreement.

Executive represents and warrants that he has no present knowledge of any injury, illness or disease to him that is or might be compensable as a workers’ compensation claim or similar claim for workplace injuries, illnesses or diseases.

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

[Signature page follows]

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

Signature: _____________________________________________

George Henry IV

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:	August 8, 2022	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:	August 8, 2022	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, 2022 (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:	August 8, 2022	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, 2022 (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:	August 8, 2022	By:	/s/ Zachary B. King
			Zachary B. King
			Principal Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2022	Aug. 05, 2022
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2022
Entity File Number	1-35740
Entity Registrant Name	USA TRUCK INC.
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)		9,033,766
Entity Central Index Key	0000883945
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Amendment Flag	false

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and restricted cash (restricted cash of $8,499 and $405 , respectively)	$ 10,699	$ 1,352
Receivables, net of allowance for doubtful accounts of $294 and $490, respectively	116,538	100,166
Inventories	1,236	1,387
Assets held for sale	1,216
Prepaid expenses and other current assets	7,645	10,103
Total current assets	137,334	113,008
Property and equipment:
Land and structures	28,872	34,266
Revenue equipment	337,998	316,492
Service, office and other equipment	25,503	31,213
Property and equipment, at cost	392,373	381,971
Accumulated depreciation and amortization	(165,110)	(175,024)
Property and equipment, net	227,263	206,947
Operating leases - right of use assets	25,450	22,898
Goodwill	5,231	5,231
Other intangibles, net	13,170	13,815
Other assets	3,167	2,136
Total assets	411,615	364,035
Current liabilities:
Accounts payable	46,673	36,378
Current portion of insurance and claims accruals	10,098	8,973
Accrued expenses	14,390	10,006
Current finance lease obligations	16,834	14,095
Current operating lease obligations	7,221	6,679
Long-term debt, current maturities	16,956	11,069
Total current liabilities	112,172	87,200
Other long-term liabilities	302	342
Long-term debt, less current maturities	53,241	63,355
Long-term finance lease obligations	69,688	56,274
Long-term operating lease obligations	18,665	16,644
Deferred income taxes	22,049	21,914
Insurance and claims accruals, less current portion	7,112	6,881
Total liabilities	283,229	252,610
Commitments and contingencies
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 12,481,442 shares, and 12,263,030 shares, respectively	125	123
Additional paid-in capital	66,324	63,752
Retained earnings	119,593	103,283
Less treasury stock, at cost ( 3,447,676 shares, and 3,367,418 shares, respectively)	(57,656)	(55,733)
Total stockholders' equity	128,386	111,425
Total liabilities and stockholders' equity	$ 411,615	$ 364,035

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Restricted cash	$ 8,499	$ 405
Receivables, net of allowance for doubtful accounts	$ 294	$ 490
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)	12,481,442	12,263,030
Treasury Stock, Shares	3,447,676	3,367,418

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Operating revenue	$ 202,130	$ 170,031	$ 403,193	$ 328,536
Operating expenses:
Salaries, wages and employee benefits	42,238	36,488	84,125	73,043
Fuel and fuel taxes	22,638	12,414	39,675	23,858
Depreciation and amortization	8,986	9,163	17,010	18,733
Insurance and claims	7,046	5,181	13,669	10,990
Equipment rent	1,526	2,048	3,360	3,997
Operations and maintenance	9,925	8,783	18,440	15,849
Purchased transportation	95,692	82,938	194,011	157,041
Operating taxes and licenses	1,273	1,323	2,533	2,595
Communications and utilities	735	796	1,741	1,600
Gain on disposal of assets, net	(881)	(140)	(7,282)	(317)
Merger costs	2,132	0	2,132
Other	4,968	4,108	9,244	8,172
Total operating expenses	196,278	163,102	378,658	315,561
Operating income	5,852	6,929	24,535	12,975
Other expenses:
Interest expense, net	1,542	1,014	2,959	2,039
Other, net	84	49	152	110
Total other expenses, net	1,626	1,063	3,111	2,149
Income before income taxes	4,226	5,866	21,424	10,826
Income tax expense	1,027	1,673	5,114	3,036
Consolidated net income and comprehensive income	$ 3,199	$ 4,193	$ 16,310	$ 7,790
Net earnings per share:
Average shares outstanding (basic) (in shares)	8,876	8,806	8,904	8,826
Basic earnings per share (in dollars per share)	$ 0.36	$ 0.48	$ 1.83	$ 0.88
Average shares outstanding (diluted) (in shares)	8,987	8,947	9,062	8,976
Diluted earnings per share (in dollars per share)	$ 0.36	$ 0.47	$ 1.80	$ 0.87

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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, 2020	$ 120	$ 60,692	$ 78,515	$ (54,626)	$ 84,701
Balance (in shares) at Dec. 31, 2020	12,038
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		168			168
Restricted stock award grant	$ 2	(2)
Restricted stock award grant (in shares)	193
Forfeited restricted stock		390		(390)
Forfeited restricted stock (in shares)	(4)
Net share settlement related to vested equity awards		407		(412)	(5)
Net income			3,597		3,597
Balance at Mar. 31, 2021	$ 122	61,655	82,112	(55,428)	88,461
Balance (in shares) at Mar. 31, 2021	12,227
Balance at Dec. 31, 2020	$ 120	60,692	78,515	(54,626)	84,701
Balance (in shares) at Dec. 31, 2020	12,038
Increase (Decrease) in Stockholders' Equity
Net income					7,790
Balance at Jun. 30, 2021	$ 123	62,268	86,305	(55,468)	93,228
Balance (in shares) at Jun. 30, 2021	12,253
Balance at Mar. 31, 2021	$ 122	61,655	82,112	(55,428)	88,461
Balance (in shares) at Mar. 31, 2021	12,227
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		577			577
Restricted stock award grant	$ 1				1
Restricted stock award grant (in shares)	26
Net share settlement related to vested equity awards		36		(40)	(4)
Net income			4,193		4,193
Balance at Jun. 30, 2021	$ 123	62,268	86,305	(55,468)	93,228
Balance (in shares) at Jun. 30, 2021	12,253
Balance at Dec. 31, 2021	$ 123	63,752	103,283	(55,733)	111,425
Balance (in shares) at Dec. 31, 2021	12,263
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		748			748
Restricted stock award grant	$ 2	(2)
Restricted stock award grant (in shares)	199
Forfeited restricted stock		1,416		(1,416)
Net share settlement related to vested equity awards		(592)		(488)	(1,080)
Net share settlement related to vested equity awards (in shares)	(7)
Net income			13,111		13,111
Balance at Mar. 31, 2022	$ 125	65,322	116,394	(57,637)	124,204
Balance (in shares) at Mar. 31, 2022	12,455
Balance at Dec. 31, 2021	$ 123	63,752	103,283	(55,733)	111,425
Balance (in shares) at Dec. 31, 2021	12,263
Increase (Decrease) in Stockholders' Equity
Net income					16,310
Balance at Jun. 30, 2022	$ 125	66,324	119,593	(57,656)	128,386
Balance (in shares) at Jun. 30, 2022	12,481
Balance at Mar. 31, 2022	$ 125	65,322	116,394	(57,637)	124,204
Balance (in shares) at Mar. 31, 2022	12,455
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		1,011			1,011
Restricted stock award grant (in shares)	27
Net share settlement related to vested equity awards		(9)		(19)	(28)
Net share settlement related to vested equity awards (in shares)	(1)
Net income			3,199		3,199
Balance at Jun. 30, 2022	$ 125	$ 66,324	$ 119,593	$ (57,656)	$ 128,386
Balance (in shares) at Jun. 30, 2022	12,481

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Operating activities:
Net income			$ 16,310	$ 7,790
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	$ 8,986	$ 9,163	17,010	18,733
Bad debt benefit			(191)	(102)
Deferred income tax benefit, net			135	(1,979)
Stock-based compensation			1,759	745
Gain on disposal of assets, net	(881)	(140)	(7,282)	(317)
Other			214	71
Changes in operating assets and liabilities:
Accounts and other receivables			(16,180)	(18,174)
Inventories and prepaid expenses			3,383	1,852
Accounts payable and accrued expenses			8,601	6,213
Insurance and claims accruals			2,359	357
Other long-term assets and liabilities			(2,245)	503
Net cash provided by operating activities			23,873	15,692
Investing activities:
Capital expenditures			(9,011)	(1,066)
Proceeds from sale of property and equipment			12,843	6,141
Net cash provided by investing activities			3,832	5,075
Financing activities:
Borrowings under long-term debt			6,000	28,760
Payments on long-term debt			(52,201)	(39,156)
Principal payments on financing lease obligations			(12,290)	(5,888)
Proceeds from obligation under finance lease			41,974
Payment of debt issuance costs			(774)
Net change in bank drafts payable			41	(2,785)
Proceeds from capital sale leaseback					$ 24,500
Net payments for tax withholdings for vested stock-based awards			(1,108)	(9)
Net cash used in financing activities			(18,358)	(19,078)
Increase in cash and restricted cash			9,347	1,689
Cash and restricted cash:
Beginning of period			1,352	325	325
End of period	$ 10,699	$ 2,014	10,699	2,014	$ 1,352
Supplemental disclosure of cash flow information:
Interest			2,710	2,106
Income taxes, net of refunds			7,516	6,623
Supplemental disclosure of non-cash investing:
Purchase of revenue equipment included in accounts payable			$ 6,059	$ 1,021

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BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2022

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 June 30, 2022, and December 31, 2021, and our results of operations and comprehensive income for the three and six months ended June 30, 2022 and 2021.

These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) 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, 2021.

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, 2022.

The accompanying condensed consolidated financial statements include USA Truck Inc., and its wholly owned subsidiaries: International Freight Services, Inc. (“IFS”), a Delaware corporation; USA Truck, LLC, a Delaware limited liability company; USA Truck Fleetco, LLC, a Delaware limited liability company; USA Truck Logistics, LLC, a Delaware limited liability company; Skyraider Risk Retention Group Inc. (“SRRG”), a South Carolina 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.  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 2022, the Company increased the salvage value of its tractor fleet 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, 2022, this change in estimate resulted in a decrease in depreciation and amortization expense of approximately $1.0 million and $2.0 million, respectively.

Risks and Uncertainties

We continue to monitor the progression of the COVID-19 pandemic, including the outbreak of new strains of the virus, further government responses, including vaccine, testing, and mask mandates, and development of treatments and vaccines and the resulting potential effect on our financial position, results of operations, cash flows and liquidity.  Should the efforts to recover from the pandemic deteriorate or stall, 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”) No. 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.  ASU 2016-13 is effective for smaller reporting companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.  We continue to evaluate the effect of adopting ASU 2016-13, but believe the effects will not be significant and will be limited to the valuation of the Company’s trade receivables.  The Company expects to adopt ASU 2016-13 using the modified retrospective approach.

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REVENUE RECOGNITION

6 Months Ended

Jun. 30, 2022

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,
	2022								2021
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	95,653	$	72,216	$	(6,346)	$	161,523	$	90,712	$	72,204	$	(13,545)	$	149,371
Fuel surcharge		23,535		12,665		(310)		35,890		12,038		5,569		(534)		17,073
Accessorial		3,327		1,390		—		4,717		2,611		976		—		3,587
Total	$	122,515	$	86,271	$	(6,656)	$	202,130	$	105,361	$	78,749	$	(14,079)	$	170,031

	Six Months Ended June 30,
	2022								2021
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	193,225	$	160,150	$	(18,792)	$	334,583	$	181,727	$	134,666	$	(26,149)	$	290,244
Fuel surcharge		39,759		21,105		(316)		60,548		22,358		9,866		(909)		31,315
Accessorial		5,602		2,460		—		8,062		4,379		2,598		—		6,977
Total	$	238,586	$	183,715	$	(19,108)	$	403,193	$	208,464	$	147,130	$	(27,058)	$	328,536

At June 30, 2022 and December 31, 2021, the Company had contract assets, representing our right to consideration for transportation services not yet billed, of $2.1 million and $1.6 million, respectively.

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SEGMENT REPORTING

6 Months Ended

Jun. 30, 2022

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 expenses, operating ratios and operating income, as well as on key operating statistics, to make operating decisions.

Trucking.  Trucking is comprised of truckload and dedicated freight service offerings.  Truckload service offerings provide motor carrier services as a common and contract carrier, utilizing equipment owned or leased by the Company or independent contractors.  Dedicated freight service offerings provide 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.  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,
	2022		2021		2022		2021
Operating revenue (1)	(in thousands)
Trucking revenue	$	122,515	$	105,361	$	238,586	$	208,464
Trucking intersegment eliminations		(111)		(259)		(153)		(586)
Trucking operating revenue		122,404		105,102		238,433		207,878
USAT Logistics revenue		86,271		78,749		183,715		147,130
USAT Logistics intersegment eliminations		(6,545)		(13,820)		(18,955)		(26,472)
USAT Logistics operating revenue		79,726		64,929		164,760		120,658
Total operating revenue	$	202,130	$	170,031	$	403,193	$	328,536

1) Includes foreign revenue of $14.6 million and $10.0 million for the three months ended June 30, 2022 and 2021, respectively, and $27.0 million and $18.9 million for the six months ended June 30, 2022, and 2021, respectively.

A summary of operating income by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Operating income	(in thousands)
Trucking	$	4,296	$	3,057	$	16,925	$	6,577
USAT Logistics		3,688		3,872		9,742		6,398
Unallocated merger costs		(2,132)		—		(2,132)		—
Total operating income	$	5,852	$	6,929	$	24,535	$	12,975

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Depreciation and amortization	(in thousands)
Trucking	$	8,576	$	8,901	$	16,296	$	18,197
USAT Logistics		410		262		714		536
Total depreciation and amortization	$	8,986	$	9,163	$	17,010	$	18,733

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EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

6 Months Ended

Jun. 30, 2022

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, which provided for the granting of up to 500,000 shares of common stock through equity-based awards to directors, officers and other key employees.  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.  The Third Amendment to the Incentive Plan was adopted in May 2022, which, among other things, increased the number of shares of common stock available for issuance under the Incentive Plan by an additional 250,000 shares.  As of June 30, 2022, 416,302 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, 2022

ACCRUED EXPENSES

ACCRUED EXPENSES

NOTE 5 – ACCRUED EXPENSES

Accrued expenses consist of the following:

	June 30, 2022		December 31, 2021
	(in thousands)
Salaries, wages and employee benefits	$	8,888	$	7,318
Federal and state tax accruals		1,863		685
Other		3,639		2,003
Total accrued expenses	$	14,390	$	10,006

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DEBT

6 Months Ended

Jun. 30, 2022

DEBT

DEBT

NOTE 6 – DEBT

Long-term debt consisted of the following:

	June 30, 2022		December 31, 2021
	(in thousands)
Revolving credit agreement	$	—	$	38,000
Sale-leaseback finance obligations		28,906		32,739
Term loans		39,473		—
Insurance premium financing		1,762		3,601
Other		56		84
		70,197		74,424
Less current maturities		(16,956)		(11,069)
Total long-term debt	$	53,241	$	63,355

New credit facility

On January 31, 2022, the Company entered into a new senior secured revolving credit facility (the “Credit Facility”) with a group of lenders and BMO Harris Bank, N.A., as agent (“Agent”).  Contemporaneously with the funding of the Credit Facility, the Company paid off the obligations under its prior credit facility and terminated such facility.

The Credit Facility is structured as a $130.0 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 $60 million, exercisable in increments of $20 million.  The Credit Facility is a five-year facility scheduled to terminate on January 31, 2027.  Borrowings under the Credit Facility are classified as either secured overnight financing rate (“SOFR”) loans or “Base Rate Loans”.  SOFR Loans accrue interest at SOFR plus an applicable margin that adjusts quarterly to between 1.25% and 1.75% based on the Company’s consolidated fixed charge coverage ratio.  Base Rate Loans accrue interest at a base rate equal to the Agent’s prime rate plus an applicable margin that adjusts quarterly to between 0.25% and 0.75% based on the Company’s consolidated fixed charge coverage ratio.  The Credit Facility includes, within its $130.0 million revolving credit facility, a letter of credit sub-facility in an aggregate amount of $15.0 million and a swing line sub-facility 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 certain of the Company’s assets, with the notable exclusions of any real estate or revenue equipment financed outside the Credit Facility. 

Borrowings under the Credit Facility are subject to a borrowing base limited to (A) the sum of (i) 85.0% of eligible accounts receivable, plus (ii) 90.0% of eligible investment grade accounts receivable (reduced to 85.0% in certain situations), plus (iii) the lesser of (a) 85.0% of eligible unbilled accounts receivable and (b) $17.5 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.  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 springing financial covenant, which requires a consolidated fixed charge coverage ratio of at least 1.0 to 1.0.  The financial covenant springs only in the event excess availability under the Credit Facility drops below (i) 10.0% of the lenders’ total commitments under the Credit Facility and (ii) $13.0 million.  As of June 30, 2022, availability under the Credit Facility was $130.0 million.  Availability in future periods will be reduced as the $7.9 million in existing letters of credit are transitioned to collateralization by the

Credit Facility.   In July 2022, approximately $6.7 million of the collateralized cash was unrestricted and made available to the Company.  

The Credit Facility includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts outstanding under the Credit Facility may be accelerated, and the lenders’ commitments may be terminated.  The Credit Facility contains certain restrictions and covenants relating to, among other things, dividends, liens, acquisitions and dispositions, affiliate transactions, and other indebtedness.

Previous credit facility

The previous credit facility was a $170.0 million revolving credit facility, with a $75.0 million accordion feature exercisable in increments of at least $20.0 million.  The previous credit facility was a five-year facility scheduled to terminate on January 31, 2024.  Borrowings under the previous credit facility were classified as either “base rate loans” or “LIBOR loans”, and included a letter of credit sub-facility in aggregate of $15.0 million and a swingline sub-facility in aggregate of $25.0 million.  An unused line fee of 0.25% was 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 previous credit facility.  The previous credit facility was secured by a pledge of substantially all of the Company’s assets, except for any real estate or revenue equipment financed outside the previous credit facility.

The previous credit facility contained a single financial covenant that was triggered in the event excess availability fell below 10.0% of the lenders’ total commitments, and 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 were triggered in the event excess availability fell below 20.0% of the lenders’ total commitments.  Additionally, the Company recognized charges in the first quarter of 2022 of $0.3 million associated with the write-off of unamortized debt issuance costs associated with the previous credit facility to the interest expense line item.  

Restricted cash

The Company has $7.9 million in letters of credit that were supported by the previous credit facility.  Upon termination of the previous credit facility, the Company was required to cash collateralize the letters of credit at 105% of the outstanding amounts, or $8.3 million.  In future periods, as the letters of credit are transitioned to the Credit Facility, the funds will be transferred to an unrestricted account and the restrictions will lapse.  In July 2022, approximately $6.7 million of the collateralized cash was unrestricted and made available to the Company.  

Term loans

In January 2022, the Company entered into a series of term loans totaling approximately $42.0 million.  These term loans are secured by operating equipment with varying degrees of remaining lives, with loan durations corresponding to the remaining useful lives and ranging from 36 to 96 months.  The average interest rate on the loans was 3.2%. The proceeds from these loans were used to pay off the balance of our previous credit facility.  Under these agreements, the Company will make monthly payments of approximately $0.7 million for the first 36 months.  After that time, the monthly obligation will reduce as each term loan is repaid.

Sale-leaseback transactions

In December 2021, the Company entered into a sale-leaseback transaction whereby it sold trailers for approximately $24.5 million and concurrently entered into a finance lease agreement for the sold trailers with a 48 month term.  Under the lease agreement, the Company will make monthly payments of approximately $0.5 million, and at the end of the lease, has the option to purchase the trailers for nominal consideration.  This transaction does not qualify for sale-leaseback accounting due to the bargain purchase option and is therefore treated as a financing obligation.

Insurance premium financing

In October 2021, the Company entered into a short-term agreement to finance approximately $5.5 million with a third-party financing company for a portion of the Company’s annual insurance premiums.

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LEASES AND OTHER COMMITMENTS

6 Months Ended

Jun. 30, 2022

LEASES AND OTHER COMMITMENTS

LEASES AND OTHER COMMITMENTS

NOTE 7 – LEASES AND OTHER COMMITMENTS

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(in thousands)
Operating lease costs	$	2,224	$	1,908	$	4,254	$	3,842
Finance lease costs:
Amortization of assets		4,134		2,782		7,277		6,796
Interest on lease liabilities		910		639		1,543		1,309
Total finance lease costs		5,044		3,421		8,820		8,105
Variable and short-term lease costs		413		703		911		1,286
Total lease costs	$	7,681	$	6,032	$	13,985	$	13,233

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

	June 30, 2022			December 31, 2021
Operating leases:	(dollars in thousands)
Operating leases - right-of-use assets	$	25,450		$	22,898
Current operating lease obligations		7,221			6,679
Long-term operating lease obligations		18,665			16,644
Total operating lease liabilities	$	25,886		$	23,323
Finance leases and assets subject to sale leasebacks:
Property and equipment, at cost		156,379			137,736
Accumulated amortization		(51,436)			(47,699)
Property and equipment, net	$	104,943		$	90,037
Finance lease obligations:
Current finance lease obligations		16,834			14,095
Long-term finance lease obligations		69,688			56,274
	$	86,522		$	70,369
Weighted average remaining lease term:		(in months)			(in months)
Operating leases		51			50
Finance leases		37			35
Weighted average discount rate:
Operating leases		4.14	%		4.53	%
Finance leases		3.30	%		3.69	%

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

	June 30, 2022		June 30, 2021
Cash paid for amounts included in measurement of liabilities:	(in thousands)
Operating cash flows from operating leases	$	214	$	71
Operating cash flows from finance leases		910		1,309
Financing cash flows from finance leases		12,290		5,888
Assets obtained in exchange for lease liabilities:
Operating leases	$	5,842	$	170
Finance leases		28,102		—

OTHER COMMITMENTS

As of June 30, 2022, the Company had $53.7 million in purchase commitments for the acquisition of revenue equipment, of which $13.3 million was cancellable.  It is anticipated that these purchase commitments may be funded  through cash provided by operations, borrowings under the Company’s Credit Facility, proceeds from the sale of used revenue equipment or the use of finance and operating leases.    

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INCOME TAXES

6 Months Ended

Jun. 30, 2022

INCOME TAXES

INCOME TAXES

NOTE 8 – INCOME TAXES

During the three months ended June 30, 2022 and 2021 the Company’s effective tax rate was 24.3% and 28.5%, respectively.  During the six months ended June 30, 2022, and 2021 the Company’s effective tax rate was 23.9% and 28.0%, respectively.  The effective rate varied from the statutory federal tax rate primarily due to state income taxes and certain non-deductible expenses.  The fiscal 2022 tax rate was affected by vesting of equity-based compensation at a higher stock price than the price at which it was granted, which resulted in a decrease to tax expense.  Additionally, in fiscal 2022, the Company benefited from The Consolidated Appropriations Act of 2021 that increased the deduction for the cost of food or beverage provided by a restaurant to be 100% deductible in 2021 and 2022.  The three and six month periods ended June 30, 2021, however, did not benefit from The Consolidated Appropriations Act of 2021 because the legislation was not passed until December 2021.  

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EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2022

EARNINGS PER SHARE

EARNINGS PER SHARE

NOTE 9 – EARNINGS PER SHARE

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Numerator:	(in thousands, except per share amounts)
Net income	$	3,199	$	4,193	$	16,310	$	7,790
Denominator:
Denominator for basic earnings per share – weighted average shares		8,876		8,806		8,904		8,826
Effect of dilutive securities:
Employee restricted stock and incentive stock options		111		141		158		150
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion		8,987		8,947		9,062		8,976
Basic earnings per share	$	0.36	$	0.48	$	1.83	$	0.88
Diluted earnings per share	$	0.36	$	0.47	$	1.80	$	0.87
Weighted average anti-dilutive employee restricted stock and incentive stock options		301		114		238		126

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LEGAL PROCEEDINGS

6 Months Ended

Jun. 30, 2022

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, results of operations or cash flows in any given reporting period.

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PROPOSED MERGER

6 Months Ended

Jun. 30, 2022

PROPOSED MERGER

PROPOSED MERGER

NOTE 11 – PROPOSED MERGER

On June 23, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Schenker, Inc., a New York corporation (“Schenker”) and Tango Merger, Inc., a Delaware corporation and a wholly owned subsidiary of Schenker (“Merger Sub”).  The Merger Agreement provides that Merger Sub will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Schenker (the “Merger”).  Schenker and Merger Sub are affiliates of DB Schenker, one of the world's leading logistics service providers.

At the effective time of the Merger and as a result of the Merger:

● Each share of the Company’s common stock, par value $0.01 per share (the “Company common stock”), that is issued and outstanding immediately prior to the effective time of the Merger, other than shares to be cancelled pursuant to the Merger Agreement or shares of Company common stock held by holders who have made a valid demand for appraisal in accordance with Section 262 of the Delaware General Corporation Law, will be converted into the right to receive $31.72 in cash, without interest (the “Merger Consideration”), subject to any applicable withholding taxes;

● Each outstanding and unexercised option to purchase shares of Company common stock (whether vested or unvested and whether exercisable or unexercisable) (a “Company stock option”) will become fully vested and be cancelled in exchange for the right to receive a cash payment, without interest and subject to applicable tax withholding, of an amount equal to the product of (i) the total number of shares of Company common stock underlying each such Company stock option and (ii) the excess of the Merger Consideration over the exercise price per share of each such Company stock option;

● Each outstanding share of restricted stock of the Company (whether vested or unvested) (“restricted stock”), will become fully vested and be cancelled in exchange for the right to receive a cash payment, without interest and subject to applicable tax withholding, of an amount equal to the product of (i) the total number of shares of Company common stock underlying each such award of restricted stock and (ii) the Merger Consideration; and

● Each outstanding performance stock unit with respect to shares of Company common stock (whether vested or unvested) (a “PSU”), will become fully vested and be cancelled in exchange for the right to receive a cash payment, without interest and subject to applicable tax withholding, of an amount equal to the product of (i) the total number of shares of Company common stock underlying each such PSU and (ii) the Merger Consideration.

The closing of the Merger is subject to various conditions, including (i) the adoption of the Merger Agreement by holders of two-thirds of the issued and outstanding shares of Company common stock entitled to vote thereon at the stockholder meeting (the “Company Stockholder Approval”); (ii) the absence of any outstanding law, regulation, or order enacted, promulgated, issued, entered, amended or enforced by any governmental entity that restrains, enjoins or otherwise prohibits the consummation of the Merger; (iii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (the “HSR Act”); (iv) the CFIUS (the “Committee  on Foreign Investment in the United States”) Approval (as defined in the Merger Agreement); and (v) the accuracy of the representations and warranties contained in the Merger Agreement, subject to customary materiality qualifications, as of the date of the Merger Agreement and as of the date of the closing of the Merger, and compliance in all material respects with the covenants and agreements contained in the Merger Agreement.  In addition, the obligation of Schenker and Merger Sub to consummate the Merger is subject to the absence, since the date of the Merger Agreement, of a Company Material Adverse Effect (as defined in the Merger Agreement).  The closing of the Merger is not subject to a financing condition.  Under the terms of the Merger Agreement, consummation of the Merger will occur on the third business day following the satisfaction or waiver of the conditions to closing of the Merger.

Assuming the satisfaction of the conditions set forth in the Merger Agreement, including Company Stockholder Approval, the Company expects the Merger to close by the end of 2022.  Until the closing, the Company will continue to operate as an independent company.

The Merger Agreement provides that, in certain circumstances, including the termination of the Merger Agreement by the Company to accept a Superior Proposal (as defined in the Merger Agreement), the termination of the Merger Agreement by Schenker following a change in recommendation by the Board, and other customary circumstances, the Company would be required to pay Schenker a termination fee of $10,000,000.

In the second quarter of 2022, the Company incurred approximately $2.1 million of Merger related costs that are recorded in the line item ‘Merger costs’ in the condensed consolidated statement of income and comprehensive income.  These costs related primarily to legal costs incurred on behalf of the Company, executives, and the Board and the costs related to the fairness opinion, from a financial point of view, of the merger consideration.

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ASSET HELD FOR SALE

6 Months Ended

Jun. 30, 2022

ASSET HELD FOR SALE

ASSET HELD FOR SALE

NOTE 12 –ASSET HELD FOR SALE

On June 20, 2022, the Company entered into an agreement to sell excess property consisting of approximately 25.5 acres of land and the related facility located in Van Buren, Arkansas, with a net book value of $1.2 million for approximately $3.2 million.  The agreement contains customary terms and conditions, including a due diligence inspection period, and is expected to close prior to end of the year.

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REVENUE RECOGNITION (Tables)

6 Months Ended

Jun. 30, 2022

REVENUE RECOGNITION

Disaggregation of revenue

	Three Months Ended June 30,
	2022								2021
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	95,653	$	72,216	$	(6,346)	$	161,523	$	90,712	$	72,204	$	(13,545)	$	149,371
Fuel surcharge		23,535		12,665		(310)		35,890		12,038		5,569		(534)		17,073
Accessorial		3,327		1,390		—		4,717		2,611		976		—		3,587
Total	$	122,515	$	86,271	$	(6,656)	$	202,130	$	105,361	$	78,749	$	(14,079)	$	170,031

	Six Months Ended June 30,
	2022								2021
	Trucking		USAT Logistics		Eliminations		Total		Trucking		USAT Logistics		Eliminations		Total
Revenue type	(in thousands)
Freight	$	193,225	$	160,150	$	(18,792)	$	334,583	$	181,727	$	134,666	$	(26,149)	$	290,244
Fuel surcharge		39,759		21,105		(316)		60,548		22,358		9,866		(909)		31,315
Accessorial		5,602		2,460		—		8,062		4,379		2,598		—		6,977
Total	$	238,586	$	183,715	$	(19,108)	$	403,193	$	208,464	$	147,130	$	(27,058)	$	328,536

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SEGMENT REPORTING (Tables)

6 Months Ended

Jun. 30, 2022

SEGMENT REPORTING

Schedule of segment information by segment

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Operating revenue (1)	(in thousands)
Trucking revenue	$	122,515	$	105,361	$	238,586	$	208,464
Trucking intersegment eliminations		(111)		(259)		(153)		(586)
Trucking operating revenue		122,404		105,102		238,433		207,878
USAT Logistics revenue		86,271		78,749		183,715		147,130
USAT Logistics intersegment eliminations		(6,545)		(13,820)		(18,955)		(26,472)
USAT Logistics operating revenue		79,726		64,929		164,760		120,658
Total operating revenue	$	202,130	$	170,031	$	403,193	$	328,536

1) Includes foreign revenue of $14.6 million and $10.0 million for the three months ended June 30, 2022 and 2021, respectively, and $27.0 million and $18.9 million for the six months ended June 30, 2022, and 2021, respectively.

A summary of operating income by segment is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Operating income	(in thousands)
Trucking	$	4,296	$	3,057	$	16,925	$	6,577
USAT Logistics		3,688		3,872		9,742		6,398
Unallocated merger costs		(2,132)		—		(2,132)		—
Total operating income	$	5,852	$	6,929	$	24,535	$	12,975

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Depreciation and amortization	(in thousands)
Trucking	$	8,576	$	8,901	$	16,296	$	18,197
USAT Logistics		410		262		714		536
Total depreciation and amortization	$	8,986	$	9,163	$	17,010	$	18,733

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ACCRUED EXPENSES (Tables)

6 Months Ended

Jun. 30, 2022

ACCRUED EXPENSES

Schedule of accrued expenses

	June 30, 2022		December 31, 2021
	(in thousands)
Salaries, wages and employee benefits	$	8,888	$	7,318
Federal and state tax accruals		1,863		685
Other		3,639		2,003
Total accrued expenses	$	14,390	$	10,006

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DEBT (Tables)

6 Months Ended

Jun. 30, 2022

DEBT

Schedule of long-term debt instruments

Long-term debt consisted of the following:

	June 30, 2022		December 31, 2021
	(in thousands)
Revolving credit agreement	$	—	$	38,000
Sale-leaseback finance obligations		28,906		32,739
Term loans		39,473		—
Insurance premium financing		1,762		3,601
Other		56		84
		70,197		74,424
Less current maturities		(16,956)		(11,069)
Total long-term debt	$	53,241	$	63,355

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LEASES AND OTHER COMMITMENTS (Tables)

6 Months Ended

Jun. 30, 2022

LEASES AND OTHER COMMITMENTS

Schedule of lease expense

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(in thousands)
Operating lease costs	$	2,224	$	1,908	$	4,254	$	3,842
Finance lease costs:
Amortization of assets		4,134		2,782		7,277		6,796
Interest on lease liabilities		910		639		1,543		1,309
Total finance lease costs		5,044		3,421		8,820		8,105
Variable and short-term lease costs		413		703		911		1,286
Total lease costs	$	7,681	$	6,032	$	13,985	$	13,233

Schedule of supplemental balance sheet information

	June 30, 2022			December 31, 2021
Operating leases:	(dollars in thousands)
Operating leases - right-of-use assets	$	25,450		$	22,898
Current operating lease obligations		7,221			6,679
Long-term operating lease obligations		18,665			16,644
Total operating lease liabilities	$	25,886		$	23,323
Finance leases and assets subject to sale leasebacks:
Property and equipment, at cost		156,379			137,736
Accumulated amortization		(51,436)			(47,699)
Property and equipment, net	$	104,943		$	90,037
Finance lease obligations:
Current finance lease obligations		16,834			14,095
Long-term finance lease obligations		69,688			56,274
	$	86,522		$	70,369
Weighted average remaining lease term:		(in months)			(in months)
Operating leases		51			50
Finance leases		37			35
Weighted average discount rate:
Operating leases		4.14	%		4.53	%
Finance leases		3.30	%		3.69	%

Schedule of supplemental cash flow and other information

	June 30, 2022		June 30, 2021
Cash paid for amounts included in measurement of liabilities:	(in thousands)
Operating cash flows from operating leases	$	214	$	71
Operating cash flows from finance leases		910		1,309
Financing cash flows from finance leases		12,290		5,888
Assets obtained in exchange for lease liabilities:
Operating leases	$	5,842	$	170
Finance leases		28,102		—

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EARNINGS (LOSS) PER SHARE (Tables)

6 Months Ended

Jun. 30, 2022

EARNINGS PER SHARE

Schedule of basic and diluted earnings per share

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Numerator:	(in thousands, except per share amounts)
Net income	$	3,199	$	4,193	$	16,310	$	7,790
Denominator:
Denominator for basic earnings per share – weighted average shares		8,876		8,806		8,904		8,826
Effect of dilutive securities:
Employee restricted stock and incentive stock options		111		141		158		150
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversion		8,987		8,947		9,062		8,976
Basic earnings per share	$	0.36	$	0.48	$	1.83	$	0.88
Diluted earnings per share	$	0.36	$	0.47	$	1.80	$	0.87
Weighted average anti-dilutive employee restricted stock and incentive stock options		301		114		238		126

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BASIS OF PRESENTATION (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
BASIS OF PRESENTATION
Increase or (decrease) in depreciation expense from a change in the tractor fleet salvage	$ (1.0)	$ (2.0)

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REVENUE RECOGNITION - Disaggregation of Revenue by Type (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Disaggregation of Revenue
Revenues	$ 202,130	$ 170,031	$ 403,193	$ 328,536
Contract assets	2,100		2,100		$ 1,600
Intersegment Eliminations
Disaggregation of Revenue
Revenues	(6,656)	(14,079)	(19,108)	(27,058)
Trucking
Disaggregation of Revenue
Revenues	122,404	105,102	238,433	207,878
Trucking | Operating Segments
Disaggregation of Revenue
Revenues	122,515	105,361	238,586	208,464
Trucking | Intersegment Eliminations
Disaggregation of Revenue
Revenues	(111)	(259)	(153)	(586)
USAT Logistics
Disaggregation of Revenue
Revenues	79,726	64,929	164,760	120,658
USAT Logistics | Operating Segments
Disaggregation of Revenue
Revenues	86,271	78,749	183,715	147,130
USAT Logistics | Intersegment Eliminations
Disaggregation of Revenue
Revenues	(6,545)	(13,820)	(18,955)	(26,472)
Freight
Disaggregation of Revenue
Revenues	161,523	149,371	334,583	290,244
Freight | Intersegment Eliminations
Disaggregation of Revenue
Revenues	(6,346)	(13,545)	(18,792)	(26,149)
Freight | Trucking | Operating Segments
Disaggregation of Revenue
Revenues	95,653	90,712	193,225	181,727
Freight | USAT Logistics | Operating Segments
Disaggregation of Revenue
Revenues	72,216	72,204	160,150	134,666
Fuel Surcharge
Disaggregation of Revenue
Revenues	35,890	17,073	60,548	31,315
Fuel Surcharge | Intersegment Eliminations
Disaggregation of Revenue
Revenues	(310)	(534)	(316)	(909)
Fuel Surcharge | Trucking | Operating Segments
Disaggregation of Revenue
Revenues	23,535	12,038	39,759	22,358
Fuel Surcharge | USAT Logistics | Operating Segments
Disaggregation of Revenue
Revenues	12,665	5,569	21,105	9,866
Accessorial
Disaggregation of Revenue
Revenues	4,717	3,587	8,062	6,977
Accessorial | Trucking | Operating Segments
Disaggregation of Revenue
Revenues	3,327	2,611	5,602	4,379
Accessorial | USAT Logistics | Operating Segments
Disaggregation of Revenue
Revenues	$ 1,390	$ 976	$ 2,460	$ 2,598

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SEGMENT REPORTING - Other (Details)	6 Months Ended
	Jun. 30, 2022 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, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Segment Reporting Information
Operating revenue	$ 202,130	$ 170,031	$ 403,193	$ 328,536
Operating income	5,852	6,929	24,535	12,975
Unallocated merger costs	2,132	0	2,132
Depreciation and amortization	8,986	9,163	17,010	18,733
Trucking
Segment Reporting Information
Operating revenue	122,404	105,102	238,433	207,878
USAT Logistics
Segment Reporting Information
Operating revenue	79,726	64,929	164,760	120,658
Operating Segments
Segment Reporting Information
Operating income	5,852	6,929	24,535	12,975
Unallocated merger costs	(2,132)		(2,132)
Depreciation and amortization	8,986	9,163	17,010	18,733
Operating Segments | Trucking
Segment Reporting Information
Operating revenue	122,515	105,361	238,586	208,464
Operating income	4,296	3,057	16,925	6,577
Depreciation and amortization	8,576	8,901	16,296	18,197
Operating Segments | USAT Logistics
Segment Reporting Information
Operating revenue	86,271	78,749	183,715	147,130
Operating income	3,688	3,872	9,742	6,398
Depreciation and amortization	410	262	714	536
Intersegment Eliminations
Segment Reporting Information
Operating revenue	(6,656)	(14,079)	(19,108)	(27,058)
Intersegment Eliminations | Trucking
Segment Reporting Information
Operating revenue	(111)	(259)	(153)	(586)
Intersegment Eliminations | USAT Logistics
Segment Reporting Information
Operating revenue	(6,545)	(13,820)	(18,955)	(26,472)
Foreign Countries | Operating Segments | Trucking
Segment Reporting Information
Operating revenue	$ 14,600	$ 10,000	$ 27,000	$ 18,900

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EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS (Details) - Omnibus Incentive Plan (the "Incentive Plan") - shares	1 Months Ended
	May 31, 2022	May 31, 2019	Jun. 30, 2022	May 31, 2017	May 31, 2014
Defined Benefit Plan Disclosure
Number of shares authorized (in shares)				500,000	500,000
Number of additional shares authorized (in shares)	250,000	500,000
Number of shares available for grant (in shares)			416,302

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ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
ACCRUED EXPENSES
Salaries, wages and employee benefits	$ 8,888	$ 7,318
Federal and state tax accruals	1,863	685
Other	3,639	2,003
Total accrued expenses	$ 14,390	$ 10,006

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DEBT - Summary of Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Feb. 01, 2022	Dec. 31, 2021	Apr. 20, 2020
Debt Instruments
Other	$ 56		$ 84
Total long-term debt, including current maturities	70,197		74,424
Less current maturities	(16,956)		(11,069)
Total long-term debt	53,241		63,355
Revolving credit agreement
Debt Instruments
Total long-term debt, including current maturities		$ 130,000	38,000	$ 170,000
Sale-leaseback finance obligations
Debt Instruments
Total long-term debt, including current maturities	28,906		32,739
Term Loans
Debt Instruments
Total long-term debt, including current maturities	39,473
Insurance premium financing
Debt Instruments
Total long-term debt, including current maturities	$ 1,762		$ 3,601

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DEBT - Other (Details) - USD ($) $ in Thousands				1 Months Ended		6 Months Ended	12 Months Ended
	Feb. 01, 2022	Apr. 20, 2020	Jan. 31, 2019	Jan. 31, 2022	Jan. 31, 2019	Jun. 30, 2022	Dec. 31, 2021	Jul. 31, 2022	Oct. 31, 2021
Debt Instruments
Long-term debt						$ 70,197	$ 74,424
Term of debt instrument				36 months
Cash collateral for borrowed securities								$ 6,700
Percentage of cash collateralized for letters of credit						105.00%
Collateralized restricted cash						$ 8,300
Periodic payment				$ 700
Proceeds from obligation under finance lease						41,974
Proceeds from capital sale leaseback							$ 24,500
Finance lease contract term							48 months
Sale leaseback transaction monthly payments							$ 500
Revolving Credit Facility
Debt Instruments
Long-term debt	$ 130,000	$ 170,000					38,000
Maximum increase available subject to lender approval	$ 60,000				$ 75,000
Fixed charge coverage ratio	1.0
Exercisable, incremental borrowing capacity	$ 20,000	$ 20,000
Term of debt instrument	5 years		5 years
Commitment fee percentage	0.25%	0.25%
Borrowing based threshold eligible accounts receivable (as a percent)	85.00%
Borrowing based threshold for eligible unbilled accounts receivable (as a percent)	85.00%
Borrowing base before additions of eligible revenue equipment	$ 17,500
Eligible revenue equipment (as a percent)	85.00%
Percentage of maximum revolver amount	10.00%	10.00%
Excess availability maximum revolver amount	$ 13,000
Closing excess availability of the maximum revolver amount	$ 130,000
Minimum excess availability percentage of maximum revolver amount		20.00%
Charges associated with write-off of unamortized debt issuance costs						300
Revolving Credit Facility | Minimum
Debt Instruments
Borrowing based threshold eligible investment grade accounts receivable (as a percent)	85.00%
Revolving 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	$ 25,000
Letter of credit sub-facility
Debt Instruments
Long-term debt	$ 15,000	$ 15,000
Letter of Credit
Debt Instruments
Collateral amount						7,900
Cash collateral for borrowed securities								$ 6,700
Long-term line of credit						7,900
Term Loans
Debt Instruments
Long-term debt				$ 42,000
Weighted average interest rate				3.20%
Term Loans | Minimum
Debt Instruments
Term of debt instrument				36 months
Term Loans | Maximum
Debt Instruments
Term of debt instrument				96 months
Base Rate | Revolving Credit Facility | Minimum | Period Through March, 31, 2022
Debt Instruments
Basis spread on variable rate (as a percent)	1.25%
Base Rate | Revolving Credit Facility | Maximum | Period Through March, 31, 2022
Debt Instruments
Basis spread on variable rate (as a percent)	1.75%
London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Minimum | Period Through March, 31, 2022 Thereafter
Debt Instruments
Basis spread on variable rate (as a percent)	0.25%
London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Maximum | Period Through March, 31, 2022 Thereafter
Debt Instruments
Basis spread on variable rate (as a percent)	0.75%
Insurance Premiums Financing Note
Debt Instruments
Long-term debt						$ 1,762	$ 3,601
Accrued Premium Insurance Payable									$ 5,500

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LEASES AND OTHER COMMITMENTS - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
LEASES AND OTHER COMMITMENTS
Operating lease costs	$ 2,224	$ 1,908	$ 4,254	$ 3,842
Finance lease costs:
Amortization of assets	4,134	2,782	7,277	6,796
Interest on lease liabilities	910	639	1,543	1,309
Total finance lease costs	5,044	3,421	8,820	8,105
Variable and short-term lease costs	413	703	911	1,286
Total lease costs	$ 7,681	$ 6,032	$ 13,985	$ 13,233

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LEASES AND OTHER COMMITMENTS - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Operating leases:
Operating leases - right of use assets	$ 25,450	$ 22,898
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Operating leases - right of use assets	Operating leases - right of use assets
Current operating lease obligations	$ 7,221	$ 6,679
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Current operating lease obligations	Current operating lease obligations
Long-term operating lease obligations	$ 18,665	$ 16,644
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Long-term operating lease obligations	Long-term operating lease obligations
Total operating lease liabilities	$ 25,886	$ 23,323
Operating Lease, Liability, Statement of Financial Position [Extensible List]	Current operating lease obligations, Long-term operating lease obligations	Current operating lease obligations, Long-term operating lease obligations
Finance leases and assets subject to sale leasebacks:
Property and equipment, at cost	$ 156,379	$ 137,736
Accumulated amortization	(51,436)	(47,699)
Property and equipment, net	104,943	90,037
Finance lease obligations:
Current finance lease obligations	$ 16,834	$ 14,095
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Current finance lease obligations	Current finance lease obligations
Long-term finance lease obligations	$ 69,688	$ 56,274
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Long-term finance lease obligations	Long-term finance lease obligations
Total finance lease obligations	$ 86,522	$ 70,369
Finance Lease, Liability, Statement of Financial Position [Extensible List]	Current finance lease obligations, Long-term finance lease obligations
Weighted average remaining lease term:
Operating leases	51 months	50 months
Finance leases	37 months	35 months
Weighted average discount rate:
Operating leases	4.14%	4.53%
Finance leases	3.30%	3.69%

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LEASES AND OTHER COMMITMENTS - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$ 214	$ 71
Operating cash flows from finance leases	910	1,309
Financing cash flows from finance leases	12,290	5,888
ROU assets obtained in exchange for lease liabilities:
Operating leases	5,842	$ 170
Finance leases	$ 28,102

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LEASES AND OTHER COMMITMENTS - Other (Details) $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($)
LEASES AND OTHER COMMITMENTS
Purchase commitment	$ 53.7
Noncancellable commitments for purchases of equipment	$ 13.3

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Federal income tax effects of:
Total income tax expense	$ 1,027	$ 1,673	$ 5,114	$ 3,036
Effective income tax rate reconciliation (as a percent)	24.30%	28.50%	23.90%	28.00%

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EARNINGS (LOSS) 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, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021
EARNINGS PER SHARE
Net income	$ 3,199	$ 13,111	$ 4,193	$ 3,597	$ 16,310	$ 7,790
Denominator:
Denominator for basic earnings per share - weighted average shares	8,876		8,806		8,904	8,826
Effect of dilutive securities:
Employee restricted stock and incentive stock options	111		141		158	150
Denominator for diluted earnings per share - adjusted weighted average shares and assumed conversion (in shares)	8,987		8,947		9,062	8,976
Basic earnings per share (in dollars per share)	$ 0.36		$ 0.48		$ 1.83	$ 0.88
Diluted earnings per share (in dollars per share)	$ 0.36		$ 0.47		$ 1.80	$ 0.87
Weighted average anti-dilutive employee restricted stock and incentive stock options (in shares)	301		114		238	126

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PROPOSED MERGER (Details) - USD ($)		3 Months Ended		6 Months Ended
	Jun. 23, 2022	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Share price		$ 0.01		$ 0.01	$ 0.01
Merger costs		$ 2,132,000	$ 0	$ 2,132,000
Merger Agreement [Member] | Schenker Inc Acquisition [Member]
Business Acquisition [Line Items]
Share price	$ 0.01
Conversion price	$ 31.72
Termination fees	$ 10,000,000
Merger costs		$ 2,100,000

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ASSET HELD FOR SALE (Details) - Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations [Member] - Property Located at Van Buren, Arkansas [Member] $ in Millions	Jun. 30, 2022 USD ($) a
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sale of land | a	25.5
Consideration	$ 3.2
Net book value	$ 1.2