This report contains 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. These statements generally may be identified by their use of terms or phrases such as "expects," "estimates," "anticipates," "projects," "believes," "plans," "intends," "may," "will," "should," "could," "potential," "continue," "future" and terms or phrases of similar substance. Forward-looking statements are based upon the current beliefs and expectations of our management and 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. Accordingly, actual results may differ from those set forth in the forward-looking statements. Readers should review and consider the factors that may affect future results and other disclosures by the Company in its press releases, Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Additional risks associated with our operations are discussed in our Annual Report on Form 10-K for the year ended December 31, 2011 under the heading "Risk Factors" in Item 1A of that report and updates, if any, to that information are included in Item 1A of Part II of this report. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this report might not occur.

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" and words of similar import refer to USA Truck, Inc. and its subsidiary.

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto and other financial information that appears elsewhere in this report.

Overview

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand USA Truck, Inc., our operations and our present business environment. MD&A is provided as a supplement to, and should be read in conjunction with, our 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:

Our Business - 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 our consolidated results of operations for the periods presented in our consolidated financial statements and a discussion of seasonality, the potential impact of inflation and fuel availability and cost.

Off-Balance Sheet Arrangements - a discussion of significant financial arrangements, if any, that are not reflected on our balance sheet.

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

Critical Accounting Estimates - a discussion of accounting policies that require critical judgment and estimates.

Our Business

We operate primarily in the for-hire truckload segment of the trucking industry. Customers in a variety of industries engage us to haul truckload quantities of freight, with the trailer we use to haul that freight being assigned exclusively to that customer's freight until delivery. Our business is classified into three operating and reportable segments: our Trucking operating segment consisting primarily of our General Freight and Dedicated Freight service offerings; our SCS operating segment consisting entirely of our freight brokerage service offering; and our rail Intermodal operating segment.

Substantially all of our base revenue from the three reportable segments is generated by transporting, or arranging for the transportation of, freight for customers and is predominantly affected by the rates per mile received from our customers and similar operating costs.

Our SCS and Intermodal operating segments are intended to provide services which complement our Trucking services, primarily to existing customers of our Trucking operating segment. A majority of the customers using our SCS and Intermodal services are also customers of our Trucking operating segment.

The following chart describes the base revenue of our three segments.

                                                   Trucking
                                Three Months Ended          Six Months Ended,
                                     June 30,                   June 30,
                                2012          2011         2012          2011
Base revenue (in thousands)     71,846       85,309       147,782       168,184
Percent of revenue                69.4 %       78.6 %        73.4 %        80.8 %

                                                    SCS
                                Three Months Ended         Six Months Ended,
                                     June 30,                  June 30,
                                2012          2011         2012         2011
Base revenue (in thousands)     26,253       17,871       43,848       29,439
Percent of revenue                25.4 %       16.5 %       21.8 %       14.1 %




                                                 Intermodal
                                Three Months Ended         Six Months Ended,
                                     June 30,                  June 30,
                                 2012         2011         2012         2011
Base revenue (in thousands)      5,421        5,294        9,712       10,503
Percent of revenue                 5.2 %        4.9 %        4.8 %        5.1 %

We generally charge customers for our services on a per-mile basis. The expenses which have a major impact on our profitability are the variable costs of transporting freight for our customers. The variable costs include fuel expense, insurance and claims and driver-related expenses, such as wages and benefits.

Trucking. Trucking includes the following primary service offerings provided to our customers:

· General Freight. Our General Freight service offering provides truckload freight services as a short- to medium-haul common carrier. We have provided General Freight services since our inception and we derive the largest portion of our revenue from these services.

· Dedicated Freight. Our Dedicated Freight service offering is a variation of our General Freight service, whereby we agree to make our equipment and drivers available to a specific customer for shipments over particular routes at specified times. In addition to serving specific customer needs, our Dedicated Freight service offering also aids in driver recruitment and retention.

Strategic Capacity Solutions. Our SCS operating segment consists entirely of our freight brokerage service offering which matches customer shipments with available equipment of authorized carriers and provides services that complement our Trucking operations. We provide these services primarily to our existing Trucking customers, many of whom prefer to rely on a single carrier, or a small group of carriers, to provide all their transportation needs. To date, a majority of the customers of SCS have also engaged us to provide services through one or more of our Trucking service offerings.

Intermodal. Our rail Intermodal service offering provides our customers cost savings over General Freight with a slightly slower transit speed, while allowing us to reposition our equipment.

Results of Operations

Executive Overview

USA Truck's net loss for the second quarter of 2012 narrowed compared to the past three sequential quarters. Bright spots included continued strong performance in our SCS segment, improved base revenue per manned tractor and lower fuel expense. Unfortunately, progress in these areas was hampered by lackluster performance in our Trucking segment where unmanned tractors and lack of network efficiency continued to diminish asset productivity.

In our SCS segment, total revenue grew by 36.4%, to $29.6 million, and operating income grew 11.2%, to $2.5 million, compared with the second quarter of 2011. An increase in purchased transportation expense pressured our gross margin, and our fixed costs rose faster than freight volumes as our continued growth necessitated the addition of branch offices. During the quarter ended June 30, 2012, total revenue from our intermodal operations decreased approximately 1.5% compared to the same period of the prior year. These two asset-light business units together produced over 28% of our total second quarter revenue.

Though our operational execution of manned tractors improved sequentially, our Trucking operations took a step backward compared to the same quarter of 2011 as average trucking revenue per tractor per week declined approximately 9.2%, to $2,546. Loaded revenue per mile increased for the first time in two quarters to $1.63 but remained 1.7% below last year's level. At 10.9%, our empty mile factor was the same in both the second quarter and the prior year's second quarter, but showed material improvement sequentially. Poor tractor utilization was the main inhibitor to performance.

Three primary factors negatively impacted our tractor utilization during the quarter. First, a less robust U.S. economy, particularly in manufacturing, depressed volumes. Freight demand was not too weak for carriers with established networks to operate profitably. However, given our present network, the depressed volumes hindered our efforts to optimize our freight mix as there was less opportunity to obtain better loads. While we are actively working to optimize our freight network, we expect it to take several months to show meaningful results.

Second, our operational execution has been disappointing. However, during the second quarter, we did show progress as evidenced by the improved revenue per manned truck per week. Additionally, to assist us in improving our operational execution, we have hired experienced key personnel and engaged industry consultants to analyze our processes and recommend improvements. Their main focus is to increase our percentage of tractors available for dispatch each day, to improve our freight planning efficiency, and to improve our freight mix.

Third, our unmanned tractor count averaged 12.2% for the quarter, driven by a challenging environment for hiring drivers and an inefficient network making it hard to retain them. The peak reached 14.1% of our fleet before a series of internal recruiting and retention initiatives began yielding results, reducing it to 11.7% at the end of the quarter. We continue to evaluate our options to remedy this problem.

At June 30, 2012, our outstanding debt, less cash, represented 50.9% of our balance sheet capitalization, compared to 47.4% at December 31, 2011. At June 30, 2012, we were not in compliance with all of the financial covenants contained in our revolving credit agreement. We paid a ten (10) basis points fee ($100,000) to obtain a waiver from our bank group for such non-compliance. Concurrently, we are negotiating a new five-year revolving credit facility with a different lender that will replace our current revolving credit agreement. If we are able to close the new facility, we anticipate it will afford us improved pricing and significantly greater financial flexibility. If we are unable to close the new facility by August 24, 2012, we will be charged an additional thirty (30) basis points fee ($300,000) for the extension of the waiver. Commencing September 7, 2012, and at various dates through October 31, 2012, we must take further steps to protect the interests of our existing lenders if the Credit Agreement is not refinanced by such dates.

Subsequent to June 30, 2012, we must continue to comply with our financial covenants. We do not believe that we will be in compliance with all of our covenants based upon our September 30, 2012 results. Because the waiver does not extend to financial covenants measured after June 30, 2012, and because we do not expect to be in compliance with the financial covenants based upon September 30, 2012 results, the amount due under the Credit Agreement has been classified as current in the accompanying consolidated balance sheet at June 30, 2012. If we do not refinance our current Credit Agreement prior to the next measurement of financial covenants and we are unable to comply with such covenants, we would intend to seek an additional waiver at such time. We cannot assure you that any such waiver would be granted.

For the six months ended June 30, 2012, we incurred net capital expenditures of approximately $19.9 million (including approximately $3.7 million relating to revenue equipment that we took possession of during 2011 but funded in 2012) and we anticipate our net capital expenditures to be approximately
$7.4 million for the remainder of 2012.

Three Months Ended June 30, 2012 Compared to Three Months Ended June 30, 2011

Results of Operations - Combined Services

Total base revenue decreased 4.6% to $103.5 million for the quarter ended June 30, 2012 from $108.5 million for the same quarter of 2011. We reported a net loss of $3.5 million ($0.34 per share) for the quarter ended June 30, 2012 as compared to net income of $0.6 million ($0.06 per share) for the comparable prior year period.

Our effective tax rate was 34.3% for the quarter ended June 30, 2012 compared to 57.8% for the same quarter of 2011. Income tax expense varies from the amount computed by applying the federal tax rate to income before income taxes primarily due to state income taxes, net of federal income tax effect, adjusted for permanent differences, the most significant of which is the effect of the per diem pay structure for drivers. Due to the partially nondeductible effect of per diem payments, our tax rate will vary in future periods based on fluctuations in earnings and in the number of drivers who elect to receive this pay structure.

Results of Operations - Trucking

Relationship of Certain Items to Base Revenue

The following table sets forth the percentage relationship of certain items to
base revenue of our Trucking operating segment for the periods indicated. Fuel
and fuel taxes are shown net of fuel surcharges.

                                             Three Months Ended
                                                  June 30,
                                              2012         2011
Base Trucking revenue                        100.0  %      100.0 %
Operating expenses and costs:
Salaries, wages and employee benefits         43.8          38.8
Depreciation and amortization                 15.4          14.5
Operations and maintenance                    13.6          11.4
Fuel and fuel taxes                           13.0          13.6
Purchased transportation                       7.0           8.8
Insurance and claims                           7.4           6.5
Operating taxes and licenses                   2.1           1.4
Communications and utilities                   1.3           1.2
Gain on disposal of revenue equipment, net   (1.0)         (1.6)
Other                                          6.2           5.3
Total operating expenses and costs           108.8          99.9
Operating (loss) income                      (8.8)  %        0.1 %




Key Operating Statistics:

                                              Three Months Ended
                                                   June 30,
                                              2012          2011
Operating loss (in thousands)              $ (6,324)     $     37
Total miles (in thousands) (1)                49,594       57,846
Empty mile factor (2)                           10.9 %       10.9 %
Weighted average number of tractors (3)        2,171        2,341
Average miles per tractor per period          22,844       24,710
Average miles per tractor per week             1,757        1,901
Average miles per trip (4)                       527          534
Base Trucking revenue per tractor per week $   2,546     $  2,803
Number of tractors at end of period (3)        2,182        2,354
Operating ratio (5)                            108.8 %       99.9 %

(1) Total miles include both loaded and empty miles.

(2) The empty mile factor is the number of miles traveled for which we are not typically compensated by any customer as a percent of total miles traveled.

(3) Tractors include Company-operated tractors in-service plus tractors operated by independent contractors.

(4) Average miles per trip are based upon loaded miles divided by the number of Trucking shipments.

(5) Operating ratio is based upon total operating expenses, net of fuel surcharge revenue, as a percentage of base revenue.

Our base Trucking revenue decreased 15.8% from $85.3 million to $71.8 million and our operating loss was $6.3 million compared to operating income of approximately $37,000 for the same quarter of 2011. The decrease in our base Trucking revenue resulted from our miles per tractor per period decreasing 7.6%, our loaded rate per mile decreasing 1.7% and our average tractor count decreasing by 7.3%.

Overall, our operating ratio deteriorated by 8.9 percentage points of base revenue to 108.8% from 99.9% as a result of the following factors:

· Salaries, wages and employee benefits expense increased by 5.0 percentage points of base Trucking revenue predominately due to a 15.8% reduction in Trucking base revenue, an increase in driver sign-on bonuses related to recruiting more qualified drivers and, as mentioned below, a decrease in the number of independent contractors. During the second quarter of 2012, we continued to see evidence of a tightening market of eligible drivers related to the continued impact of the Department of Transportation's ("DOT") Compliance, Safety, Accountability ("CSA") program, which was implemented in December 2010, accompanied by seasonal job alternatives for drivers that made driver retention more difficult. New hours-of-service rules being reviewed by the DOT, through the Federal Motor Carrier Safety Administration, may further reduce the pool of eligible drivers. In July 2012, we raised driver pay for new drivers with less than one year experience by over $0.02 per mile in order to retain and attract drivers. The measures that we have taken may continue to cause increases in driver related expenses that would increase salaries, wages and employee benefits. In addition to the above, medical payments made under the Company's employee benefits plan increased approximately $0.5 million, or 31.8% and our workers' compensation expense increased approximately $0.2 million, or 37.1%.

· Fuel and fuel taxes expense decreased 0.6 percentage points of base Trucking revenue. Contributing to this decrease, was a 4.4% decrease in fuel prices that was offset by a 30.7% decrease in our number of independent contractors, which increased the percentage of our fleet comprised of Company trucks, for which we bear the fuel expense. Fuel costs will continue to be affected in the future by price fluctuations, the terms and collectability of fuel surcharge revenue and the percentage of total miles driven by independent contractors.

· Purchased transportation expense, which is comprised of independent contractor compensation and fees paid to Mexican carriers decreased by 1.8 percentage points of base Trucking revenue. This decrease is primarily the result of the above mentioned decrease in the number of independent contractors from 153 to
106. Over the longer term, we expect our purchased transportation expense to increase if we achieve our long-term goal to grow our independent contractor fleet, but in the event that we are unable to recruit and retain independent contractors, this expense could continue to fall causing a corresponding increase in fuel and fuel taxes expense and salaries, wages and employee benefits expense.

· While the actual amount of depreciation and amortization expense decreased during the second quarter of 2012 compared to the second quarter of 2011, as a percentage of base Trucking revenue it increased 0.9 percentage points. During the quarter, we purchased 150 tractors and 100 trailers and disposed of 138 tractors, 110 trailers and miscellaneous other equipment. As our unmanned tractor count increased throughout the quarter, we delayed in-servicing some of the new equipment while selling some of the older equipment, which resulted in this decrease in depreciation and amortization expense. In addition, effective May 1, 2011, the Company changed the time period over which it depreciates its 2005 model year and newer trailers to 14 years from 10 years and it changed the amount of the salvage value to which those trailers are being depreciated from 25.0% of the original purchase price to $500. This change in estimate resulted in a reduction of depreciation expense on a pre-tax basis of approximately $0.6 million and on a net-of-tax basis of approximately $0.4 million ($0.03 per share) during the quarter. Although all of these resulted in a lower absolute dollar expense, it was not enough to offset the aforementioned reduction in revenue, which caused depreciation and amortization as a percentage of base Trucking revenue to increase. Depreciation and amortization expense may be affected in the future as equipment manufacturers change prices and if the prices of used equipment fluctuate.

· Operations and maintenance expense increased 2.2 percentage points of base Trucking revenue primarily due to a 6.9% increase in direct repair costs related to new engine emissions requirements mandated by the EPA, the higher mileage equipment remaining in our fleet and the increase in the cost of parts and tires. Our average tractor age as of June 30, 2012 was 28.7 months compared to 27.6 months at June 30, 2011, whereas our average trailer age was 74.6 months and 67.1 months, respectively. Operations and maintenance expense may increase in the future if we delay the purchase of new equipment and the age of our equipment continues to increase.

· Insurance and claims expense increased 0.9 percentage points of base Trucking revenue. While our accident frequencies continue to improve, during the quarter, we determined it was necessary to increase the reserves on some open claims. The continuing education of our drivers regarding accident prevention is assisting in reducing insurance and claims expense. If we are able to continue to successfully execute our safety initiatives, we would expect insurance and claims expense to continue to decrease over the long term, though remaining volatile from period-to-period.

· Other expenses increased 0.9 percentage points of base Trucking revenue as a result of increased driver recruiting expenses and an increase in professional services. Due in large part to a reduction in our miles per tractor per week, we experienced a 37% increase in driver turnover, which increased the percentage of unmanned trucks by 33.5%. In addition, the DOT's CSA program has increased the difficulty of recruiting qualified drivers as the demand for those highly qualified drivers has increased, while the program has simultaneously decreased the overall supply of drivers. While our driver recruiting costs have trended upward the past several quarters, we expect that most of these costs will subside upon reaching our goal of 4% unmanned tractors, but this could take several quarters to achieve given our current unmanned tractor count and the tight driver hiring market. In the event that we are unable to retain existing drivers or attract new drivers and drive down our unmanned tractor count in the future, we would expect other expenses to increase as a percentage of base Trucking revenue as a result of the increased recruiting costs. The increase in professional services is primarily related to additional consulting and legal fees.

· Gain on the disposal of equipment decreased 0.6 percentage points in the quarter ended June 30, 2012 as a result of fewer sales of our tractors and trailers. Despite the reduction in gains, the market for used equipment remains steady. If the used equipment market was to soften or we decided to keep our equipment for a longer period of time, gains on disposal of equipment could decrease.

Results of Operations - Strategic Capacity Solutions

The following table sets forth certain information relating to our SCS segment
for the periods indicated:

                                     Three Months Ended
                                          June 30,
                                   2012           2011
Total SCS revenue                $  37,500     $  25,720
Intercompany revenue               (7,938)       (4,055)
Net revenue                      $  29,562     $  21,665

Operating income (in thousands)  $   2,528     $   2,273
Gross margin (1)                      13.9 %        15.8 %

(1) Gross margin is calculated by taking total SCS revenue less purchased transportation and dividing that amount by total SCS revenue. This calculation includes intercompany revenue and expenses.

Net revenue from SCS increased 36.4% to $29.6 million from $21.7 million, while operating income increased 11.2% to $2.5 million from $2.3 million. This increase was primarily a result of the continued expansion of our SCS operations bringing the total number of branches to 13 at June 30, 2012. This increase was partially offset by a 12.5% decline in gross margin resulting primarily from an increase in purchased transportation costs caused by less capacity in the marketplace. If we are successful in continuing to build our SCS business, we would expect to see the percentage of our total revenue coming from SCS continue to grow. However, we recently experienced an increase in purchased transportation expense because our cost to secure capacity increased faster than the rates paid by our customers. Our gross margin from our SCS business may continue to decline if this condition persists.

Results of Operations - Intermodal Operations

The following table sets forth certain information relating to our Intermodal
operating segment for the periods indicated:

                                  Three Months Ended June 30,
                                   2012               2011
Total Intermodal revenue (1)    $     7,395        $     8,070
Intercompany revenue                  (198)              (759)
Net revenue                     $     7,197        $     7,311

Operating loss (in thousands)   $     (533)        $      (98)
Gross margin (2)                       17.5  %            11.4 %

(1) Includes fuel surcharge revenue.

(2) Gross margin is calculated by taking total Intermodal revenue less purchased transportation and dividing that amount by total Intermodal revenue. This calculation includes intercompany revenue and expenses.

. . .