Knight Transportation Profit Falls 9 Percent, Continues to Press USA Truck Deal

by Lance Turner  on Thursday, Oct. 24, 2013 9:59 am  

Knight Transportation of Scottsdale, Ariz., the company pushing to acquire USA Truck Inc. of Van Buren, on Wednesday reported third-quarter net income of $15.1 million, down 9 percent from the same time last year.

Quarterly earnings per share were 19 cents, down almost 10 percent from 21 cents in the same quarter last year. Still, revenue rose slightly, up 0.6 percent to $239 million.

Also Wednesday, Knight's chairman and CEO, Kevin P. Knight, reiterated his belief that a Knight takeover of USA Truck would be the best for USA Truck's shareholders.

"While we are disappointed that USA Truck has rejected our all cash premium proposal, we continue to believe that a combination of Knight and USA Truck would deliver enhanced value for and is in the best interest of all of Knight and USA Truck's stakeholders," he said during the third-quarter conference call with analysts. "Our company has a demonstrated history of operational excellence, spanning over 23 years, and we believe that together, we could meaningfully increase the financial performance of USA Truck's operations."

Knight revealed in September that it had offered USA Truck $9 per share in cash for the company in August. USA Truck rejected the offering, saying it undervalued the company. Knight then decided to take the offer straight to shareholders.

In all, Knight's takeover offer is worth $242 million, including an equity value of USA Truck at $95 million and $147 million in company debt. It said the $9 per share price represents a "significant premium" of about 39 percent to USA Truck's closing price the day before the offer was made public.

On Wednesday, Knight repeated previous statements that his company has had discussions "with several of USA Truck's largest shareholders" who have "indicated their support for our proposal and encouraged us to continue" to press an acquisition.

Knight said he hopes that USA Truck will talk to Knight about a deal "that is beneficial for both companies and all of our stakeholders."

Knight also repeated the company's response to USA Truck's lawsuit against Knight Transportation, filed Oct. 10, which alleges breach of contract. He said there is no merit to USA Truck's claims.

Knight said the company would not comment further on the proposal.

Last week, USA Truck reported a narrower third-quarter loss, $602,000, as revenue rose 13.5 percent to $141.8 million.



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