by Lance Turner
Posted 10/17/2013 08:34 am
Updated 9 months ago
USA Truck Inc. of Van Buren on Thursday reported a narrower third-quarter loss, $602,000, as revenue rose 13.5 percent to $141.8 million.
The company (Nasdaq: USAK), which is the target of a takeover attempt by Knight Transportation of Scottsdale, Ariz., lost $6.1 million in the third quarter last year. It is has been working to turn around the company since last year.
"The continued, accelerating improvement in our results clearly illustrates the rapid progress we're making in our turnaround," USA Truck President and CEO John Simone said in a news release. "The third quarter of 2013 marked our fourth consecutive quarter of substantially improved operating and bottom-line results. Our increased cash flow enabled us to pay down debt for the first time since the fourth quarter of 2011.
"These achievements are even more impressive given the challenging conditions the truckload industry has been facing and the fact that our third quarter is usually seasonally weaker than our second."
The company reported increased revenue in its trucking and Strategic Capacity Solutions segments. Trucking revenue reached $81.7 million, up nearly 14 percent from $71.9 million in the same quarter last year.
SCS revenue reached $32.0 million, up 13 percent from $71.9 million in the same quarter last year. Simone said the asset-light segment accounts for 28 percent of consolidated base revenue and is "helping to strengthen and diversify our business model ..."
"With meaningful opportunities for improvement in several areas of our business, including insurance and claims, maintenance costs and tractor utilization, we expect to continue to show significantly improved quarter-over-quarter results in the fourth quarter irrespective of industry conditions and seasonality," Simone said.
Talk of improvement and turnaround comes as Knight Transportation continues to acquire USA Truck shares and make a public case for purchasing the struggling company.
On Wednesday, Knight revealed in a filing with the U.S. Securities and Exchange Commission that it had once again increased its stake in USA Truck, taking its ownership of USA Truck shares to more than 1.3 million for a 12.4 percent stake in the firm. Knight has increased its stake in the company from 8 percent since publicly announcing its takeover offer in September.
USA Truck has said it rejected Knight's takeover offer of $9 per share because it "substantially undervalued" the company. USA Truck has also filed a lawsuit against Knight claiming breach of contract and asking that the company forfeit the USA Truck shares Knight has purchased.
Knight has denied the lawsuit's allegations. In a statement, it said its takeover proposal was based on "an extensive analysis" performed on "the company's publicly disclosed information."
"Given that our all-cash premium proposal delivers value that is superior, immediate and more certain than USA Truck's risky stand-alone plan, we believe USA Truck's board should withdraw its lawsuit," Knight said.
Knight's USA Truck holdings are quickly approaching 15 percent, where USA Truck's "poison pill" shareholders' rights plan, adopted last year, will take effect.
Under the plan, if a company crosses the 15 percent ownership threshold, other USA Truck shareholders will be able to purchase an additional $24 worth of USA Truck shares at a 50 percent discount.
USA Truck has said the plan is designed to protect the company and its shareholders from an unwanted takeover.