USA Truck, which just two weeks ago reported a record quarterly loss, has announced a board shakeup and other efforts designed to stem the Van Buren company's financial bleeding and prevent a hostile takeover.
USA Truck (Nasdaq: USAK), which was trading at $2.92 per share at the market open Friday, has seen its share price decline by 62 percent since the first of the year. Just over a year ago, the company rebuffed an overture by trucking rival Celadon Group of Indianapolis to discuss a merger of the two companies. In its announcement of the changes after market close on Thursday, USA Truck said it was seeking an operations chief and had hired the former president and COO of Celadon Group, Thomas M. Glaser, as a consultant.
The company changes:
• Terry A. Elliott is stepping down as chairman of the board and is being succeeded by Robert A. Peiser, who joined the board in February and had been serving as vice chairman since August. Elliott will remain on the board and continue to head the audit committee.
Peiser has experience with troubled companies, including overseeing turnaround efforts. "Among his most notable successes in management positions was his role as Executive Vice President and CFO of Trans World Airlines, where he was credited with being the principal architect of that company's successful restructuring in 1995," USA Truck said in its Thursday night press release.
• Robert E. Creager, a former audit practice leader in the Houston office of PriceWaterhouseCoopers, has been appointed to the board to fill a previous vacancy and will become a member of the audit committee.
• The adoption of a shareholders' rights plan designed to protect the company and its shareholders from an unwanted takeover, though USA Truck said it wasn't aware of "any pending unsolicited takeover offer for the Company."
"The Rights Plan is designed to ensure that all USA Truck stockholders are treated fairly in the event of an unsolicited takeover attempt regarding the Company," USA Truck said. "It is not intended to prevent a takeover of the Company on terms that are fair to and in the best interests of stockholders.
"The Board believes it is appropriate to adopt the Rights Plan in light of the significant recent decline in the market price of the Company's common stock and the fact that the Company is in the process of implementing its turnaround plan."
Cliff Beckham, president and CEO, said in the company's statement:
"Our board and management have been working together closely for the past few quarters to design and set in motion a plan to bring material improvements to our operating results. We have made substantial progress on the capital resources front, closing in August a new $125 million credit facility that does not include financial covenants."
Beckham went on to cite the board changes and the company's "national search for an experienced operations executive," in addition to the hiring of Glaser.
Beckham said USA Truck expected the turnaround to manifest itself through 2013 and beyond.
Peiser, the new board chairman, said, "Despite the recent difficulties that the Company has experienced, I have a strong belief that we can execute a turnaround strategy that will bring increased value to our stockholders and increased opportunity for our employees."
In its third-quarter earnings statement, USA Truck reported a net loss of $6.1 million, or 59 cents per share, compared with a net loss of $4.3 million, or 42 cents per share for the year-ago quarter.
Revenue fell to $100.3 million for the third quarter compared with $102.6 million for third-quarter 2011.For the nine months ended Sept. 30, USA Truck lost $14.4 million, or $1.40 per share, compared with $6.4 million, or 62 cents per share, for the same period in 2011.
The shareholders rights' plan includes the following provisions:
• It will be in place for two years to give USA Truck time to implement its turnaround.
• Shareholders can end the plan at the company's 2014 annual meeting.
• The rights will become exercisable only if a person or group acquires 15 percent or more of the Company's common stock.
For more details, click here to read the company's Thursday statement.