Tom Glaser wasn’t ready to retire; he was retired.
But Glaser isn’t a man to sit still, so even at age 65 after a long career in the trucking industry, he couldn’t resist answering USA Truck’s call. Glaser, a member of the Van Buren company’s board of directors, stepped in as interim COO when CEO John Simone took a leave of absence.
Simone, whose turnaround plan had earned USA Truck its first profitable year in 2014 after five consecutive years of losses, stepped away in April to deal with lung cancer but was expected to return. Glaser, who had served as COO for nine months in 2013, agreed to head the company until Simone’s return.
On July 9, Simone resigned permanently to deal with his health, and Glaser was named president and CEO. Some retirement.
“John brought a real sense of accomplishment and had brought a management team in that had done very good work,” Glaser said. “John kick-started this thing. When you have somebody who had established himself in a very short period of time, it’s a tough act to follow.”
Glaser, in his first term as interim COO, has been part of the committee that hired Simone to replace Cliff Beckham as CEO in February 2013. Beckham reclaimed his previous position of CFO before resigning in September 2014.
Glaser had worked with Simone in the early months of his tenure as sort of an in-house utility consultant. He then stepped away to an expected retirement life in Florida.
His return to USA Truck in May 2014 could have been strained — “very dicey,” Glaser acknowledged — because he was handpicked by an activist shareholders group, United Shareholders for the Benefit of USAK, that had purchased 28 percent of USA Truck. The group wanted representation on the company’s board, and boards can be reluctant to accept members foisted upon them.
Glaser had been contacted by the group — made up of Baker Street Capital of Los Angeles and Stone House Capital of New York City — because its leaders were unfamiliar with trucking. Glaser had served as president and COO of Celadon Trucking Services Inc. from 2001-07 and as president and CEO of Arnold Transportation Services from 2008-10.
Glaser said he contacted Simone and Bob Peiser, USA Truck’s chairman, to make sure his appointment didn’t cause friction. As it turned out, his appointment was a blessing because he was ready to step in when Simone was diagnosed the next year.
“Stepping back in, I wasn’t hesitating at all,” Glaser said. “I had retired. John’s health — it’s a serious condition he has — and really the opportunity to help, I was more than happy to do that. The company is important to the community, it’s important to the people, and it’s important to continue what John started.”
Glaser said it helped immensely that he had been privy for a year to the intricacies of Simone’s turnaround plan as a member of the board of directors. When he ran the company during Simone’s leave of absence, he spoke with Simone about the progress, but now he is the unquestioned man in charge.
Changes in the Offing
That’s not to say he has any major renovations in mind. Glaser has enough miles to know that, in the trucking industry, no long-term plan lasts without tweaks and adjustments along the way.
“Once the title was [made permanent] and I became the front-row guy, it’s not so much changing John’s strategic plan but continuing on and improving the strategic plan he put in place,” Glaser said. “Am I changing some things? Yeah, there may be some things that are changing because the industry dictates it.”
One of Simone’s chief tactics was for USA Truck to reverse its reliance on newly graduated student drivers, a double-edged economic sword in trucking. Rookies cost less in pay, but their inexperience can lead to more accidents, poorer customer service and shorter employment.
That policy is in place, full bore, and the lack of available experienced drivers has forced USA Truck to reduce the number of its seated trucks. That has tied in well, actually, with USA Truck’s other main initiative: to contract its network of routes to those most efficient for the company’s bottom line and its drivers’ home time.
The network changes showed up on the company’s financials when USA Truck announced a significant drop in revenue in the second quarter of 2015. USA Truck had revenue of $133.5 million, down almost $20 million from the same quarter of 2014.
More important to Glaser, though, is that the company made money — $2.4 million compared with $722,000 in 2014 — because the streamlining of revenue also streamlined the waste. USA Truck has reported positive income figures for five consecutive quarters.
The modest second quarter, though, had Glaser worried a bit since the company was taking a step back in its operations. All part of USA Truck’s long-term plan to eventually facilitate growth from a place of strength — but investors can be a fickle lot when it comes to such nuances, especially from a company that has seen its turnaround guru leave.
It’s why Glaser has had many meetings with shareholders across the country since his full-time designation. His message: Trust the plan.
“We’re operating smarter,” Glaser said. “Our seated truck fleet has come way down as a result of [not hiring students]. Instead of just hiring a warm body to fill a seat, we’re doing it with some education behind it.
“By having a more defined geographic network, we are getting smarter about what lanes to run within that network. As we have downsized the fleet to take in more experienced drivers and run better routes to service the customer better, it gives us a strong base to grow from. That’s what we’re really focused on.”
‘Work Just Starting’
Glaser said his job at USA Truck is significantly easier because Simone was so successful in cleaning up operations and boosting the company’s morale, which years of struggle had ravaged. Now, the challenge is to make sure USA Truck doesn’t get complacent but keeps fighting to improve.
“It’s harder [now] only because the shareholders are expecting results quickly,” Glaser said. “Sometimes those results don’t come as quick as they would like to have them. It’s not just about growing the revenue. It’s about growing the revenue profitably and having a strong business.
“The work is just starting. It’s a tough industry with thin margins.”