Officials with USA Truck announced Monday (Feb. 19) that John Simone, 51, will be the company’s new president and CEO, with former CEO Cliff Beckham, 41, to become the executive vice president and chief financial officer.
An executive shift has been long rumored for the financially struggling Van Buren-based trucking company. With approximately 500 employed at the corporate headquarters, the company’s future is a concern to many in the area.
Full-year financials released Jan. 31 showed a $17.54 million loss for 2012, marking four consecutive years of losses.
USA Truck posted a 2011 net income loss of $10.77 million, more than triple the loss during 2010 and in a year when other trucking companies began to see improved financials. Also, 2011 marked the third consecutive year of losses for USA Truck. In 2010, the company reported a loss of $3.308 million, and a $7.177 million loss in 2009.
USA Truck was forced in August 2012 to obtain a new line of credit during the third quarter of 2012 after violating covenant agreements with the previous credit arrangement. Poor national freight demand and missteps by USA Truck in implementing new software were factors leading to a string of financial losses for the long-haul carrier that has more than 2,184 tractors and approximately 3,000 employees.
The company announced in late December the addition of Thomas Glaser to the management team. Glaser, a former president and COO of Celadon Group who has 24 years of trucking industry experience, is the second attempt to bring experience into USA Truck operations.
According to the Monday statement from USA Truck, Simone has more than 30 years of operational and management experience in the transportation industry with leading companies that include UPS, Ryder, and Greatwide Logistics. Most recently, he was the CEO of LinkAmerica where he led a successful operational turnaround.
Simone said during a Monday afternoon phone interview that he does not expect problems with a management structure that has the former CEO reporting to him as the CFO.
“I’m extremely excited to have Cliff back in the CFO role,” Simone said. “Cliff and I complement each other very well.”
In a statement, Beckham said he was happy to return to his CFO role – a job he held with USA Truck between 2002 and 2007.
“I am excited to return to my historical role as CFO and provide strong financial, cost-control, and management support to John and the rest of the team. We are unified in our commitment to restoring USA Truck to industry-leading performance,” Beckham said.
USA Truck Board Chairman Robert Peiser noted in the statement that hiring Simone “is an important next step that we expect to accelerate the process” of turning the company around.
Simone, who said he plans to move to the area, said his top goal is to restore the company to profitability as soon as possible. He said he has not been asked to simply turnaround the financials to position the company for a sale.
“There has never been any conversation about selling the organization,” Simone said.
Simone and Beckham, who also participated in the phone conference, said details of Simone’s contract will be released later this week through U.S. Securities and Exchange filings. Neither would comment when asked if Simone’s contract included deadlines or a timetable for his tenure as CEO.
Returning the company to the black side of the ledger won’t be easy. Simone said he will work with company management and employees to formulate “a strategic assessment,” and he said Monday he plans to complete the assessment “within seven days.”
A strategy from the assessment will be given “clarity and focus” and communicated to all employees, Simone said, adding that he doesn’t foresee wholesale changes.
“I don’t have any plans to come in and turn the organization upside down,” he explained.
Based on numerous sources providing information to The City Wire, one thing that may need to be turned upside down are morale problems within the company – especially at the corporate headquarters. Those sources have shared similar stories of a “vindictive environment” and “humiliating public firings” in the corporate offices.
Simone did not deny morale problems exist within the company. He said his leadership style is to treat people with “dignity and respect,” and “creating trust internally and externally.” That method, Simone said, will help resolve conflicts.
“I don’t think turning the morale here is going to be a huge issue,” Simone said, adding that most employees see the potential of the company and are eager to be part of the turnaround effort.
Company shares (NASDAQ: USAK) closed Friday (Feb. 15) at $4.79. Markets were closed Monday. During the past 52 weeks, the share price has ranged from a $9 high to a $2.65 low.