Usa Truck Posts Q3 Loss, Rejects Celadon Meeting

After being approached for a merger, USA Truck’s management has decided to go the road alone, for now, despite posting a $4.3 million third quarter loss.

The Van Buren-based trucking firm was contacted earlier this month by Celadon Group, an Indiana-based trucking outfit that requested a meeting with USA Truck’s board to discuss a combining of forces. Celadon has a 6.3% stake in USA Truck shares.

In disclosing its third quarter financials, USA Truck CEO Clif Beckham said that his company’s board of directors considered Celadon’s request but felt changes it was making internally were in the better interest of the firm.

"Among other factors, the Board of Directors considered the recent management changes and the Board’s desire to remain focused on increasing value through operational improvements," Beckham said. "Accordingly, the Board of Directors unanimously decided to decline a meeting at this time."

In its most recent quarter ended Sept. 30, USA Truck recorded a $4.3 million loss on base revenue of $102.6 million. One year ago, the company recorded a profit of $600,000 on revenue of $100.8 million.

“The third quarter of 2011 presented several challenges.  These included a major operating system transition, softer than expected freight volumes, and a persistently high number of unmanned tractors.  We were unable to overcome these challenges and produce sufficient revenue to operate profitably.  We have addressed a number of the underlying problems, but we still have work to do in order to achieve sustained profitability," Beckham said.

USA Truck has made a number of internal changes, including hiring a new Chief Operating Officer and reducing its executive management team over the course of the quarter and the year.

“We are streamlining our management structure to improve accountability and speed of execution.  Our executive management team has been reduced from nine members at the beginning of the second quarter to seven members at the end of the second quarter, to five members today," Beckham disclosed.

"As part of this realignment, we are consolidating accountability for revenue production in our Trucking segment under a single executive officer.  On August 1, 2011, David B. Hartline joined the company as Chief Operating Officer for Trucking.  During mid-October, after stabilizing our fleet operations, he assumed direct responsibility for all sales, pricing and operations activities in our Trucking segment.  As part of this realignment, the corporate strategy department was eliminated, and management information systems and engineering, which formerly reported to the corporate strategy department, now report to the Chief Financial Officer," he said.