Knight: Pursuit of carrier ongoing

Knight Transportation Inc. remains interested in acquiring USA Truck, Chairman and Chief Executive Officer Kevin Knight said Wednesday.

Knight led off his company’s third-quarter earnings call by reiterating a desire to acquire its Van Buren-based rival. Some of USA Truck’s shareholders have expressed an interest in a merger and encouraged Knight to make the deal happen, the CEO said.

“We continue to believe that a combination of Knight and USA Truck would deliver enhanced value for, and is in the best interest of, all of Knight and USA Truck stakeholders,” Knight said. “Our company has a demonstrated history of operational excellence, spanning over 23 years, and we believe that together we could meaningfully increase the financial performance of USA Truck’s operations. Since making our proposal public, we have had discussions with several of USA Truck’s largest shareholders. They have indicated their support for our proposal and encouraged us to continue to take the necessary steps to acquire USA Truck. We hope that USA Truck will engage with us to discuss a transaction that is beneficial for both companies and all of our stakeholders.”

A USA Truck official said the company had no comment beyond its previously stated public position. USA Truck declined a $9 per share cash offer from Knight and filed a breach of contract lawsuit earlier this month in Crawford County Circuit Court.

Negotiations between the two companies have been ongoing for the past 20 months, according to the lawsuit. USA Truck rejected the latest offer, which included Knight assuming more than $140 million in debt, because it “substantially undervalues the company.”

USA Truck reported a $600,000 loss for its third quarter, which ended Sept. 30, compared to a $16.1 million loss in the third quarter of 2012. Revenue, without fuel surcharges, was up 13.5 percent to $113.9 million, according to results released last week.

Knight, which owns a 12.4 percent stake in USA Truck, reported net income of $15.1 million for the third quarter. That number is down 9.2 percent from the same period in 2012.

Quarterly revenue for Knight, headquartered in Phoenix, was up slightly at $239.3 million, a year-over year increase of 0.6 percent. Revenue for the first nine months of operation is $585.6 million, a 5.1 percent increase over the same period in 2012.

Knight Transportation also reported during the earnings call that it recently increased its line of credit from $150 million to $300 million.

“We believe this provides us opportunities,” Knight said.

Business, Pages 27 on 10/24/2013

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