Judging from the agenda, there would appear to be little out of the ordinary planned for Friday’s USA Truck shareholders meeting.
No shareholder proposals are up for consideration, according to the company proxy statement. Stockholders are being asked to consider routine business in Van Buren ranging from the re-election of two board members to an advisory vote on executive compensation.
As the 2013 meeting and activity in the months leading up to this year’s gathering of stakeholders would suggest, however, the occasion could still be noteworthy as the company continues its financial turnaround.
A year ago the board’s chairman, Robert Peiser, briefly resigned his post and had to be reinstated by the board after too many votes for his election were withheld by shareholders. A shareholder advisory group recommended at the time that votes be withheld from Peiser in protest of decisions made by company leaders.
While USA Truck’s fortunes have improved since last year, it is still dealing with uncertainty among some owners of stock, after the formation of Shareholders for the Benefit of USA Truck. That group, which wields a 28 percent stake, was announced May 6. The trucking and transportation firm’s two largest shareholders make up the group.
USA Truck executives, who declined to be interviewed in advance of Friday’s meeting, have said they don’t consider the group to be the beginning of another takeover attempt.
Still, the collective voice of Stone House Capital Management and Baker Street Capital looms. The two investment firms own more than 2.95 million shares of USA Truck. While the group did not submit any shareholder proposals in advance of the meeting, Stone House, managed by Mark Cohen of New York, and Baker Street, managed by Vadim Perelman, have expressed an interest in speaking to executives about the direction of the company.
Reassuring investors and reiterating the successes generated by a turnaround plan would seem like the most likely message from company leaders to investors, Stephens Inc. analyst Brad Delco said.
“I’d only be guessing, but I’d think this is an opportunity to point out the things that USA Truck is working on,” Delco said. “There are a lot of balls being juggled behind the scenes.”
USA Truck’s five largest shareholders were quiet in the days leading up to the meeting.
Several attempts to reach Cohen and Perelman were unsuccessful. It is unknown if the two or representatives of their shareholders group or investment firms will be at the meeting.
Knight Transportation, which attempted an unsuccessful takeover of USA Truck in 2013, agreed earlier this year to a standstill agreement. It is unable to influence board elections or engage with any other shareholders who might be interested in a takeover.
A spokesman for Dimensional Fund Advisors LP of Austin, one of USA’s major shareholders, said the firm does not typically comment on its holdings. Very rarely would the company send a representative to a shareholders meeting and the spokesman said it was “unlikely” that one would attend Friday.
James Speed, a former USA executive and board member, declined to comment on the meeting or the company beyond saying, “I think they’re doing better.”
USA Truck has made incremental financial improvement since CEO John Simone was hired in February 2013. Last month the company reported a loss for an 11th straight quarter but improved its results from the same period in 2013. It trimmed its losses from $2.5 million to $1.6 million in the first quarter.
Under Simone’s leadership, the company cut its overall losses from $17.6 million in 2012 to $9.1 million in 2013. Measures implemented in the past year helped improve operating income at USA Truck by $20 million.
Despite the lack of a profit and the uncertainty that surrounds the formation of the shareholders group, Delco said USA Truck remains attractive to investors. The firm’s shares have traded between $5.28 and $19.57 over the past year.
Its stock ended trading Wednesday at $14.99 per share.
“I think investors see a lot of opportunity there,” Delco said. “I think those that are fairly realistic know that turning around a trucking operation does take a considerable amount of time. … It’s no easy task. I think John is aware of that and seems to have everything moving in the right direction.”
Business on 05/22/2014