Trucker puts two in group on board

Seats deserved, USA Truck says

VAN BUREN -- The collective strength of activist shareholders Baker Street Capital and Stone House Capital Management was enough to secure two positions on an expanded USA Truck board of directors on Thursday.

Baker Street managing partner Vadim Perelman and Thomas Glaser, a former interim chief operating officer at USA Truck, were named to the board in advance of the company's annual shareholders meeting. USA Truck's board will now operate with nine members, including Perelman and Glaser.

Both Glaser and Perelman were suggested to USA Truck by the Shareholders for the Benefit of USAK, which holds a 28 percent stake in the company. Travel delays kept them from attending the annual meeting, but both were expected in town for a board meeting.

The two men were added to the board despite the deadline for nominations expiring in March. Because of the nearly 3 million shares owned between Baker Street and Stone House, USA Truck said it felt compelled to listen and accommodate the request to expand its board.

"Between them they own 28 percent of the stock, and they wanted some voice in the room," USA Truck's board President Robert Peiser said. "It's hard to suggest a 28 percent stockholder, which is them as a group, does not deserve a voice. They own a lot of stock. There' s a big element of their fund in the stock. That's fine. It's easier to work with anybody if they're informed.

"I think they can really help us if they knew more."

Talks between USA Truck and individual members of the shareholders group date back to October 2013, when Stone House acquired 900,000 shares in a single purchase by Mark Cohen, Stone House's manager. Discussions among the company, Cohen and Perelman became more frequent and intense in the days after the May 6 formation of the shareholders' group.

Stone House disclosed in a February filing with the Securities and Exchange Commission that it had been in contact with USA Truck executives to discuss "operations, business, strategies and strategic direction." Conversations about USA Truck's brokerage business also were conducted, according to the filing, "given the accelerating pace of consolidation in the truckload and freight brokerage industries."

Company executives said earlier this month that they viewed Perelman and Cohen as friendly to USA Truck and not "a takeover attempt." After Friday's meeting, USA Truck CEO John Simone said he felt the new additions to the board would only improve the company as it continues an attempted financial turnaround.

USA Truck has reported losses for 11 consecutive quarters, though it improved its losses from $17.6 million in 2012 to $9.1 million in 2013. Operating income jumped $20 million last year, something the new board members indicated they would be able to further improve with a seat at the table.

"Our objectives align in terms of enhancing shareholder value," Simone said. "That's our responsibility, and they share those views."

In exchange for seats, the shareholders agreed to cast all of their votes for the re-elections of two existing board members. They also agreed to standstill provisions until 10 days prior to the 2015 meeting.

Peiser said having Perelman and Glaser could be beneficial in the right circumstances. Glaser has trucking experience, specifically with USA Truck, and Perelman is not a newcomer to serving on a board.

"They've got ideas," Peiser said. "They don't necessarily have ideas that are grounded in all the information that you have when you are on the board. We're always looking for smart people to help us. We're doing well. We can always do better.

"I've had enough conversations with Perelman to feel comfortable the relationship is going to be constructive," Peiser added. "He's been on other boards. We've talked to others. He's been constructive in the past before."

Little happened during the actual board meeting Friday. Official business was completed in less than 10 minutes, and the event was attended by about 30 people, including board members Terry Elliott, Robert Creager, Richard Beauchamp, William Hanna and James Simpson III. Hanna and Simpson were up for re-election at the annual meeting.

Perelman and Glaser issued a joint statement to announce their appointments to the board. They expressed their hope to continue improving the company's financial fortunes.

"Having met with the Company's management team and Board, we believe the greatest opportunity for maximizing shareholder value over the long term is the successful execution of the Company's standalone plan to restore USA Truck to a best-in-class, profitable truckload and logistics company," their statement read.

Shares of the company were trading below $7 before last year's USA Truck board of directors meeting. Stock closed at $16.19 Friday and has traded as high as $19.57. A major jump in the stock price occurred last fall when a takeover attempt by rival Knight Transportation of Phoenix became public.

Business on 05/24/2014

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