USA Truck Chief Executive Officer John Simone has taken a leave of absence after being diagnosed with a "serious medical condition," but executives insist his turnaround plan for the Van Buren-based company will not be altered.
Michael Borrows, USA Truck's chief financial officer, said the company will continue to press forward under the leadership of Thomas Glaser, who was appointed interim chief operating officer in Simone's absence. Glaser is a member of USA Truck's board of directors.
Borrows said USA Truck would not provide additional details on Simone's health at the CEO's request.
"Our hearts are heavy for John," said Borrows, who participated in a conference call with Glaser on Monday. "But John would want this not to be a distraction and would want the momentum to continue and focus on executing the business plan we've put together."
Simone, 53, has been key to USA Truck's turnaround since replacing Cliff Beckham as CEO in February 2013. The company fought off a takeover attempt by Knight Transportation two years ago and completed what Simone described during a February conference call as a "transformative year," reporting profits of $6 million in 2014 after losing $9.1 million in 2013.
Robert Peiser, who is chairman of the board, said in a statement that the board understands it is in Simone's "best interest at this time to focus on his health and recover from his illness." Borrows said there is no timetable established for Simone's return, but added there are no plans to conduct a search for an interim CEO or a full-time replacement.
"We have to wait and see," Borrows said. "It will just depend."
Simone's medical leave affected the company's stock Monday. USA Truck shares ended last week trading at $27.43 but fell as low as $24.80 after Simone's medical leave was announced Monday. USA Truck stock closed at $25.68.
Borrows acknowledged the dip "must be predominantly related to the news about John," although other transportation companies struggled Monday. Borrows was confident the drop "did not relate to our business plan at all" as it continues operations without Simone.
Glaser, 65, will be in his second stint as interim chief operating officer at USA Truck after serving in the role from January 2013 to June 2013. He was appointed to the USA Truck board in May at the request of Baker Street Capital Management and Stone House Capital Management, which formed the group United Shareholders for the Benefit of USA Truck.
Before working as an independent consultant in the trucking industry, Glaser was president and chief executive officer at Texas-based Arnold Transportation Services Inc. from January 2008 to March 2010.
Glaser also held a number of positions at Indianapolis-based Celadon Group Inc. from 2001-2007, including president and chief operating officer.
Peiser's statement said the company was "fortunate to have someone of Tom's talents and experience available." Borrows said Glaser's familiarity with USA Truck should help the transition.
"It's somebody that we know and somebody that we trust," Borrows said. "And somebody that is going to put the agenda of the company first."
Glaser will be paid $30,000 per month in his interim role, according to a filing with the Securities and Exchange Commission. The initial term of his agreement is three months but is subject to renewals and can be terminated by either party with two weeks' notice.
Glaser predicted that he would be much more involved in the company's day-to-day operations than he was as a member of the board, but he said he'll be working with a talented management team assembled by Simone. His primary role is making sure Simone's turnaround plan is being met.
"It's a very difficult and delicate time for us in general," said Glaser, who addressed the company Monday morning. "And it's difficult for me because, under the circumstances, I'd rather be at my home.
"But knowing what John has started here and what he's accomplished in the last two years, being able to help the management team, I'm excited about that. I'm grateful that I could do that and I'm glad that the board has shown the confidence in me to do that. But at the same time, I want to make sure I continue John's direction and help the team move that plan forward."
Business on 04/07/2015