USA Truck's top investors file to sell

USA Truck's largest shareholders are interested in selling up to two-thirds of their stock, according to a filing made Thursday.

USA Truck, Baker Street Capital and Stone House Capital Partners have agreed to register for the sale of up to 2 million shares of the company, according to a Securities and Exchange Commission filing. USA Truck Chairman Robert Peiser said the agreement came at the request of its largest stockholders, who combine to hold 2.95 million shares, or 28 percent ownership.

"It's not unusual for an investor to decide to sell some stock if they made a good profit on it," Peiser said. "I don't know how much they want to sell. That's going to be up to them. But they'd have a difficult time, as you must imagine, in a stock that trades with fairly low volume to get out of this stock unless the company cooperates by signing a registration statement and selling the stock for them. That's what we've agreed to do."

Stone House holds 1.55 million shares of USA Truck stock, which equates to 14.7 percent of the company's holdings. Baker Street owns 1.4 million shares, or 13.3 percent.

The two joined to form Shareholders for the Benefit of USAK in May, and USA Truck followed the group's suggestion by adding two additional members to its board of directors.

Vadim Perelman, who manages Baker Street, and Thomas Glaser, a former USA Truck executive, were named to the board in May. It added a third member, Gary Enzor, a few months later.

All three will be nominated for re-election to its board of directors, according to this week's agreement.

"They have been very constructive, and I think it has added to the sophistication and quality of our board," Peiser said. "I think it has helped us in the turnaround that we're pursuing."

Baker Street and Stone House, which is managed by Mark Cohen of New York, agreed to vote in accordance with the recommendations of USA Truck's board of directors at the company's annual meeting of stockholders the next two years. The agreement also stipulates that Perelman will resign from the board if Baker Street sells enough shares to drop its holdings in the company below 10 percent.

It's not known how many shares of stock each company has registered to sell.

Peiser declined to reveal the number Thursday, but he said each company has "indicated a desire to reduce some of their holdings." Cohen said Stone House will remain USA Truck's top shareholder.

"As USAK's share price has increased by almost 150 percent since we invested nearly a year and a half ago, portfolio management considerations have motivated our decision to ask USAK to register a portion of our shares giving us the flexibility to trim our holdings in the future," Cohen said in a news release.

Investor Adam Wyden, who is a managing member of ADW Capital in New York City, was optimistic about the registration Thursday. It's a change from August, when Wyden was critical of the company's leadership. ADW Capital owned nearly 3 percent of USA Truck at the time, and Wyden said it still owns a "sizable stake" in the company.

Wyden stressed that there's no guarantee the stock will be sold, but he said the registration of nearly 2 million shares should give USA Truck a chance to do "a little bit of a beauty pageant" to entice potential investors with its plans for the next few years. USA Truck stock closed trading at $30.74 per share Thursday. It was $14.85 a year ago.

"I think the turnaround is accelerating, not decelerating," Wyden said. "I think that the registration statement is really more a testament to the fact that the company has appreciated substantially in value since those two got involved. I don't think this statement says that these guys aren't bullish about the company."

USA Truck reported its ninth consecutive quarter of financial improvement earlier this month, with earnings of $4.2 million and earnings per share of 40 cents for the fourth quarter of 2014. Its earnings per share was the company's best in any quarter since 2005.

The company, which fought off a takeover attempt by Knight Transportation of Phoenix last year, lost $17.6 million in 2012 and $9.1 million in 2013 before reporting profits of $6 million in 2014 under CEO John Simone.

Peiser characterized this week's agreement as another step in "a return to normalcy" for the company.

"I think that's driven, in large part, by the turnaround that John has been able to accomplish to date," Peiser said. "We don't think that's over yet. I think we have some more improvement to come, but I think as that continues to happen the stock just becomes a more attractive investment."

Business on 02/27/2015

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