LITTLE ROCK — USA Truck Inc. on Friday reported a net loss for the quarter ended Sept. 30, and said its board of directors unanimously declined meeting with Celadon Group of Indianapolis to discuss a possible merger.
Celadon, a similar-sized trucking company, owns about 6 percent of the Van Buren business’ outstanding stock, and in a recent filing with the U.S. Securities and Exchange Commission, said it had requested a meeting with USA Truck officials. A call to Celadon Group was not returned by press time.
USA Truck’s board met Wednesday, a little more than a week after news of the rumored merger drove up share prices by nearly 20 percent Oct. 11. Its share price has lost those gains since.
“The board believes the stock is trading well below its intrinsic value and it’s their fiduciary duty to try to improve operations and that’s their sole focus right now,” Jack Waldo, a transportation analyst with Stephens Inc. in Little Rock, said Friday when asked about USA’s response.
Waldo, whose company performs investment services for USA Truck, added that until the carrier’s stock is trading at a price that more resembles what the company is worth, it will be adverse to having discussions about a potential merger.
Shares on Friday rose 36 cents, or 4.57 percent, to $8.23 per share in the wake of the carrier’s third quarter performance. USA Truck shares have traded as high as $15.03 and as low as $6.75 over the past year.
As forecast in late August, USA Truck reported a loss of $4.31 million, or 42 cents a share, for the third quarter, compared with profit of $586,000, or 6 cents a share, in the third quarter of 2010.
About midway through the quarter the company said it would not be profitable because of software difficulties. On Friday it reported “completing its migration to its new operating software.”
The trucking company,founded in 1986, reported revenue of $130.14 million, a 9 percent increase compared with revenue of $118.77 million in the same year-ago period.
USA Truck said its base trucking revenue rose 7.2 percent; however, the gain was overcome by increasing expenses.
A soft freight market that gave the carrier fewer opportunities to replace expiring and unprofitable business also hurt revenue, Cliff Beckham, USA Truck’s president and chief executive officer, said in a news release.
“We felt a modest step down in overall freight demand in our markets, which we attribute to slower growth in the United States economy,” the news release said.
The carrier operated an average 2,342 trucks during the July through September period, an increase of three trucks compared with the fleet size in the same year ago quarter.
The company said that during the quarter it reduced its in-service fleet by 49 trucks and cut the number of new trucks on order for the second half of the year down to 155 from 250 trucks. That move is expected to yield $8 million in savings.
Other changes announced Friday include the size of its executive management team.
The carrier will count five members among the top ranks, down from nine at the beginning of the second quarter. Included is a realignment of duties falling to David Hartline, chief operating officer for trucking. Hartline joined USA Truck in August to help the carrier execute a business model based on shorter, more frequent deliveries.
USA Truck said Hartline’s previous experience with Heartland Express Inc. of North Liberty, Iowa, would be useful because Heartland Express has an industry reputation for quickly turning around freight.
“Despite the near-term disruptions we have experienced, we believe we have the right systems and leadership to drive future success,” the third-quarter news release said.
Business, Pages 33 on 10/22/2011