Knight Transportation, Inc. (NYSE:KNX) (“Knight”), one of North
America’s largest and most diversified truckload transportation
companies, today announced that it has filed a presentation with the
Securities and Exchange Commission (“SEC”) in connection with its
proposal to acquire USA Truck, Inc. (NASDAQ:USAK). The presentation has
been filed with the SEC and is available at www.sec.gov.
The presentation is also available on the company’s website at http://investor.knighttrans.com/events.
Knight believes that USA Truck’s recent financial results demonstrate
only limited improvement and that its recent share price surge is
unsupported by either industry or company specific fundamentals.
Notably, on a sequential basis, USA Truck’s truckload segment Operating
Ratio remains above 100% and improved only modestly from 103.8% in the
second quarter of 2013 to 103.6% in the third quarter of 2013. Knight
continues to believe that USA Truck’s turnaround plan remains fraught
with significant execution risk and notes that USA Truck’s limited cash
flow generation has constrained its fleet investment, such that USA
Truck now operates one of the oldest fleets among its publicly traded
peer group, with an average tractor age of 2.5 years and average trailer
age of 6.4 years.
Knight continues to believe that its $9.00 per share, all-cash proposal
fully and fairly values USA Truck, especially in light of USA Truck’s
consistent underperformance, including nine consecutive quarters of
losses totaling approximately $30 million. Knight remains confident that
its premium proposal is significantly more attractive than USA Truck’s
standalone prospects, and Knight remains willing to modestly increase
the proposed purchase price if USA Truck can demonstrate value that has
not already been identified.
As previously announced on September 26, 2013, Knight proposed to
acquire all of the outstanding shares of USA Truck for $9.00 per share
in cash. The proposal represents a significant premium of approximately
39% to USA Truck’s closing price on September 25, 2013, the last trading
day prior to public announcement of Knight’s proposal; a premium of
approximately 50% to USA Truck’s average closing price for the ten
trading day period prior to Knight’s announcement; and a premium of
approximately 58% to USA Truck’s closing price on August 27, 2013, the
last trading day prior to Knight’s August 28, 2013, proposal letter to
USA Truck’s Board of Directors.
Evercore is acting as financial advisor to Knight and Fried, Frank,
Harris, Shriver & Jacobson LLP is acting as Knight’s legal advisor.
Forward-Looking Statements
Some statements set forth in this press release, including those
regarding Knight’s proposal to acquire USA Truck and the expected impact
of an acquisition of USA Truck on Knight and its financial results and
operations, contain forward-looking statements that are subject to
change. Statements including words such as “believe”, “expect”, or
similar words as well as statements in the future tense are
forward-looking statements. These forward-looking statements are subject
to risks and uncertainties that could cause actual events or actual
future results to differ materially from the expectations set forth in
the forward-looking statements. Some of the factors which could cause
results to differ materially from the expectations expressed in these
forward-looking statements include the following: the possibility that
an acquisition of USA Truck by Knight may not be completed; the risk
that, if the acquisition is completed, Knight may face difficulty or be
unable to enhance the performance of USA Truck’s operations or
successfully integrate USA Truck’s operations; and other factors
identified from time-to-time in Knight’s filings with the Securities and
Exchange Commission. All forward-looking statements in this press
release are qualified by these cautionary statements and are made only
as of the date of this news release.
Copyright Business Wire 2013