Knight Transportation Files Presentation Regarding Its Proposal for USA
Addresses USA Truck’s Unsupported Financial Results and Recent Share Price
PHOENIX -- November 4, 2013
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
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.
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.
Knight Transportation, Inc.
David A. Jackson, 602-606-6349
Adam Miller, 602-606-6349
Joele Frank, Wilkinson Brimmer Katcher
Matthew Sherman / Eric Brielmann / James Golden
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