INDIANAPOLIS ― USA Truck Inc refused to meet with larger rival Celadon Group to discuss a possible merger even as it reported a quarterly loss and announced a host of restructuring actions.
Earlier this month, Celadon reported a 6.29 percent stake in USA Truck and requested a meeting with the target company’s management to discuss a possible association.
In a statement on Friday, USA Truck said its board declined to meet with Celadon executives after considering recent management changes and the board’s desire to remain focused on increasing value through operational improvements.
Celadon Chief Executive Steve Russell told Reuters he was surprised by USA Truck’s decision and that his company will evaluate what to do next.
He declined to comment on whether the company would go directly to shareholders with an offer.
The top two shareholders of USA Truck are insiders Robert Powell and James Speed, who own about 10 percent each.
Powell and Speed were part of an investment group that bought USA Truck in the late 1980s from its then-parent Arkansas Best Corp.
USA Truck posted a third-quarter loss, hurt by soft freight volumes and a high number of unmanned tractors.
“Our business environment was softer than in the second quarter,” said its CEO Cliff Beckham. “We felt a modest step-down in overall freight demand in our markets, which we attribute to slower growth in the U.S. economy.”
The trucking company had warned of a weak third quarter late August, which prompted a sharp fall in its stock price.
The decline in USA Truck’s stock value was one of the reasons cited by Celadon when it expressed an interest in buying the company. It bought USA Truck shares at about 55 percent of USA Truck’s book value per share.
USA Truck, which has operations in the United States, Mexico and Canada, said it reduced its fleet size by 49 tractors on a low utilization rate.
The Arkansas-based company cuts its expected tractor purchases for the second half of 2011 to 155 from 250.
It has also reduced its executive management team to five members from nine at the beginning of the second quarter.
USA Truck shares fell as much as 6 percent to $7.38 on Friday on Nasdaq. Celadon rose 4 percent to $10.78.