Cliff's Announcement and Company Transition

(((The Revolver contains a minimum excess availability requirement equal to 15% of the maximum Revolver amount (currently $18.75 million) and an annual capital expenditure limit ($53.8 million for calendar year 2012, increasing to $71.0 million in 2013 and with further increases thereafter). There are no financial maintenance covenants.)))

If I have read this correctly the $18.75 million is the Minimum available to the company with the limit set at $53.8 in 2012 going up to $71.0 in 2013. Still a pathetic situation given all of the other OTR carriers are making money. I am getting hammered in facebook over my comments. The basic questions I am being asked is (what changes can be made)? My answer is get rid of Cliff Beckham and bring in somebody who knows the business inside and out, someone who is trusted in the industry and can make deals to get the company moving again. Stop taking anymore new tractors and trailers till the company can actually pay for them. I've said this before and will say it again! This board is dysfunctional, they seem to be forgetting they have a fiduciary responsibility to the stockholders AND a moral responsibility to their employees to run the company in a better way. It's a dang shame that if the company does go under ALL of them can't be brought up on criminal charges!

 

Yep there will be no warning. If they did give warning then everyone would quit and they would just go down sooner than they wanted. But really USA has been giving plenty of warning. They are struggling and in this industry things don't just turn around. There are more trucking companies than there are shippers so the shipper have the advantage to choose the right carrier that can reliably ship their freight. Budweiser honored USA truck as their carrier of the year and mentioned that they shipped over 22000 loads with USA. Its great but when you do the math you can see that they are actually a minority customer. Thats only 10 loads per year average for each tractor.

 

I would like to add something to my above comments. I try to avoid rumors and especially try to stay away from repeating innuendo. I have had conversations with some old timers with USA Truck over the last 18 months. Some tell me of the atmosphere in the upper management area starting just before the last CEO left his position leading up to a period just before David Hartline was hired. Several people over operations at the time tried in vain to get Cliff Beckham to reconsider some of his decisions to alter the way the company did business. They told him this would lead up to losing business. His reply was to start the process of removing said people and replacing them with his lackeys and sycophants. I don't know if any of this is true and I really did not want to repeat any of it here, but after thinking about it I decided to do so. After re-reading the original post in this thread I think Cliff Beckham now see's his primary mistakes, but I am left wondering if he will honestly make the tough (and getting tougher everyday) choices needed? It's clearly evident Cliff Beckham is a master of the company politics of getting ahead, but he lacks the good business sense to make USA Truck as a company get ahead.

 

I agree with you in whole man. If USA goes down I hope there isn't another trucking company out there stupid enough to bring him aboard.

 

This applies to any company actually. The only way you can protect yourself is to keep you eyes and ears open. Stay prepared. Keep enough funds on you to get home from anywhere in the country. I do it. I always keep money on me. You just never know when the bottom will fall out. Actually I think the USA Truck drivers will be OK, I don't see the company just going belly up. I think in time the board will sale the company. The stock price is in the tank and it makes the company a sitting duck for a determined and well financed company/person to take it over. The biggest losers in this situation will be the none drivers.

 

Hmm yahoo finance finally updated the Cash and debt for USA truck. 630 K in cash and just over 126 mil in debt. Compared to 4.3 mil in cash and 130 mil in debt last quarter. Looks like they used a good portion of cash to pay off a small amount of their debt. Will be interesting to see what happens. This is just the beginning of the end for USA truck. Whoever wants to think they will make go right ahead and keep living in a dream world.

 

I had some time this morning and I went into the USA Truck website and took a look at the bio's of the board members. As I studied these bio's something interesting occurred to me. Not one of these people have a trucking background. Of the 6 men listed only 2 seem to have a business orientated background and all but one are either CPAs or have Graduate degrees in finance. The director that recently retired off the board and was the CEO before Cliff Beckham ( I forget his name) I think did have trucking management experience. The inexperience of this board shows. If this company fails I think 100% of the blame should fall on them.

 

That has been my major beef with this company. Cliff himself came strait from learning about balance sheets to working for USA truck. Being able to manipulate the financial system is great if your a banker or a CPA for a "living". Honestly a person can work thier way through the ranks of a trucking company first as a driver and then to CEO and successfully run the company. There is a specific tested and tried way to run such a company. NO DEBT is essential. Not holding debt will get you through the hard times much easier. Cliff tried to turn the company into a short haul company because short haul generally has a higher profit margin than long haul frieght. However along with that the costs are also more. It then takes more loads to realize the same revenue. Thus the second facet is not to stray too far from the format that you have recently had success at. Trucking doesn't change overnight. So you can't just wake up one morning and decide you think you have a better way. I think as a young executive that Cliff is he finds himself being bored running things the same way all the time. He could literally take 6 months off work have the layout of how he wants things to run and it would all be running just fine when he got back. Trucking is that kind of industry. Although with the state of this company there is much more than should be day to day changes being made. Cliff is always having to find creative ways just to keep USA in business. Now all the companies assets are on the line so this is make it or break it. They have enough revs to turn a real profit but havn't done so since 2008 except for a single isolated quarter.

 

Being in any certain type of industry does not mean you can run it, just like not being in a certain type of industry means you will not be good at running it. And if you all are so good at large company finance and have such insite as to what needs to be done in a CEO posistion the why in the hell are you guys driving trucks for a living

 

And just because your not running a trucking company doesn't mean you wouldn't be good at it. Getting into a top position of company is more politics than anything which is something I will confess I am not good at. And yes I still contend that a person needs to know trucking in order to successfully run a trucking company and part of the way you come to understand trucking is by actually having driven a truck. Your drivers are your number one revenue generation. But they tend to be the ones that get the worst treatment. Without driver you don't have a business, without enough drivers your customers don't get served. USA would actually be making money if they didn't have the huge debt load. It was with Beckham that they acquired the debt they now have. It was his idea to get into so much debt. They didnt have hardly any debt before 2007.