Annual report

Am I seeing this right? They lost more in 2012 than in 2011? I don't know. I'm a little worried about USA.

 

He's been bleeding for years now. Operating ratio 115% or something like that?

They won't survive unless they change and they can't seem to change. You'll notice in his report he uses groovy terms like " seated tractors" and "in-service" tractors. That doesn't make a sheet either.....tractors have notes and costs regardless of their status. He's too big and he's made too many mistakes like the intermodal debacle, a costly and dismal failure. You mentioned 19m to borrow, report says he has to maintain 18m liquidity. He can borrow 1m . Probably some type of covenant / agreement with prime lenders.

IMO he's toast without some hard changes done yesterday. Survivable numbers are there ($ 2750. wk gross / tractor ) but they are low. He still believes ( like Cliffy ) that length of haul will save him. It won't. Miles drive maint.,fuel and wages. Get the hub down and the others will follow. Maybe become a regional carrier or do a relay agreement with a partner.....have to see his lanes. Bottom line here is this isn't working.

It would be interesting to get into the mind of USA......it looks like they are locked into a typical corporate stereo type and can't get out. One of my favorites is the customer. " I can't lose one no matter if he pays me or not". I'll bet his collections are a mess and he's afraid to ask for his money....but still pulling for the shipper, thinking he'll get it eventually.

JMO but I believe I'd be proposing to Celedon while I could still speak........

 

It appears a turn is being made. Whether it is enough and quick enough remains to be seen.

With new institutional involvement one can only speculate to what capacity they are playing and their intent. But this does indicate genuine interest in USA is very present and value is being seen.

Drumroll, please........

 

There are at least two institutional holders (for which 5% or greater of outstanding shares are held) in recent months. I do not recall their names. These do not trade stock. This is an investment in one form or another - value, control, etc. I do not see vultures just yet but I do believe a growing interest is present. This can be good or bad. For the while, I will take it as a positive. It is better than being avoided like some histeric desease.

 

Ok, call me stupid, everyone does anyhow. But I just don't see the big picture of a take over. As far as assets go, there are only 3 terminals left, maybe 4 bcause I don't know if S. Holland is leased or owned, but I believe leased along with a bunch of run down trailers and some left over shop equipment and computers. The remaining terminals are leased and don't belong to USA anyway. All the tractors are leased. So where is the big value of a take over? Any company can go lease more tractors and easily get trailers in better shape.
Customer base? If the company fails the customers are up for grabs anyway.
Employees? Just wait... bet you can't find 300 employees that have been here 5 years or more.
High profits? Yeah right, we wouldn't be having this conversation.
So tell me what I'm missing....

 

Yea. I don't see any major contract that someone else would want either. I think they are flying by the seat of their pants.

 

No frog, not stupid....you just don't see the big picture...it's hidden. I can't see it either.

Customer base: no it's not up for grabs. Their accounts belong to USA and can be sold. The drivers can be sold along with their iron, leased or not. It can be taken over........but all this is chump change.

The investors came in because they saw value. We don't know what other holdings USA may have bought with cash...like land. Perhaps one of those terminals is sitting on a prime piece of RE ripe for RD. Dunno. Might have oil under it or USA owns some sort of rights.

Point is the investors are not stupid, they did due diligence, saw something and invested ..... and it certainly wasn't in on going operations. The value would appear to remain regardless of operations. They may have ungodly receivables on the street too. Hard to say.

The investors may be banking on a Celedon or other suitor play........... but I don't think so, there is something there that we can't see, perhaps a contract......

Remember the report too, he has to retain 18m liquidity by agreement, that's cash, stocks or other negotiable instruments that can be converted now so the investors are guaranteed 18m return if he folds tomorrow..........

Time will tell......and adding a new dude for more cash was not a good idea . They just appear to be their own worst enemy. When the ship is sinking we don't open more valves, we close them. But what do I know, Cliffy has the MBA.