Cliff's Announcement and Company Transition

Actually the proof is in the results. And you are right in that first sentence. I have searched a lot of the websites of the other companies (the ones making money) several of them have (bean counters) on their boards. I don't however see why you want to lash out at me. It actually don't take an expert in high finance to see this company is in serious trouble! I also will admit lots of trucking companies with experienced people with trucking backgrounds have failed and will continue to do so. I took note of the quarterlies article in last months The trucker newspaper, in this one USA Truck was not the only OTR company to post negative results. However the others had good reasons for the bad results and all but USA Truck are in good shape financially. The only difference between USA Truck and these other carriers is their boards and upper management! This leads me up to my final point. I am not an expert in any way. I said in a previous post here I don't fully understand some accounting terms. What I do is spend hours reading news articles as well as information provided on the websites of the other carriers. I also have 2 eyes and can put 2 and 2 together and come up with 4. Next time if you feel any of my comments are in error how about refuting them with facts and leave the broad wide sweeping stupid comments where they belong, on the stable floor because this is actually what they are full of!

 

Some of the people I know that run small trucking companies actually have a driving history. However I don't feel it's necessary to have a background as a driver to make a successful company executive. I think the most common trait is common sense, hard work and the (insider) knowledge to leverage your company assets in the most prudent way to maximize your earnings. Sometimes it's OK to use a credit line to purchase new equipment etc etc, but said debt has to be managed well and provided for. However you can't just keep borrowing and borrowing to cover operating deficits, especially when said deficits are caused by managerial ineptitude. You also don't have to have a PhD in nuclear physics to see this type of operation won't end well. Cliff Beckham according to every person I have talked to knew full dang well repositioning the company into a short haul/regional company was a serious risk. He was warned by his own operations staff it would not succeed given the company operating model. All he did according to reports is get rid of these people and report to the board the progress and tell them all was going to be OK. He kept clinging to this stupidity even in the face of the company's experienced drivers quitting in droves, and the tractor TBA % grew to just over 14%. Quarter after quarter the company financial reports were bad, and he just kept doing it till the company got into trouble with it's lender then he makes a mia culpa speech to the employees as reported by the OP. Now we are expected to believe this same person who wrecked the company will now change and be it's savior? Give me a break! Nobody wants this company to pull out of this more then I do! I just don't think the current board and management will make the hard decisions necessary to turn this company around. If that makes me a doomsayer so be it! If I see a car headed toward a cliff I know eventually it's going to go over said cliff if the car is not stopped. Thankfully I own no stock in this company. However I know several people that do, and it makes me almost want to cry when I think of the money these people might well lose in time, especially when said loses could have been avoided.

 

To Exrayman. You are well spoken. Debt is good when it is to expand into opportunities that you can't ignore as a company but currently don't have the capacity to enter on your own. Going into debt to stay afloat a little longer is not a good idea. Maybe Wells Fargo sees something we don't but this credit line is not fully accessible to USA without certain results and at anytime Wells Fargo can pull the funding. Im sure there is tons of fine print that did not legally need to be reported to us as investors such as when Wells Fargo can at will go in and seize "ALL" of the companies assets. Its just a matter of time.

 

I never lashed out or singled anyone out. I just feel as if it is alot easier to sit back and say this or say that as far as what a person is doing as CEO but there may be alot of key factors that none of you know about. And I will say this also, it may or may not be the case here but numbers do not allways tell the whole story and numbers do lie sometimes. It generaly takes time for stuff to start happening once changes are made.

USA may last a week, month, year, or forever. I dont know. I am also not some kind of loyal company man because as soon as I get my hazmat/tanker I am going elsewhere but that is besides the point. I will not allow myself to sit and speculate of stuff like this because there are to many things riding on the company to start throwing half educated logistics, figures, and opinions out there. I bet it is safe to say that there are more than a few with alot of their 401k's built up within this companies assets and in this day and age I would just assume root for any American based company to make it so that fellow workers dont lose thier ### like so many allready have in the past 4 years.

 

First of all being a publicly traded company the company is required BY LAW to provide all the reasons for loses. They can't just say things are bad and you don't know what battles we fight. All of my comments with one exception comes right out of the company reports. The exception is the comments about Cliff getting rid of people attempting to warn him about said changes, and I was clear about it being rumor. Also true reported numbers DO NOT LIE! these numbers tell of the financial condition of the company and it is a serious felony to misrepresent these numbers. (Ask the folks over at Enron and Worldcom about lying numbers). I would also ask you to please list the changes made since Cliff Beckham's mia culpa speech. I would love to call several of my friends there and tell them all is going to be OK now because they changed! Because all I have read and been told about is all talk. USA Truck has blew off so much business with this change over to a short haul/regional carrier I doubt they will get most of it back. In the OP post Cliff Beckham made a comment about dropping rates on long haul to get business back. This will work only till the other carriers decide to match said reductions or even go lower. USA Truck does not have the means to get into a rate war. USA Truck also has lost a lot of their brokers. Go check out some of the lawsuits USA Truck has lost over this screwing brokers over. At this point I do not see this company getting in the black with current management, and just wishing for things to get better is an exercise in futility. Time will not work in their favor till real changes are made!

 

Thats is probably true since they had that employee stock program. Everyone has lost a mint due to USAs shenanigans. Its not really that difficult. There a tested and tried way to run a trucking company. Its almost like a franchised business model. Trucking companies aren't trying to invent things or bring new products to market. Demand is already there. There is no such thing as a "trucking venture" these days. You have a truck and now you have to go find something to transport and there are many companies to choose from. So maybe you succeed in having something that no others have. But someone will eventually come along and duplicate your model. Competition is steep and the book on how to succeesfully run a trucking outfit was written decades ago. The biggest change came when Diesel prices sky rocketed. USA has leveraged all their assets they have nothing left as a company to put on the table. They better have one knock out plan in place to make it happen.

 

Right now I am waiting on a 2AM delivery in Atlanta then on to some home time. I have been reading some of the USA Truck 2010 Annual report. I have paid close attention to this message to the stockholders and noticed something interesting. I put it in bold! There it is in black and white. Here is where they admit to blowing off customers. I underlined the most important part, in it you can clearly see unless the freight was in their (network) they did not want to haul it. I remember clearly in one of the last quarterly releases Cliff Beckham was crying about their network was not the same as the other carriers and was the primary reason for the money loss. They can't have it both ways. I was told by 2 fleet managers as well as someone in risk management the load planners were under strict orders to direct some loads to brokers or simply not accept the business. It is my opinion this is where Cliff Beckham harmed the company and most likely will prove fatal.




To Our Stockholders:
We improved in 2010. We trimmed our net loss by approximately 54% or $0.38 per share. We improved free
cash flow (cash flow from operations less net cash used in investing activities) by $10.0 million and reduced our
balance sheet debt (net of cash) to 40.8% of our total capitalization at year-end. We continued to implement our
VEVA (Vision for Economic Value Added) plan and produced meaningful strategic progress:
x We grew our total SCS (Strategic Capacity Solutions) and Intermodal revenue by 134% to $57.2 million,
representing 12.4% of our total company revenue in 2010;
x We entered the container intermodal market in the summer of 2010 by taking possession of our own
private containers;
x We improved the density of our Spider Web freight network to 45% from 35% in 2009;
x We improved our base Trucking revenue per loaded mile to $1.524 from $1.448 in 2009, a 5.3% increase;
and
x We improved fleet velocity (number of times the fleet is loaded each week) by 10.6% to 3.24 times from
2.93 times in 2009.
Each of those accomplishments is core to our strategic plan, which is to reposition our Company from providing
primarily long-haul truckload service to providing multiple truckload services to our customers with a regional
focus for our truckload assets. Our plan is designed to offer customers what they desire in a pricing model
capable of earning returns in excess of our cost of capital while paving the way for long-term growth.
While we are pleased that our strategic plan is showing progress, we are certainly not pleased with the overall
results. Despite macroeconomic challenges, volatile oil prices, increasing regulatory burdens and cost pressures,
we expected better than a $0.32 per share loss.
In 2011, our strategic direction will remain unchanged. However, now that the heavy lifting of repositioning our
business model is essentially complete, we can devote more effort and attention to executing the new model.
Among the more significant efforts under way to bolster the execution of our model are the following:
x Improve our capabilities to onboard the right freight. Our goal is to add 1,000 loads per week to our
Spider Web freight network during this year's bid season, ramping up our Spider Web lane density
compliance to 60% by mid-year.
x Concentrate on the right customers with the right freight. We will be diligent in selecting customers,
focusing on those in the consumer staples sector with products that are not highly cyclical or seasonal,
who have large freight volumes in Spider Web lanes and who treat their carriers fairly. Our executive
team has visited more than 40 customers recently to personally discuss our strategy with them and to
ensure that our customer base is positioned to properly advance our strategic plan.
x Hire drivers living in more strategic locations. The shortening length-of-haul within our network
demands greater fleet velocity, which necessitates a more sophisticated approach to our driver hiring
practices. This year, we are targeting our driver hiring efforts in the specific geographic locations needed
to support our operations. We expect that doing so will lead to more consistent equipment availability,
which is necessary for more consistent revenue production, better customer service and greater driver
satisfaction.
x Implement technology to increase efficiency and reduce costs. We are implementing trailer tracking
technology to drive down costs and improve operational efficiency. The ability to track our trailers will
allow us to significantly reduce our trailer fleet size, while enabling us to know precisely where each
trailer is at any given moment and whether the trailer is loaded or empty.
x Continue to develop our personnel. With the massive organizational changes necessary to implement
VEVA now behind us, we will more fully engage all of our personnel through leadership development in
order to foster greater individual empowerment focused on achieving our targeted results.
We believe we are building a company capable of earning strong returns for the long-term, but the transition has
not been easy and challenges still lie ahead. Tradeoffs are made every day to balance the need for near-term
earnings without sacrificing the long-term strategic objectives of the Company. We know that everyone would
like to see bottom line results come faster, and we agree. You can rest assured that our expectations are for
another year of dramatically improved results in 2011.

 

I think the gun is empty, I believe they have fired their last bullet.

 

If there is one thing that Cliff is good at is rhetoric. He sure knows how to make his company sound like some large complex financial conglomerate. IT ISNT such a thing. None of these things or "improvements" as he calls them have equaled results. The SCS segment is not a significant outside source of revenue. USA truck itself is probably the biggest customer of its own broker leg. This is not real growth. This is something that everyone needs to realize on their own because Cliff sure isn't going to tell you himself. Its like if I own my store and I work there. I also buy products from this store with the money that Im paying my self from the revenue the store generates. They separate the two businesses simply for tax purposes. They may have a few outside customers but none that are big. JB hunt makes money and they are the largest. They set their rates and shippers ship with them because they know they have a good reputation. Cliff also has the who customer base ##### backwards. You don't choose your customers they choose you.

 

Dramatically improved results?? Cliff has to be the only person in the world that believes that statement.