0000895345-13-000233.txt : 20130926 0000895345-13-000233.hdr.sgml : 20130926 20130926080125 ACCESSION NUMBER: 0000895345-13-000233 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20130926 DATE AS OF CHANGE: 20130926 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: USA TRUCK INC CENTRAL INDEX KEY: 0000883945 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 710556971 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-43312 FILM NUMBER: 131115686 BUSINESS ADDRESS: STREET 1: 3200 INDUSTRIAL PARK ROAD CITY: VAN BUREN STATE: AR ZIP: 72956 BUSINESS PHONE: 479-471-2500 MAIL ADDRESS: STREET 1: 3200 INDUSTRIAL PARK ROAD CITY: VAN BUREN STATE: AR ZIP: 72956 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KNIGHT TRANSPORTATION INC CENTRAL INDEX KEY: 0000929452 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 860649974 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 5601 W BUCKEYE RD CITY: PHOENIX STATE: AZ ZIP: 85043 BUSINESS PHONE: 6022692000 MAIL ADDRESS: STREET 1: 5601 W BUCKEYE RD CITY: PHOENIX STATE: AZ ZIP: 85043 SC 13D 1 pr13d-usatruck_knight.htm pr13d-usatruck_knight.htm
 
 
 

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 13D
 
Under the Securities Exchange Act of 1934

 
 
USA Truck, Inc.

(Name of Issuer)
 
Common Stock, par value $0.01

(Title of Class of Securities)
 
902925106

(CUSIP Number)
 
Todd F. Carlson, Esq.
General Counsel
Knight Transportation, Inc.
5601 West Buckeye Road
Phoenix, Arizona 85043

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
 
September 18, 2013

(Date of Event which Requires Filing of this Statement)
 
 
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. 
 
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
 
* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
 
The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
 

 
 
CUSIP No. 902925106
 
13D
 
Page 2 of 4 Pages
         

         
1.
 
NAMES OF REPORTING PERSONS
Knight Capital Growth LLC
 
   
2.
 
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(see instructions)
(a)    o
(b)    o
   
3.
 
SEC USE ONLY
 
   
4.
 
SOURCE OF FUNDS (see instructions)
 
AF
   
5.
 
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)     o
 
   
6.
 
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Arizona
   
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
 
7.
 
SOLE VOTING POWER
 
0
 
8.
 
SHARED VOTING POWER
 
829,946
 
9.
 
SOLE DISPOSITIVE POWER
 
0
 
10.
 
SHARED DISPOSITIVE POWER
 
829,946
         
11.
 
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
829,946
   
12.
 
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
(see instructions)    o
   
13.
 
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
7.9%
   
14.
 
TYPE OF REPORTING PERSON (see instructions)
 
OO
   
 
 
 

 
 
CUSIP No. 902925106
 
13D
 
Page 2 of 4 Pages
         

         
1.
 
NAMES OF REPORTING PERSONS
Knight Transportation, Inc.
 
   
2.
 
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(see instructions)
(a)    o
(b)    o
   
3.
 
SEC USE ONLY
 
   
4.
 
SOURCE OF FUNDS (see instructions)
 
WC
   
5.
 
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)     o
 
   
6.
 
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Arizona
   
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
 
7.
 
SOLE VOTING POWER
 
0
 
8.
 
SHARED VOTING POWER
 
829,946
 
9.
 
SOLE DISPOSITIVE POWER
 
0
 
10.
 
SHARED DISPOSITIVE POWER
 
829,946
11.
 
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
829,946
   
12.
 
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
(see instructions)    o
   
13.
 
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
7.9%
   
14.
 
TYPE OF REPORTING PERSON (see instructions)
 
CO, HC
   
 
 
 

 
 
         
   
13D
 
Page 3 of 4 Pages
         
         
 
Item 1.  Security and Issuer.
 
 This statement relates to the shares of common stock, par value $0.01 per share (the “Shares”), issued by USA Truck, Inc. (the “Issuer” or “USA Truck”). The address of the principal executive offices of the Issuer is 3200 Industrial Park Road, Van Buren, Arkansas.
 
Item 2.  Identity and Background.
 
The persons filing this statement are Knight Transportation, Inc. (“Knight Transportation”) and Knight Capital Growth LLC (“Knight Capital”, together with Knight Transportation, the “Reporting Persons”). The principal place of business of each of the Reporting Persons is 5601 West Buckeye Road, Phoenix, Arizona.
 
Knight Transportation is the managing and sole member of Knight Capital. Knight Transportation is primarily engaged in the business of providing truckload transportation services.
 
Knight Capital is primarily engaged in the business of holding investments.
 
The name, citizenship, present principal occupation or employment and business address of each director and executive officer of each of the Reporting Persons are set forth in Schedule A attached hereto.
 
None of the Reporting Persons nor the managing member or executive officers of the Reporting Persons, has, during the past five years, (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting, or mandating activities subject to, Federal or State securities laws or a finding of any violation with respect to such laws.
 
Item 3.  Source or Amount of Funds or Other Consideration.
 
The aggregate purchase price of the Shares purchased by the Reporting Persons was approximately $5,809,622. The source of funding for the purchases of these Shares was the general working capital of Knight Transportation.
 
Item 4.  Purpose of Transaction.
 
Based on its evaluation of public information and knowledge of the trucking industry, Knight Transportation believes there is a compelling strategic rationale for a combination with USA Truck.    Accordingly, Knight Transportation has at various times evaluated the possibility of a combination with USA Truck and communicated to USA Truck several proposals for a transaction, all of which were rejected by USA Truck.   On August 28, 2013, Knight Transportation submitted to USA Truck a written proposal to acquire all of the outstanding Shares for $9.00 per share in cash.  On September 6, 2013, USA Truck’s Board of Directors rejected Knight Transportation’s August 28, 2013 proposal as inadequate and indicated that “the Company is not for sale.”   In light of USA Truck’s negative response, Knight Transportation communicated to USA Truck that Knight Transportation saw no merit in engaging in discussions directly with USA Truck management.       A copy of Knight Transportation’s written proposal is filed herewith as Exhibit 2 and is incorporated by reference into this Item 4.
 
Notwithstanding USA Truck’s rejection of its proposal, Knight Transportation believes that USA Truck stockholders will find its $9.00 per share proposal to be very attractive. Accordingly, Knight Transportation decided to publicly disclose its proposal by issuing the press release that is filed herewith as Exhibit 3 and is incorporated by reference into this Item 4.
 
The Reporting Persons decided to purchase Shares as part of its effort to pursue an acquisition of USA Truck.   In furtherance of this effort, Knight Transportation will seek to engage in discussions with the management and board of directors of USA Truck, other stockholders and other persons regarding the possibility of a potential acquisition of USA Truck on the basis of Knight Transportation’s August 28, 2013 proposal.  Knight Transportation may also purchase additional Shares in the open market or through private transactions.
 
Item 5.  Interest in Securities of the Issuer.
 
The following sets forth, as of September 26, 2013, the aggregate number and percentage of Shares beneficially owned by each of the Reporting Persons, as well as the number of Shares as to which each Reporting Person has the sole power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or to direct the disposition of as of September 26, 2013.

Reporting Person
Amount Beneficially Owned (1)
Percent of Class (2)
Sole Power to Vote or Direct the Vote
Shared Power to Vote or to Direct the Vote
Sole Power to Dispose or to Direct the Disposition of
Shared Power to Dispose or to Direct the Disposition of
Knight Transportation
829,946
7.9%
0
829,946
0
829,946
             
Knight Capital
829,946
7.9%
0
829,946
0
829,946
 
(1)  
Knight Capital is the direct owner of 829,946 Shares and Knight Transportation is the sole member and owner of all of the outstanding equity interests of Knight Capital
 
(2)  
Based on 10,544,106 Shares outstanding as of August 2, 2013, as reported on the Issuer’s Quarterly Report on Form 10-Q for the period ended June 30, 2013, filed by the Issuer on August 14, 2013
 
The following table sets forth all transactions with respect to Shares effected during the past sixty (60) days by any of the Reporting Persons through September 26, 2013. Except as otherwise noted below, all such transactions were purchases of Shares, and the table includes commissions paid in per Share prices.
 
Name of Reporting Person
Date of Transaction
Type of Transaction
Amount of Shares
Price Per Share
 
           
Knight Capital
9/18/2013
Private
829,946
$7.00
 
 
Item 6.  Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
 
 As of the date of this Schedule 13D, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.
 
Item 7.  Material to Be Filed as Exhibits.
 
99.1  
Joint Filing Agreement, dated as of September 26, 2013, by and between Knight Transportation and Knight Capital
 
99.2  
Proposal letter, dated August 28, 2013, from Knight Transportation to the Board of Directors of USA Truck
 
99.3  
Press Release, dated September 26, 2013, issued by Knight Transportation
 
 
 

 
 
         
   
13D
 
Page 4 of 4 Pages
         
 
SIGNATURE
 
 
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
 
September 26, 2013
 
  KNIGHT TRANSPORTATION, INC.  
       
 
    /s/ Kevin P. Knight  
   Name:  Kevin P. Knight  
   Title:    Chief Executive Officer  
       
 
  KNIGHT CAPITAL GROWTH LLC  
       
 
    /s/ Kevin P. Knight  
   Name:  Kevin P. Knight  
   Title:    Chief Executive Officer  
       
 
 
 

 
 
EXHIBIT INDEX
 
Exhibit Number
Description
   
99.1
Joint Filing Agreement, dated as of September 26, 2013, by and between Knight Transportation and Knight Capital
   
99.2
Proposal letter, dated August 28, 2013, from Knight Transportation to the Board of Directors of USA Truck
   
99.3
Press Release, dated September 26, 2013, issued by Knight Transportation
 
 
 

 
 
SCHEDULE A

DIRECTORS AND EXECUTIVE OFFICERS OF THE REPORTING PERSONS

The following sets forth the name, position, and principal occupation of each director and executive officer of each of the Reporting Persons. Each such person is a citizen of the United States of America. Except as otherwise indicated, the business address of each director and officer is c/o Knight Transportation, Inc. 5601 West Buckeye Road, Phoenix, Arizona. To the best of the Reporting Persons' knowledge, except as set forth in this statement on Schedule 13D, none of the directors or executive officers of the Reporting Persons own any Shares.

Knight Transportation
     
Name
 
Position at Knight Transportation
Principal Occupation or Employment
Kevin P. Knight
 
Chairman of the Board and Chief Executive Officer
Chairman of the Board and Chief Executive Officer, Knight Transportation
Gary J. Knight
 
Vice Chairman of the Board
Vice Chairman of the Board, Knight Transportation
Randy Knight
 
Vice Chairman of the Board
Vice Chairman of the Board, Knight Transportation
Donald A. Bliss
 
Director
Retired; Director, the Western and Southern Life Insurance Company and The Biltmore Bank of Arizona
Michael Garnreiter
 
Director
Vice President of Finance and Treasurer, Shamrock Foods Company
Richard C. Kraemer
 
Director
President, Chartwell Capital, Inc.
Richard J. Lehmann
 
Director
Founding Principal, Director and Chairman, The Biltmore Bank of Arizona
G.D. Madden
 
Director
President, Madden Partners
Kathryn L. Munro
 
Director
Principal, BridgeWest, LLC
Keith T. Knight
 
Chief Operating Officer
Chief Operating Officer, Knight Transportation
David A. Jackson
 
President
President, Knight Transportation
Adam Miller
 
Chief Financial Officer, Secretary, and Treasurer
Chief Financial Officer, Secretary, and Treasurer of Knight Transportation
Kevin Quast
 
Executive Vice President and Chief Operations Officer
Executive Vice President and Chief Operations Officer, Knight Transportation
James E. Updike, Jr.
 
Executive Vice President of Sales and Marketing
Executive Vice President of Sales and Marketing, Knight Transportation
   
Knight Capital
     
Name
 
Position at Knight Capital
Principal Occupation or Employment
Kevin P. Knight
 
Chief Executive Officer
Chairman of the Board and Chief Executive Officer, Knight Transportation
Gary J. Knight
 
President
Vice Chairman of the Board, Knight Transportation
Keith T. Knight
 
Chief Operating Officer
Chief Operating Officer, Knight Transportation
David A. Jackson
 
Secretary & Treasurer
President, Knight Transportation


 
EX-99.1 2 pr13dex99_1.htm pr13dex99_1.htm
 
 
Exhibit 99.1
 
 
 
JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the Shares of USA Truck, Inc. and further agree that this Joint Filing Agreement be included as an Exhibit to such joint filings.

1.  
Knight Transportation, Inc.
2.  
Knight Capital Growth LLC

In evidence thereof, the undersigned, being duly authorized, have executed this Joint Filing Agreement this 26th day of September, 2013.

 
Knight Transportation, Inc.
 
by:
/s/ Kevin P. Knight
 
Name:
Kevin P. Knight
 
Title:
Chief Executive Officer
     
 
 
Knight Capital Growth LLC
 
by:
/s/ Kevin P. Knight
 
Name:
Kevin P. Knight
 
Title:
Chief Executive Officer

EX-99.2 3 pr13dex99_2.htm pr13dex99_2.htm
 
 
 
Exhibit 99.2
 
 
[KNIGHT TRANSPORTATION LETTERHEAD]
 
 
August 28, 2013
 
Board of Directors
USA Truck, Inc.
3200 Industrial Park Road
Van Buren, AR 72956
Attn: Robert A. Peiser
 
Gentlemen:
 
As you know, Knight Transportation, Inc. (“Knight”, “we”, “our”, or “us”) has invested significant time and effort to advance a Knight / USA Truck combination.  We are writing this letter to share our frustration with USA Truck’s unwillingness to constructively engage with us regarding our interest in a transaction while at the same time communicating directly to the Board of USA Truck the significant value we would propose to pay for the USA Truck shares as well as our rationale for a combination.
 
Based on an extensive analysis we have performed of the Company’s publicly disclosed information, at this time we are prepared to acquire all of the outstanding shares of common stock of USA Truck for an all-cash purchase price of $9.00 per share.  This proposed purchase price reflects a significant premium equating to approximately 58% to USA Truck’s closing price of $5.69 on August 27, 2013.  Our proposal would provide your shareholders with immediate liquidity for their shares at an attractive price, without being subject to the significant execution risk associated with your current turnaround plan.  We would note that although the Company’s operational performance has improved, the Company’s operating ratio remains above 100%, its book value continues to fall, and the share volume remains quite limited, making it difficult for your shareholders to achieve liquidity.
 
Although we believe our proposal would provide full and fair value to your shareholders, we would be prepared to modestly increase our proposed purchase price if we were allowed to conduct due diligence and the Company were to demonstrate to us value that we have not already identified.
 
We believe there would be no impediment to completing a transaction on an expedited basis.  Based on discussions we have had with our potential financing sources, we are confident that we would be able to readily obtain the financing necessary to complete a transaction.  As such, our proposal is not subject to any financing contingency.  Moreover, based on our knowledge of the trucking industry, we do not believe there would be any antitrust impediment to completing a transaction.
 
Knight’s interest in a Knight / USA Truck combination is motivated by our belief that there is a compelling strategic rationale for a combination of our two companies:
 
 
·
Knight and USA Truck operate in complementary service lines, both with young tractor fleets with similar average lengths of haul.
     
 
·
Knight and USA Truck share similar positive cultures:  Both the Knight and USA Truck teams are hard-working, ethical, dedicated, family-oriented and committed to providing quality service to customers.
     
 
·
Knight believes that it can improve operational efficiencies at USA Truck – and do so more quickly than the USA Truck management team can alone.
     
 
·
Knight can finance USA Truck’s capital needs on a lower cost basis.
 
This letter is not a binding offer, and there will be no binding agreement between us or any commitment or obligation on either party with respect to a potential transaction unless and until a definitive agreement is executed by Knight and USA Truck.  Knight’s proposal is subject to customary conditions, including, among other things, Knight’s satisfaction with the results of due diligence in Knight’s sole discretion, the negotiation of a mutually satisfactory definitive agreement, and the approval of the negotiated terms of a transaction by Knight’s Board of Directors.
 
We are prepared to meet with members of the Board of Directors to discuss any aspect of our proposal and believe there could be a transaction with Knight that would be viewed as highly favorable by your shareholders.
 
We kindly request that by September 6, 2013, the USA Truck Board of Directors formally: (i) affirm to Knight a willingness to constructively advance discussions towards a transaction, or (ii) communicate to Knight a lack of willingness to constructively advance discussions.  Absent a satisfactory response, we will consider all options available to us, including making your shareholders aware of our offer.
 
We look forward to hearing back from you.
 
Very truly yours,
 

 
 
Kevin P. Knight
Chairman and CEO
Knight Transportation, Inc.
 

 

EX-99.3 4 pr13dex99_3.htm pr13dex99_3.htm
 
 
 
Exhibit 99.3
FOR IMMEDIATE RELEASE

KNIGHT TRANSPORTATION PROPOSES TO ACQUIRE USA TRUCK
FOR $9.00 PER SHARE IN CASH

Proposal Provides USA Truck Shareholders with Substantial Premium and Immediate Cash Value

Transaction Would Complement Knight’s Existing Operations and
Solidify Knight’s Position as a Premier North American Transportation Services Company

Knight Files Schedule 13D Disclosing Approximately 8% Ownership Stake in USA Truck

PHOENIX – September 26, 2013 – Knight Transportation, Inc. (NYSE: KNX)(“Knight”), one of North America’s largest and most diversified truckload transportation companies, today announced that it has proposed to acquire all of the outstanding shares of USA Truck, Inc. (NASDAQ: USAK) for $9.00 per share in cash, valuing the equity of USA Truck at approximately $95 million.  The total value of the proposed transaction is approximately $242 million, including USA Truck’s approximately $147 million of outstanding net indebtedness.  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 this announcement; a premium of approximately 50% to USA Truck’s average closing price for the ten trading days preceding this 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.

Knight also announced today that it has filed a Schedule 13D with the U.S. Securities and Exchange Commission disclosing ownership of 829,946 shares of USA Truck common stock, representing approximately 8% of USA Truck’s shares outstanding.

“We are confident that USA Truck shareholders will share our strong belief that Knight’s $9.00 per share all-cash, premium proposal would provide significant and immediate cash value that is significantly more attractive than USA Truck’s standalone prospects,” said Kevin Knight, Chairman and Chief Executive Officer of Knight.  “For Knight’s shareholders, we are confident that a combination with USA Truck would create value by further enhancing our position as a leading provider of multiple truckload transportation services in North America.  Today Knight is well positioned to gain market share by leveraging our services, technology, relationships and service center network, and we are confident that the proposed transaction would further accelerate our growth.

“Knight and USA Truck operate in complementary service lines, and this proposed transaction would create an operationally and financially stronger transportation company that is better positioned to deliver value for all of our stakeholders,” continued Mr. Knight.  “Our company has a demonstrated history of operational excellence, and we believe that we can meaningfully increase the financial performance of USA Truck’s operations.  Knight is ready and willing to complete this transaction, and we are prepared to take the necessary steps to realize the benefits inherent in this proposed combination.

“We look forward to the opportunity to engage constructively with USA Truck’s Board to discuss our proposal and to agree upon the terms of a transaction that is beneficial for both companies and all of our stakeholders.  Although we believe our current proposal would provide full and fair value to USA Truck shareholders, we would be prepared to modestly increase our proposed purchase price if additional value is identified during the due diligence process,” Mr. Knight concluded.

Knight believes that there are compelling strategic and financial benefits for a combination of the two companies, including:

·  
The $9.00 per share all-cash proposal represents a significant premium to USA Truck’s current share price and would provide shareholders with immediate value and liquidity for their shares;

·  
Knight’s proposal would eliminate the significant execution risk of USA Truck’s turnaround plan and reverse the erosion of value stemming from eight consecutive quarters of USA Truck net losses aggregating approximately $30 million or approximately $3 per USA Truck share;

·  
Knight’s proposal would liberate USA Truck shareholders from selling constraints imposed by USA Truck’s illiquidity, as evidenced by its average daily trading volume of only approximately 11,000 shares during the three month period ending September 25, 2013;

·  
Knight can finance USA Truck’s capital needs on a lower cost basis, reducing the risk to meeting the business’ ongoing capital obligations; and

·  
The transaction is expected to be accretive to Knight’s expected earnings per share in 2014 and beyond.  Knight’s consolidated operating ratio for the six months ended June 30, 2013, was 85.3%, compared with USA Truck’s consolidated operating ratio of 101.7% during the same period, and Knight expects to realize considerable operational improvements at USA Truck.

Below is the text of the letter that was sent on August 28, 2013, to USA Truck’s Board of Directors:

August 28, 2013

Board of Directors
USA Truck, Inc.
3200 Industrial Park Road
Van Buren, AR 72956
Attn: Robert A. Peiser

Gentlemen:

As you know, Knight Transportation, Inc. (“Knight”, “we”, “our”, or “us”) has invested significant time and effort to advance a Knight / USA Truck combination.  We are writing this letter to share our frustration with USA Truck’s unwillingness to constructively engage with us regarding our interest in a transaction while at the same time communicating directly to the Board of USA Truck the significant value we would propose to pay for the USA Truck shares as well as our rationale for a combination.

Based on an extensive analysis we have performed of the Company’s publicly disclosed information, at this time we are prepared to acquire all of the outstanding shares of common stock of USA Truck for an all-cash purchase price of $9.00 per share.  This proposed purchase price reflects a significant premium equating to approximately 58% to USA Truck’s closing price of $5.69 on August 27, 2013.  Our proposal would provide your shareholders with immediate liquidity for their shares at an attractive price, without being subject to the significant execution risk associated with your current turnaround plan.  We would note that although the Company’s operational performance has improved, the Company’s operating ratio remains above 100%, its book value continues to fall, and the share volume remains quite limited, making it difficult for your shareholders to achieve liquidity.

Although we believe our proposal would provide full and fair value to your shareholders, we would be prepared to modestly increase our proposed purchase price if we were allowed to conduct due diligence and the Company were to demonstrate to us value that we have not already identified.

We believe there would be no impediment to completing a transaction on an expedited basis.  Based on discussions we have had with our potential financing sources, we are confident that we would be able to readily obtain the financing necessary to complete a transaction.  As such, our proposal is not subject to any financing contingency.  Moreover, based on our knowledge of the trucking industry, we do not believe there would be any antitrust impediment to completing a transaction.

Knight’s interest in a Knight / USA Truck combination is motivated by our belief that there is a compelling strategic rationale for a combination of our two companies:

·  
Knight and USA Truck operate in complementary service lines, both with young tractor fleets with similar average lengths of haul.

·  
Knight and USA Truck share similar positive cultures:  Both the Knight and USA Truck teams are hard-working, ethical, dedicated, family-oriented and committed to providing quality service to customers.

·  
Knight believes that it can improve operational efficiencies at USA Truck – and do so more quickly than the USA Truck management team can alone.

·  
Knight can finance USA Truck’s capital needs on a lower cost basis.

This letter is not a binding offer, and there will be no binding agreement between us or any commitment or obligation on either party with respect to a potential transaction unless and until a definitive agreement is executed by Knight and USA Truck.  Knight’s proposal is subject to customary conditions, including, among other things, Knight’s satisfaction with the results of due diligence in Knight’s sole discretion, the negotiation of a mutually satisfactory definitive agreement, and the approval of the negotiated terms of a transaction by Knight’s Board of Directors.

We are prepared to meet with members of the Board of Directors to discuss any aspect of our proposal and believe there could be a transaction with Knight that would be viewed as highly favorable by your shareholders.

We kindly request that by September 6, 2013, the USA Truck Board of Directors formally: (i) affirm to Knight a willingness to constructively advance discussions towards a transaction, or (ii) communicate to Knight a lack of willingness to constructively advance discussions.  Absent a satisfactory response, we will consider all options available to us, including making your shareholders aware of our offer.

We look forward to hearing back from you.

Very truly yours,

Kevin P. Knight
Chairman and CEO
Knight Transportation, Inc.

Knight’s proposal is subject to the satisfaction of customary closing conditions.  The proposed transaction is not subject to any financing condition.  Knight has significant financial flexibility to acquire all of the outstanding shares of USA Truck and to assume or refinance USA Truck’s existing indebtedness. With USA Truck’s cooperation, it is anticipated that the proposed transaction could close as early as the fourth quarter of 2013.

Evercore is acting as financial advisor to Knight and Fried, Frank, Harris, Shriver & Jacobson LLP is acting as Knight’s legal advisor.

About Knight Transportation
Knight Transportation, Inc. is a provider of multiple truckload transportation services using a nationwide network of service centers in the U.S. to serve customers throughout North America. In addition to operating one of the country’s largest tractor fleets, Knight also partners with third-party equipment providers to provide a broad range of truckload services to its customers while creating quality driving jobs for our driving associates and successful business opportunities for owner-operators.

Forward-Looking Statements
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.
 
Contacts:
Dave Jackson, President / Adam Miller, CFO
Andrew Siegel / Eric Brielmann / James Golden
Knight Transportation, Inc.
Joele Frank, Wilkinson Brimmer Katcher
(602) 606-6349
(212) 355-4449