USA Truck Acquires CCC Express
2 November 1999
USA Truck Acquires CCC Express
VAN BUREN, Ark.--Nov. 1, 1999--USA Truck, Inc. (NASDAQ NMS: USAK), of Van Buren, Arkansas, today closed its previously announced acquisition of substantially all the assets of CARCO Carrier Corporation, which is headquartered in the neighboring city of Fort Smith, Arkansas. The acquired operations consist primarily of 498 tractors and 1,103 dry van trailers. Under the name "CCC Express," this fleet generated revenues from continuing operations of approximately $60 million in calendar year 1998 and approximately $45 million for the nine months ended September 30, 1999. The acquisition represents an increase of 43% in the tractor fleet of USA Truck, which operated 1,149 tractors and 2,266 dry van trailers before the closing. USA Truck has also assumed CARCO's rights under three leases for dedicated shop and fuel facilities.Several months ago, USA Truck announced the formation of a Corporate Development department to focus on dedicated fleets, private fleet conversions and acquisitions. The dedicated fleet business is now operating at an annual rate of approximately $12,000,000 in revenue. The Company feels this internal growth of the dedicated fleet business, together with the current acquisition, are significant early successes for the new Department.
CCC Express had made major inroads into the dedicated area on its own. About 20% of its revenues, or $12,000,000, was generated by dedicated contracts in 1998. The Company believes that combining USA Truck's and CCC Express' dedicated fleet operations will enhance its marketing efforts and operating efficiencies in that area.
Robert M. Powell, President and CEO of USA Truck, said, "We are enthusiastic about this acquisition because of the benefits it will bring to USA Truck and our new and existing customers. While our fleet has expanded significantly, our primary market area is still the same. We have always taken pride in our premium, on-time services, and this increased density of equipment will allow us to improve coverage in our market even further. We have already been working on the logistics of combining our operations, and today the two organizations were combined at our General Office at 3200 Industrial Park Road."
The purchase price of $35.3 million for the assets consisted of approximately $3 million in cash, the assumption of approximately $6.5 million in equipment notes and the refinancing of approximately $25.8 million in equipment notes. The cash portion of the purchase price was paid with available cash and proceeds of borrowings under USA Truck's bank credit facilities.
This press release contains forward-looking statements. Among the key factors that are not within the Company's control and that may prevent the Company from realizing the anticipated benefits of the acquisition include difficulties integrating the acquired operations and unanticipated problems with the operating systems or assets of the acquired operations, as well as the inability of USA Truck to retain the customers of CCC Express or to maintain historical utilization rates with a significantly larger number of tractors than USA Truck has previously operated. See also the factors discussed in the Company's filings with the SEC under the Securities Exchange Act of 1934, which may affect the Company's future results of operations and financial condition.
USA Truck is a medium haul, common and contract carrier specializing in truckload quantities of general commodities. The Company operates in the 48 contiguous United States and the Canadian provinces of Ontario and Quebec and in Mexico through the gateway city of Laredo, Texas.