USA Truck CEO John Simone, 53, is on an indefinite leave because of a “serious medical condition,” with Tom Glaser appointed interim chief operations officer to lead the company. Company shares (NASDAQ: USAK) fell more than 9% in Monday (April 6) morning trading.
Shares of USA Truck fell to $24.95 by around 11 a.m., down more than 9%. The share price would close the day at $25.68, down $1.75, or a drop of 6.38%. During the past 52 weeks the share price has ranged from a $32.14 high to a $13.90 low.
Simone, hired by USA Truck Board Chairman Robert Peiser in early 2013, was instrumental in returning the long-haul carrier and logistics company to profitability. The company reported Feb. 11 that 2014 net income was $6.033 million, a more than $15 million swing from the $9.11 million loss in 2014. The swing ended five consecutive years of losses. Prior to 2014, the company would post five consecutive years of losses that totaled almost $48 million – wiping out the $45.76 million in net income earned between 2001 and 2008.
“The board understands that it is in John’s best interests at this time to focus on his health and recover from his illness. The Company is fortunate to have someone of Tom’s talent and experience available to provide executive support, as well as a strong management team comprised of both executives recruited by John and others fostered from the team already present when he joined USA Truck. Together, we believe this team will maintain the momentum of the Company’s turnaround while at the same time helping John regain full strength as soon as possible.”
Peiser told The City Wire that Simone may return to the job if his condition improves, and that deciding on the interim COO title for Glaser was made to “not let it look optically like we are replacing John.” Peiser stressed during the brief interview that the company is not deviating from the turnaround plan. The plan, Peiser noted, is not just Simone’s plan, but was created by the management team and Board. He also said the management team and company employees have responded well to the news.
“They are probably more motivated to prove to John that they can handle it,” Peiser said.
Glaser is a member of the USA Truck Board and served as the company’s COO from January 2013 to June 2013. He returned to the company as a Board member as part of an early 2014 agreement between USA Truck and investment firms Baker Street Capital and Stone House Capital Management. After the USA Truck Board removed a shareholders provision that capped ownership at 10%, Baker Street and Stone House combined their holdings. With their 28% of USA Truck shares, they essentially bargained for a seat at the management table. Vadim Perelman, managing partner and chief investment officer of Baker Street, was also elected to the USA Truck Board as part of the deal.
That agreement was renewed in February, with USA Truck agreeing to elect certain Board members requested by Baker Street and Stone House. In return, the two investment firms agreed to reduce their shares of USA Truck “in an orderly manner.”
Glaser, a former president and COO of Celadon Group, has more than 25 years of experience in the industry. His work includes president and CEO of Arnold Transportation Services (July 2008 to March 2010), and a board member of Priority Transportation (February 2008 to June 2010). Glaser graduated from the University of Michigan with a bachelor’s degree in in business administration.
"John and his team have placed USA Truck firmly on the right path to executing the Company’s strategic plan and unlocking its earnings potential,” Glaser noted in Monday’s statement. “Everyone at USA Truck is intent on continuing the many improvements that have been made over the past two years. I look forward to assisting them in those efforts and wish John a speedy recovery."