USA Truck, Inc.
Jason R. Bates
Executive Vice President & CFO
Investor Relations Officer
USA Truck, Inc. (NASDAQ: USAK) announced that it has closed a $125 million revolving credit agreement (“Revolver”) with Wells Fargo Capital Finance, LLC, as Administrative Agent and PNC Bank, as Syndication Agent. The Revolver has a five year term, is secured by substantially all of the Company's assets, and can be expanded up to $175 million subject to customary conditions and lender participation.
Cliff Beckham, USA Truck’s President and Chief Executive Officer, said: "We are pleased by this strong show of support from Wells Fargo and PNC Bank, two of the most knowledgeable and experienced senior lenders to the trucking industry. The structure of the new Revolver affords us significant advantages over our prior credit facility by dramatically increasing our operating flexibility, improving our liquidity, and lowering our ongoing interest rate margin. The access to more stable capital is expected to better support our efforts to improve operating results in future periods.”
The Revolver's structure capitalizes on the Company’s strong balance sheet and asset base to provide time and flexibility to execute management’s operational improvement plans. Rather than quarterly financial covenants, the Revolver contains a minimum excess availability requirement equal to 15% of the maximum revolver amount (currently $18.75 million) and an annual capital expenditure limit ($53.8 million for calendar year 2012, increasing to $71.0 million in 2013 and with further increases thereafter) that was established with the intent of affording us adequate capacity for maintaining a modern fleet.
From a liquidity perspective, availability under the Revolver is approximately $28.3 million after repaying the approximately $75.9 million outstanding under the prior credit facility and giving effect to the minimum availability requirement reflecting a meaningful increase in liquidity compared with the prior facility. On an ongoing basis, the new borrowing base consists of customary advance rates against accounts receivable, tractors, and trailers. A collateral cushion above the maximum facility size is required, and current collateral is well in excess of that requirement.
The Revolver bears interest at rates typically based on the Wells Fargo prime rate or LIBOR, in each case plus an applicable margin. Most borrowings are expected to be based on the LIBOR rate option. The applicable margin ranges from 2.25% to 2.75% based on average excess availability and is currently 2.50%. The applicable LIBOR margin reflects a savings of 1.25% compared with the rate charged under our prior credit facility.
Mr. Beckham further stated: "This new facility represents an exciting step forward for USA Truck, and I would like to thank our internal team and our new lenders for their efforts to get it closed and funded promptly. It provides a boost of confidence for our employees, customers and stockholders, and enables us to focus our full attention on improving our operational execution."
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These statements generally may be identified by their use of terms or phrases such as “expects,” “estimates,” “anticipates,” “projects,” “believes,” “plans,” “goals,” “intends,” “may,” “will,” “should,” “could,” “potential,” “continue,” “future” and terms or phrases of similar substance. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Accordingly, actual results may differ from those set forth in the forward-looking statements. Readers should review and consider the factors that may affect future results and other disclosures by the Company in its press releases, Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information. In light of these risks and uncertainties, the forward- looking events and circumstances discussed in this press release might not occur.
All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by this cautionary statement.
References to the “Company,” “we,” “us,” “our” and words of similar import refer to USA Truck, Inc. and its subsidiary.
USA Truck is a dry van truckload carrier transporting general commodities via our General Freight and Dedicated Freight service offerings. We transport commodities throughout the continental United States and into and out of portions of Canada. We also transport general commodities into and out of Mexico by allowing through-trailer service from our terminal in Laredo, Texas. Our Strategic Capacity Solutions and Intermodal operating segments provide customized transportation solutions using our technology and multiple modes of transportation including our assets and the assets of our partner carriers.
This press release and related information will be available to interested parties at our web site, http://www.usa-truck.com under the “News Releases” tab of the “Investors” menu.
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