2008 USA Truck Analyst Day
Forward-Looking Statement
This information and the statements made at this Analyst Day Conference may
contain 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,” “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 reports, 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 Analyst Day Conference might not occur.
Our Stock is Under-Valued
Price to Book Multiples
As of August 15, 2008
Market Rejected Growth Strategy
USAK is the 2nd fastest growing name in TL Group*over past 10 years
(14.3% revenue CAGR), but…….
7th out of 9: EBITDA Growth CAGR
8th out of 9: Average ROCE and ROIC
2nd Largest Spread: Revenue CAGR and EBITDA CAGR (850 BPS)
2nd Largest Spread: Revenue CAGR and Net Income CAGR (500 BPS)
Largest Spread: Revenue CAGR and ROCE (930 BPS)
Largest Spread: Revenue CAGR and ROIC (950 BPS)
USAK has the 8thranked 10-year Stock Price CAGR (1.0%)
*CLDN, CVTI, HTLD, JBHT, KNX, MRTN, PTSI, USAK and WERN
Source: SEC Documents and Stephens Inc.
Strong Core
Customer Base
Cost Structure
Service Culture
ROC Drives Stock!
Copeland’s Value Mountain
Lane’s Value Mountain
Applied to T&L Industry
Confirms Copeland’s Theory
Revenue Growth Doesn’t Drive Stock Value*
*SEC Documents and Stephens Inc.
10-year Stock Price CAGR:
TL Group = 11.3%, S&P500 = 3.1%
Revenue Growth vs. Stock Price:
Low Correlation (27%)
ROCE vs. Stock Price:
High Correlation (79%)
A New Business Strategy
A Fresh Operating Strategy
Preserve the Core:
Customer base
Cost discipline
Service culture
Trucking Segment:
Restrict capacity growth
Expand margin primarily through yield management
Reduce length of haul (no particular target)
Increase use of asset-light owner operators (120/4-5%)
Strategic Capacity Solutions (SCS) Segment:
Aggressive growth in asset-light Brokerage & Intermodal
Flexible capacity for customers
Strong return on capital
The VEVA*Plan
The Results We’ll Need
Consistent Earnings
Earn our Cost of Capital
Positioned for Long-Term Growth
How We’ll Do It
Culture (Mission, Core Values)
Project Velocity
War on Accidents
Limit Capacity/Yield Management
Cost Management
Expand Owner Operator Fleet
Improve Brokerage Model
Launch Intermodal Model
Project Tech
Project People
The Results We’ll Need
Sustained Earnings Growth > 10%
Positive Economic Value Added
How We’ll Do It
Intermodal Growth
Brokerage Growth
Niche Dedicated Launch
General Freight Acquisitions
Productivity Gains
Share Repurchases/Dividends
August
2007
December
2013
December
2010
Margin Expansion
Earnings Growth
* We call our strategic plan Vision for Economic Value-Added, or VEVA
Project Velocity
Performance History
March 22 to
June 30
The War on Accidents
Insurance & Claims
Best-In-Class Cost Structure
Operating Cost per Mile*
Yield Management
Base Revenue per Paid Mile (2000 = 100)
4.7%
CAGR
1.1%
CAGR
Strategic Capacity Solutions
Freight Brokerage Growth*
Intermodal Growth*
* Base Revenue only (excludes fuel surcharge)
In Thousands
Project Tech
Age
Installed
Developer
Platform
Application
1999
1997
1995
1993
1986
1985
1965
1965
Year
Mainframe
Mainframe
Mainframe
Mainframe
Mainframe
Mainframe
Mainframe
Mainframe
Hardware
11
Custom
Website
13
Custom
Maintenance
9
Custom
Driver Recruiting
15
Custom
Accounts Receivable
22
Custom
Operations
23
Custom
Risk Management
43
3rdParty
Accounting
43
3rdParty
Accounts Payable
Software
Aging Technology Infrastructure
Project People
USAK 3.2 : 1
Peer Average 3.8 : 1
(USAK’s disadvantage is 126 employees)
Best-in-Class 6.0 : 1
(USAK’s disadvantage is 372 employees)
Driver to Non-Driver Ratio
20%
27%
Less than High School
24%
13%
Bachelor’s degree or higher
National Average
Fort Smith MSA
Education Level
Why Invest In USA Truck?
We have a solid core of
service, cost discipline
and a diverse customer
portfolio.
We have a vision and a
plan to create
shareholder value.
Our stock is trading at
a deep discount to our
industry peers.
