Delaware | 001-35007 | 20-5589597 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
2200 South 75th Avenue Phoenix, Arizona |
85043 |
|
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit | ||
Number | Description | |
Exhibit 99.1 | News release dated April 25, 2011, issued by Swift Transportation Company |
|
Exhibit 99.2 | Swift Transportation Company Financial Condition Summary and Other Data |
SWIFT TRANSPORTATION COMPANY |
||||
By: | /s/ Virginia Henkels | |||
Name: | Virginia Henkels | |||
Title: | Executive Vice President and Chief Financial Officer |
Exhibit | ||
Number | Description | |
Exhibit 99.1 | News release dated April 25, 2011, issued by Swift Transportation Company |
|
Exhibit 99.2 | Swift Transportation Company Financial Condition Summary and Other Data |
| Operating Revenue Increases $104.1 Million or 15.9%, Over 2010 First Quarter |
| Operating Income Increases $23.5 Million, or 101.5%, while Adjusted Operating Income*
Increases $14.9 Million, or 46.7%, from 2010 First Quarter |
| Operating Ratio Improves 270 basis points, while Adjusted Operating Ratio* Improves
190 Basis Points from 2010 First Quarter |
(* 2011 and 2010 results adjusted as detailed below.) |
Three Months Ended March 31, | ||||||||||||
2011 | 2010 | Change | ||||||||||
(Unaudited) | ||||||||||||
($ in millions, except per share data) | ||||||||||||
Operating revenue |
$ | 758,889 | $ | 654,830 | 15.9 | % | ||||||
Revenue excluding fuel surcharge revenue |
$ | 621,072 | $ | 566,014 | 9.7 | % | ||||||
Operating Income |
$ | 46,729 | $ | 23,193 | 101.5 | % | ||||||
Adjusted Operating Income |
$ | 46,729 | $ | 31,849 | 46.7 | % | ||||||
Operating Ratio |
93.8 | % | 96.5 | % | 270 | bps | ||||||
Adjusted Operating Ratio |
92.5 | % | 94.4 | % | 190 | bps | ||||||
Diluted EPS |
$ | 0.02 | $ | (0.88 | ) | $ | 0.90 | |||||
Adjusted EPS |
$ | 0.06 | $ | (0.38 | ) | $ | 0.44 |
2
3
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(Amounts in thousands, except per share data) |
||||||||
Operating revenue |
$ | 758,889 | $ | 654,830 | ||||
Operating expenses: |
||||||||
Salaries, wages and employee benefits |
195,476 | 177,803 | ||||||
Operating supplies and expenses |
57,104 | 47,830 | ||||||
Fuel |
150,281 | 106,082 | ||||||
Purchased transportation |
194,037 | 175,702 | ||||||
Rental expense |
17,989 | 18,903 | ||||||
Insurance and claims |
22,725 | 20,207 | ||||||
Depreciation and amortization of property
and equipment |
50,358 | 60,019 | ||||||
Amortization of intangibles |
4,727 | 5,478 | ||||||
Impairments |
| 1,274 | ||||||
Gain on disposal of property and equipment |
(2,255 | ) | (1,448 | ) | ||||
Communication and utilities |
6,460 | 6,422 | ||||||
Operating taxes and licenses |
15,258 | 13,365 | ||||||
Total operating expenses |
712,160 | 631,637 | ||||||
Operating income |
46,729 | 23,193 | ||||||
Other (income) expenses: |
||||||||
Interest expense |
37,501 | 62,596 | ||||||
Derivative interest expense |
4,680 | 23,714 | ||||||
Interest income |
(467 | ) | (220 | ) | ||||
Other |
(511 | ) | (371 | ) | ||||
Total other (income) expenses, net |
41,203 | 85,719 | ||||||
Income (loss) before income taxes |
5,526 | (62,526 | ) | |||||
Income tax expense (benefit) |
2,321 | (9,525 | ) | |||||
Net income (loss) |
$ | 3,205 | $ | (53,001 | ) | |||
Basic earnings (loss) per share |
$ | 0.02 | $ | (0.88 | ) | |||
Diluted earnings (loss) per share |
$ | 0.02 | $ | (0.88 | ) | |||
Shares used in per share calculations |
||||||||
Basic |
138,127 | 60,117 | ||||||
Diluted |
138,900 | 60,117 | ||||||
4
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Diluted earnings (loss) per share |
$ | 0.02 | $ | (0.88 | ) | |||
Adjusted for: |
||||||||
Income tax expense (benefit) |
0.02 | (0.16 | ) | |||||
Income (loss) before income taxes |
0.04 | (1.04 | ) | |||||
Non-cash impairments(b) |
| 0.02 | ||||||
Other unusual non-cash items(c) |
| 0.12 | ||||||
Mark-to-market adjustment of interest rate
swaps(d) |
| 0.19 | ||||||
Amortization of certain intangibles(e) |
0.03 | 0.09 | ||||||
Amortization of unrealized losses on
interest rate
swaps(f) |
0.03 | | ||||||
Adjusted income (loss) before income taxes |
0.10 | (0.62 | ) | |||||
Provision for income tax (benefit) expense
at normalized effective rate |
0.04 | (0.24 | ) | |||||
Adjusted EPS |
$ | 0.06 | $ | (0.38 | ) | |||
(a) | We define Adjusted EPS as (1) income (loss) before income taxes plus (i) amortization of
the intangibles from our 2007 going-private transaction, (ii) non-cash impairments, (iii)
other unusual non-cash items, (iv) excludable transaction costs, (v) the mark-to-market
adjustment on our interest rate swaps that is recognized in the statement of operations in a
given period, and (vi) the amortization of previous losses recorded in accumulated other
comprehensive income related to the interest rate swaps we terminated upon our IPO and
refinancing transactions in December 2010; (2) reduced by income taxes at 39%, our normalized
effective tax rate; (3) divided by weighted average diluted shares outstanding. We believe the
presentation of financial results excluding the impact of the items noted above provides a
consistent basis for comparing our results from period to period and to those of our peers due
to the non-comparable nature of the intangibles from our going-private transaction, the
historical volatility of the interest rate derivative agreements and the non-operating nature
of the impairment charges, transaction costs and other adjustment items. Adjusted EPS is not
presented in accordance with GAAP and should be considered in addition to, not as a substitute
for, or superior to, measures of financial performance in accordance with GAAP. |
|
(b) | Revenue equipment with a carrying amount of $3.6 million was written down to its fair value
of $2.3 million, resulting in an impairment charge of $1.3 million in the first quarter of
2010. |
|
(c) | Incremental pre-tax depreciation expense of $7.4 million reflecting managements revised
estimates regarding salvage value and useful lives for approximately 7,000 dry van trailers,
which management decided during the first quarter of 2010 to scrap over the next few years. |
|
(d) | Mark-to-market adjustment of interest rate swaps of $11.1 million reflects the portion of the
change in fair value of these financial instruments which was recorded in earnings in the
first quarter of 2010 and excludes the portion recorded in accumulated other comprehensive
income under cash flow hedge accounting. |
|
(e) | Amortization of certain intangibles reflects the non-cash amortization expense of $4.4
million and $5.2 million for the three months ended March 31, 2011 and 2010, respectively,
relating to certain intangible assets identified in the 2007 going-private transaction through
which Swift Corporation acquired Swift Transportation Co. |
|
(f) | Amortization of unrealized losses on interest rate swaps reflects the non-cash amortization
expense of $4.7 million for the three months ended March 31, 2011 comprised of previous losses
recorded in accumulated other comprehensive income related to the interest rate swaps we
terminated upon our IPO and concurrent refinancing transactions in December 2010. Such losses
were incurred in prior periods when hedge accounting applied to the swaps and are expensed in
relation to the hedged interest payments through the original maturity of the swaps in August
2012. |
5
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(Dollars in thousands) | ||||||||
Operating revenue |
$ | 758,889 | $ | 654,830 | ||||
Less: Fuel surcharge revenue |
137,817 | 88,816 | ||||||
Revenue excluding fuel surcharge revenue |
621,072 | 566,014 | ||||||
Operating expenses |
712,160 | 631,637 | ||||||
Adjusted for: |
||||||||
Fuel surcharge revenue |
(137,817 | ) | (88,816 | ) | ||||
Non-cash impairments |
| (1,274 | ) | |||||
Other items |
| (7,382 | ) (b) | |||||
Adjusted operating expenses |
574,343 | 534,165 | ||||||
Adjusted operating income |
$ | 46,729 | $ | 31,849 | ||||
Adjusted Operating Ratio (c) |
92.5 | % | 94.4 | % | ||||
Operating Ratio |
93.8 | % | 96.5 | % |
(a) | We define Adjusted Operating Ratio as (a) total operating expenses, less (i) fuel surcharge
revenue, (ii) non-cash impairment charges, (iii) certain other items, and (iv) excludable
transaction costs, as a percentage of (b) total revenue excluding fuel surcharge revenue. We
believe fuel surcharge is sometimes volatile and eliminating the impact of this source of
revenue (by netting fuel surcharge revenue against fuel expense) affords a more consistent
basis for comparing our results of operations. We also believe excluding impairments and other
unusual items enhances the comparability of our performance from period to period. Adjusted
Operating Ratio is not a recognized measure under GAAP. Adjusted Operating Ratio should be
considered in addition to, not as a substitute for, or superior to, measures of financial
performance in accordance with GAAP. |
|
(b) | Incremental pre-tax depreciation expense reflecting managements revised estimates regarding
salvage value and useful lives for approximately 7,000 dry van trailers, which management
decided during the first quarter of 2010 to scrap over the next few years. |
|
(c) | We have not included adjustments to Adjusted Operating Ratio to reflect the non-cash
amortization expense of $4.4 million and $5.2 million during the three months ended March 31,
2011 and 2010, respectively, relating to certain intangible assets identified in our 2007
going private transaction. |
6
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Trucking revenue (1,2) |
$ | 554,721 | $ | 503,507 | ||||
Weekly trucking revenue per tractor (2) |
$ | 2,862 | $ | 2,711 | ||||
Deadhead miles percentage |
12.13 | % | 12.22 | % | ||||
Average loaded length of haul (miles) |
430 | 438 | ||||||
Average tractors available for dispatch |
||||||||
Company |
11,105 | 10,747 | ||||||
Owner Operator |
3,972 | 3,696 | ||||||
Total |
15,077 | 14,443 | ||||||
(1) | In thousands. |
|
(2) | Excludes fuel surcharge, rail, third party carrier, leasing, and other shop and miscellaneous
revenue. |
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
(Amounts in thousands) | ||||||||
Net income (loss) |
$ | 3,205 | $ | (53,001 | ) | |||
Adjusted for: |
||||||||
Depreciation and amortization of
property and equipment |
50,358 | 60,019 | ||||||
Amortization of intangibles |
4,727 | 5,478 | ||||||
Interest expense |
37,501 | 62,596 | ||||||
Derivative interest expense |
4,680 | 23,714 | ||||||
Interest income |
(467 | ) | (220 | ) | ||||
Income tax expense (benefit) |
2,321 | (9,525 | ) | |||||
Earnings before interest, taxes,
depreciation and amortization (EBITDA) |
$ | 102,325 | $ | 89,061 | ||||
Non-cash equity compensation (b) |
2,424 | | ||||||
Non-cash impairments |
| 1,274 | ||||||
Adjusted earnings before interest, taxes,
depreciation and amortization
(Adjusted EBITDA) |
$ | 104,749 | $ | 90,335 | ||||
(a) | We define Adjusted EBITDA as net income (loss) plus (i) depreciation and amortization, (ii)
interest and derivative interest expense, including other fees and charges associated with
indebtedness, net of interest income, (iii) income taxes, (iv) non-cash impairments, (v)
non-cash equity compensation expense, (vi) other unusual non-cash items, and (vii) excludable
transaction costs. We believe that Adjusted EBITDA is a relevant measure for estimating the
cash generated by our operations that would be available to cover capital expenditures, taxes,
interest and other investments and that it enhances an investors understanding of our
financial performance. We use Adjusted EBITDA for business planning purposes and in measuring
our performance relative to that of our competitors. Our method of computing Adjusted EBITDA
is consistent with that used in our senior secured credit agreement for covenant compliance
purposes and may differ from similarly titled measures of other companies. Adjusted EBITDA is
not a recognized measure under GAAP. Adjusted EBITDA should be considered in addition to, not
as a substitute for or superior to, net income, operating income or any other performance
measures derived in accordance with GAAP as measures of operating performance or operating
cash flows as a measure of liquidity. |
|
(b) | Includes the $2.4 million of recurring non-cash equity compensation expense following our
IPO, on a pre-tax basis. |
2
March 31, 2011 | December 31, 2010 | |||||||
(Amounts in thousands) | ||||||||
Cash and cash equivalents |
$ | 21,549 | $ | 47,494 | ||||
Restricted cash |
85,078 | 84,568 | ||||||
Accounts receivable, net |
314,666 | 276,879 | ||||||
Property and equipment, net |
1,315,399 | 1,339,638 | ||||||
Intangible assets, net |
364,017 | 368,744 | ||||||
Goodwill |
253,256 | 253,256 | ||||||
Other assets |
201,715 | 197,316 | ||||||
Total assets |
$ | 2,555,680 | $ | 2,567,895 | ||||
Total debt and capital lease obligations (1) |
1,693,809 | 1,774,100 | ||||||
Securitization of accounts receivable |
136,000 | 171,500 | ||||||
Other liabilities |
735,639 | 705,466 | ||||||
Total liabilities |
2,565,448 | 2,651,066 | ||||||
Stockholders deficit |
(9,768 | ) | (83,171 | ) | ||||
Total liabilities and stockholders deficit |
$ | 2,555,680 | $ | 2,567,895 | ||||
(1) | Total debt and capital lease obligations as of March 31, 2011 includes $999.2 million
net carrying value of senior secured first lien term loan, $490.4 million net carrying
value of senior second priority secured notes, $11.0 million of unsecured floating rate
notes, $15.7 million of unsecured fixed rate notes, and $177.5 million of other secured
indebtedness and capital lease obligations. Total debt and capital lease obligations as of
December 31, 2010 includes $1,059.4 million net carrying value of senior secured first lien
term loan, $490.0 million net carrying value of senior second priority secured notes, $11.0
million of unsecured floating rate notes, $15.7 million of unsecured fixed rate notes, and
$198.0 million of other secured indebtedness and capital lease obligations. |
3
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(Amounts in thousands) | ||||||||
Net income (loss) |
$ | 3,205 | $ | (53,001 | ) | |||
Adjustments to reconcile net income (loss) to net cash
provided by operating activities |
64,139 | 55,464 | ||||||
(Decrease) increase in cash resulting from changes in
Accounts receivable, inventories, other assets,
accounts payable, accrued liabilities and other liabilities |
(7,469 | ) | 12,644 | |||||
Net cash provided by operating activities |
$ | 59,875 | $ | 15,107 | ||||
Capital expenditures, net of disposal proceeds |
$ | (33,654 | ) | $ | (12,471 | ) | ||
Increase in restricted cash |
(510 | ) | (24,002 | ) | ||||
Other investing activities |
2,615 | 1,342 | ||||||
Net cash used in investing activities |
$ | (31,549 | ) | $ | (35,131 | ) | ||
Proceeds from issuance of common stock, net of
fees and costs of issuance (1) |
$ | 62,994 | $ | | ||||
Repayment of long term debt and capital lease obligations |
(81,765 | ) | (10,625 | ) | ||||
Net change in accounts receivable securitization obligation |
(35,500 | ) | 2,000 | |||||
Other financing activities |
| 114 | ||||||
Net cash used in financing activities |
$ | (54,271 | ) | $ | (8,511 | ) | ||
Net decrease in cash and cash equivalents |
(25,945 | ) | (28,535 | ) | ||||
Cash and cash equivalents at beginning of period |
47,494 | 115,862 | ||||||
Cash and cash equivalents at end of period |
$ | 21,549 | $ | 87,327 | ||||
(1) | On January 20, 2011, we issued an additional 6,050,000 shares of our Class A common
stock to the underwriters of our IPO at the IPO price of $11.00 per share, less the
underwriters discount, and received proceeds of $63.2 million in cash, prior to expenses
of such issuance, pursuant to the over-allotment option in the underwriting agreement. Of
these proceeds, $60.0 million were used in January 2011 to pay down the first lien term
loan and $3.2 million were used in February 2011 to pay down the accounts receivable
securitization facility. |
4