EX-99.1 2 tcam054414_ex99-1.htm REPORTING OF THIRD QUARTER RESULTS Exhibit 99.1 to Transport Corporation of America, Inc. Form 8-K dated October 25, 2005

Exhibit 99.1

Transport Corporation of America, Inc.
1715 Yankee Doodle Road
Eagan, MN 55121

Traded: Nasdaq: TCAM

COMPANY CONTACTS:      
Michael Paxton  Keith Klein 
Chairman, President and CEO  Chief Financial Officer 
(651) 686-2500  (651) 686-2500 

FOR IMMEDIATE RELEASE
Tuesday, October 25, 2005

TRANSPORT CORPORATION OF AMERICA
REPORTS THIRD QUARTER RESULTS

MINNEAPOLIS, MINNESOTA, October 25, 2005 – Transport Corporation of America, Inc. (NASDAQ: TCAM) today announced revenues for the third quarter 2005 of $64.3 million, compared to revenues of $65.7 million for the third quarter 2004, a decrease of 2.1 percent. Excluding fuel surcharge revenues, revenues decreased 8.5 percent to $55.7 million in the third quarter 2004 from $60.9 million in the same period of 2003. Third quarter’s net earnings were $433,000 or $0.07 per diluted share, compared with a 2004 third quarter net earnings of $36,000, or $0.01 per diluted share.

Third quarter 2005 results include an after-tax gain on the sale of our Garland, Texas support center of $182,000, or $0.03 per diluted share. The third quarter 2004 results included additional expense related to several serious accidents that occurred during the period. Insurance, claims and damage expense was $3.9 million, or 6.0 percent of revenue, during the third quarter 2004 compared to $2.0 million, or 3.1 percent of revenue, for the same period 2005.

Michael Paxton, Chairman, President and Chief Executive Officer, commented, “The challenging driver market continues to impede our ability to grow core truckload revenues. While we have seen an increase in the number of Company drivers during the quarter, we have continued to lose owner operators at a faster pace than we are able to recruit Company drivers. On the Company side, we believe we are seeing the results of our recruiting initiatives, including a renewed focus on recruiting students directly from schools, our commitment to get drivers home weekly in over 60 percent of our recruiting markets, and additional dedicated fleet opportunities. These items have allowed us to increase our hiring numbers and decrease our termination numbers in the third quarter, which reduced the rate of decline in capacity from recent quarter’s levels.”

Paxton continued, “Even though our overall seated capacity has decreased, we continue to benefit from programs to identify and achieve cost savings, improved accident frequency and claims development, and improved tractor utilization. Revenue per tractor per week increased to $3,096 in the third quarter 2005 compared to $3,018 during the same period 2004. Our deadhead percentage (empty miles) has decreased to 10.7 percent in the third quarter 2005 compared to 11.2 percent in the same period 2004. In addition to improving the fundamentals of our fleet, we continue to focus on growing new brokerage and intermodal business opportunities. During the third quarter 2005, logistics and intermodal revenues increased to $4.4 million compared to $1.1 million for the same period 2004.”




“Finally, even with increased capital expenditures over the previous year, we were able to reduce outstanding debt for the 22nd straight quarter. At September 30, 2005, total debt and capital lease obligations were $47.3 million compared to $48.2 million at June 30, 2005.”

Transport America also announced that the Federal Motor Carrier Safety Administration (“FMCSA”) has just completed a follow-up review of the operations and safety management controls of the Company. Upon completion of the review process, the FMCSA confirmed Transport America’s safety fitness rating of “satisfactory”, the highest safety fitness rating given by the FMCSA.

Year-To-Date Results

For the nine-month period ended September 30, 2005, Transport America announced revenues of $188.6 million, compared with 2004 year-to-date revenues of $193.1 million. Net earnings for the nine-month period were $1.0 million, or $0.16 per diluted share, compared with a 2004 net earnings of $902,000, or $0.13 per diluted share.

Included in the 2005 results is an after-tax gain on the sale of our Garland, Texas support center of $182,000, or $0.03 per share. Included in the 2004 results is an after-tax impairment charge of $114,000, or $0.02 per diluted share, related to the difference between the Company’s rent on a portion of its headquarters facility and the expected rental income from a multi-year sub-lease agreement entered into during the second quarter.

The Company will host a conference call and webcast today, October 25, 2005 at 10:00 a.m. Central Time. The Internet broadcast can be accessed at the Company’s website, www.transportamerica.com, or at www.fulldisclosure.com.

About Transport America

Transport Corporation of America, Inc., based in the Minneapolis — St. Paul metropolitan area, provides a wide range of truckload freight carriage and logistics services to customers in the United States and Canada. Transport America focuses on providing time-definite and other responsive services through its team of dedicated and committed employees supported by state-of-the-art technology and information systems.

This news release contains forward-looking statements regarding the Company. The Company wishes to caution readers not to place undue reliance on any forward-looking statements which speak only as of the date made. The following important factors, among other things, in some cases have affected and in the future could affect the Company’s actual results and could cause the Company’s actual financial performance to differ materially from that expressed in any forward-looking statement: (1) the highly competitive conditions that currently exist in the Company’s market and the Company’s ability to compete, (2) the Company’s ability to recruit, train, and retain qualified drivers, (3) increases in fuel prices, and the Company’s ability to recover these costs from its customers, (4) the impact of environmental standards and regulations on new revenue equipment, (5) changes in governmental regulations applicable to the Company’s operations, (6) adverse weather conditions, (7) accidents, (8) the financing and resale market for used revenue equipment, (9) changes in interest rates, (10) cost of liability insurance coverage, (11) changes in safety rating by Regulatory authorities, and (12) downturns in general economic conditions affecting the Company and its customers. The foregoing list should not be construed as exhaustive and the Company disclaims any obligation subsequently to revise or update any previously made forward-looking statements. Unanticipated events are likely to occur.

Financial Tables to Follow...




TRANSPORT CORPORATION OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

Three and Nine Months ended September 30, 2005 and 2004
(In thousands, except share and per share amounts)

Three Months
(Unaudited)

Nine Months
(Unaudited)

2005
2004
2005
2004
Amount
%
Amount
%
Amount
%
Amount
%
Operating revenues     $ 64,357    100.0   $ 65,730    100.0   $ 188,621    100.0   $ 193,105    100.0  
 
Operating expenses:    
  Salaries, wages, and benefits    19,655    30.6    19,888    30.2    57,976    30.8    57,365    29.7  
  Fuel, maintenance, and other expense    13,092    20.3    11,354    17.3    36,425    19.3    31,005    16.1  
  Purchased transportation    18,436    28.7    19,496    29.7    54,390    28.9    60,321    31.2  
  Revenue equipment leases    403    0.6    347    0.5    16,805    0.6    892    0.5  
  Depreciation and amortization    5,599    8.7    5,988    9.1    1,195    8.9    17,693    9.2  
  Insurance, claims, and damage    2,003    3.1    3,931    6.0    6,233    3.3    9,824    5.1  
  Taxes and licenses    1,075    1.7    1,142    1.7    3,357    1.8    3,391    1.8  
  Communication    339    0.5    441    0.7    1,206    0.6    1,339    0.7  
  Other general and administrative expenses    2,819    4.4    2,343    3.6    7,780    4.1    7,226    3.7  
  Impairment of sublease office space                            190    0.1  
  Gain on disposition of equipment    (314 )  (0.5 )          (332 )  (0.2 )  (22 )  (0.1 )








        Total operating expenses    63,107    98.1    64,930    98.8    185,035    98.1    189,224    98.0  








 
    Operating income      1,250    1.9    800    1.2    3,586    1.9    3,881    2.0  
 
Interest expense, net    602    0.9    756    1.1    1,928    1.0    2,406    1.2  








 
    Earnings before income taxes      648    1.0    44    0.1    1,658    0.9    1,475    0.8  
 
Income tax provision    215    0.3    8    0.0    617    0.3    573    0.3  








    Net earnings      433    0.7    36    0.1    1,041    0.6    902    0.5  








 
 
Earnings per common share – basic   $0.07   $0.01   $0.16   $0.13  




Earnings per common share – diluted   $0.07   $0.01   $0.16   $0.13  




Average common shares outstanding    
    Basic    6,563,440       6,523,417     6,554,142     6,788,123
    Diluted    6,647,913       6,655,208     6,672,350     6,904,551   




TRANSPORT CORPORATION OF AMERICA, INC.
BALANCE SHEET
September 30, 2005 and 2004
(In thousands)
Unaudited

ASSETS
             
2005
2004
Current Assets:
  Cash and cash equivalents   $ 2,215   $ 5,415  
  Trade receivables, net of allowances    27,504    27,721  
  Other receivables    1,716    2,450  
  Operating supplies    986    853  
  Deferred income taxes    5,354    6,516  
  Prepaid expenses    2,281    2,655  


Total Current Assets      40,056    45,610  
 
Revenue Equipment, at Cost      175,663    183,751  
  Less: accumulated depreciation    (71,868 )  (82,664 )


Revenue Equipment, Net      103,795    101,087  
 
Property and Other Equipment:    
  Land, buildings, and improvements    14,892    16,369  
  Other equipment and leasehold improvements    19,408    21,338  
  Less: accumulated depreciation    (17,747 )  (18,275 )


Property and Other Equipment, Net      16,553    19,432  


Revenue, Property and Other Equipment, Net      120,348    120,519  
Other Assets, Net      2,492    945  


Total Assets     $ 162,896   $ 167,074  


 
LIABILITIES AND SHAREHOLDERS’ EQUITY
2005
2004
Current Liabilities:
  Current maturities of long-term debt   $ 8,836   $ 8,544  
  Current maturities of capital lease obligations    4,962    8,984  
  Accounts payable    7,918    9,551  
  Checks issued in excess of cash balances    2,439    1,295  
  Due to independent contractors    1,366    1,386  
  Accrued expenses    21,816    22,759  


Total Current Liabilities      47,337    52,519  
 
Long-Term Debt & Capital Lease Obligations
  Long-term debt, less current maturities    33,550    28,549  
  Capital lease obligations, less current maturities        4,947  


Total Long-Term Debt    
  & Capital Lease Obligations      33,550    33,496  
 
Deferred Income Taxes      24,444    25,949  
 
Shareholders’ Equity:
  Common stock    66    65  
  Additional paid-in capital    25,680    25,402  
  Retained earnings    31,819    29,643  


Total Shareholders’ Equity      57,565    55,110  
 


Total Liabilities and Equity     $ 162,896   $ 167,074  






TRANSPORT CORPORATION OF AMERICA, INC.
Selected Consolidated Financial and Operating Data
Three and Nine Months Ended September 30, 2005 and 2004

Three Months
Nine Months
2005
2004
2005
2004
Operating Statistics                    
       Company tractors, seated    851    918    851    918  
       Company tractors, other    207    116    207    116  
       Independent contractor    433    601    433    601  




       Total tractors (at end of period)    1,491    1,635    1,491    1,635  
       Trailers (at end of period)    4,376    4,992    4,376    4,992  
 
       Average tractors in service    1,294    1,548    1,333    1,547  
       Total loaded miles (000's)    33,073    39,945    101,191    120,621  
       Total miles (000's)    37,021    44,996    113,628    135,281  
 
       Freight revenue per tractor per week*   $ 2,941   $ 2,882   $ 2,906   $ 2,865  
       Fuel surcharge per tractor per week    497    231    413    188  




       Operating revenue per tractor per week   $ 3,438   $ 3,113   $ 3,319   $ 3,053  




 
       Freight revenue per loaded mile*   $ 1.550   $ 1.497   $ 1.544   $ 1.483  
       Fuel surcharge per loaded mile    0.262    0.120    0.220    0.097  




       Operating revenue per loaded mile   $ 1.812   $ 1.617   $ 1.764   $ 1.580  




 
       Freight revenue per mile*   $ 1.385   $ 1.329   $ 1.375   $ 1.322  
       Fuel surcharge per mile    0.234    0.106    0.196    0.087  




       Operating revenue per mile   $ 1.619   $ 1.435   $ 1.571   $ 1.409  




 
       Average empty mile percentage    10.7 %  11.2 %  10.9 %  10.8 %
       Average length of haul, all miles    652    681    658    687  
       Average annual revenues per non-driver employee (000’s)   $ 678   $ 649   $ 649   $ 636  
 
Financial Data (000’s)   
       Freight revenue (excluding fuel surcharge)   $ 51,258   $ 59,797   $ 156,257   $ 178,845  
       Fuel surcharge revenue    8,682    4,785    22,263    11,767  




       Operating revenue (including fuel surcharge)    59,940    64,582    178,520    190,612  
       Logistics and other revenue    4,417    1,148    10,101    2,493  




       Total revenue   $ 64,357   $ 65,730   $ 188,621   $ 193,105  




 
       Capital expenditures, net of proceeds   $ 4,132   $ 11,108   $ 18,217   $ 13,650  
       Total debt and capital lease obligations   $ 47,348   $ 51,024   $ 47,348   $ 51,024  
 
       * Excluding fuel surcharge