-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E1oebfBbmymYDisVobH7Uk8IZpSdy67LiQkGCW57UldZzYkE9nZjWprAciQKCmqw JHBktu53HBiRQNLaJAwKaA== 0000950147-96-000537.txt : 19961118 0000950147-96-000537.hdr.sgml : 19961118 ACCESSION NUMBER: 0000950147-96-000537 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SWIFT TRANSPORTATION CO INC CENTRAL INDEX KEY: 0000863557 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 860666860 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18605 FILM NUMBER: 96662654 BUSINESS ADDRESS: STREET 1: 5601 W MOHAVE CITY: PHOENIX STATE: AZ ZIP: 85043 BUSINESS PHONE: 6022699700 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 _________________________________ Form 10-Q (Mark One) ( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 or ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-18605 Swift Transportation Co., Inc. (Exact name of registrant as specified in its charter) Nevada 86-0666860 (State or other jurisdiction of (I.R.S. employer identification incorporation or organization) number) 1455 Hulda Way Sparks, NV 89431 (702) 359-9031 (Address, including zip code, and telephone number, including area code, of registrant's principal executive office) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. YES X NO ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date (November 13, 1996) Common stock, $.001 par value: 25,002,084 shares PART I FINANCIAL INFORMATION
Page Number Item 1. Financial statements Condensed consolidated balance sheets as of September 30, 1996 (unaudited) and December 31, 1995 1 - 2 Condensed consolidated statements of earnings (unaudited) for the three month and nine month periods ended September 30, 1996 and 1995 3 Condensed consolidated statements of cash flows (unaudited) for the nine month periods ended September 30, 1996 and 1995 4 - 5 Notes to condensed consolidated financial statements 6 - 7 Item 2. Management's discussion and analysis of financial condition and results of operations 8 - 14 PART II OTHER INFORMATION Page Number Items 1, 2, 3, 4 and 5. Not applicable Item 6. Exhibits and Reports on Form 8-K 15
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES Condensed consolidated balance sheets (dollars in thousands)
September 30, December 31, 1996 1995 ------------- ------------ (unaudited) Assets ------ Current assets: Cash and cash equivalents $ 4,616 $ 2,627 Accounts receivable, net 72,579 55,897 Equipment sales receivables 7,608 596 Inventories and supplies 5,094 3,223 Prepaid taxes, licenses and insurance 6,963 4,964 Assets held for sale 4,083 --- Current deferred tax asset 3,370 1,250 -------- -------- Total current assets 104,313 68,557 -------- -------- Property and equipment, at cost: Revenue and service equipment 297,260 259,362 Land 7,714 10,226 Facilities and improvements 49,394 35,936 Furniture and office equipment 12,032 10,295 -------- -------- Total property and equipment 366,400 315,819 Less accumulated depreciation and amortization 93,008 82,946 -------- -------- Net property and equipment 273,392 232,873 Contracts receivable 243 349 Other assets 1,004 590 Goodwill 9,625 8,939 -------- -------- $388,577 $311,308 ======== ========
See accompanying notes to condensed consolidated financial statements. Page 1 SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES Condensed consolidated balance sheets (continued) (dollars in thousands, except share and per share amounts)
September 30, December 31, 1996 1995 ------------- ------------ (unaudited) Liabilities and Stockholders' Equity - ------------------------------------ Current liabilities: Accounts payable $ 18,806 $ 13,089 Accrued liabilities 29,786 15,508 Claims accruals 15,047 10,457 Current portion of long-term debt 24,086 22,768 -------- -------- Total current liabilities 87,725 61,822 -------- -------- Borrowings under revolving line of credit 40,000 11,750 Long-term debt, less current portion 52,010 57,204 Claims accruals 19,209 13,647 Deferred income taxes 32,910 32,050 Stockholders' equity: Preferred stock, par value $.001 per share Authorized 1,000,000 shares; none issued -- -- Common stock, par value $.001 per share Authorized 75,000,000 shares; issued 25,221,784 and 24,877,534 shares at September 30, 1996 and December 31, 1995, respectively 25 25 Additional paid-in capital 48,979 45,885 Retained earnings 111,135 92,341 -------- -------- 160,139 138,251 Less 220,700 shares of treasury stock, at cost 3,416 3,416 -------- -------- Net stockholders' equity 156,723 134,835 -------- -------- Contingencies -------- -------- $388,577 $311,308 ======== ========
See accompanying notes to condensed consolidated financial statements. Page 2 SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES Condensed consolidated statements of earnings (unaudited) (in thousands, except per share amounts)
Three months Nine months ended September 30, ended September 30, 1996 1995 1996 1995 --------- --------- --------- --------- Operating revenue $ 146,739 $ 118,463 $ 408,473 $ 337,118 Operating expenses: Salaries, wages and employee benefits 49,539 44,511 145,071 126,470 Operating supplies and expenses 13,575 10,373 37,830 29,850 Fuel and fuel taxes 18,846 14,601 55,176 44,690 Purchased transportation 18,968 11,916 50,538 28,600 Rental expense 7,295 6,676 21,788 18,997 Insurance and claims 5,416 3,373 14,886 9,630 Depreciation and amortization 8,680 7,976 25,539 23,335 Communication and utilities 2,100 2,046 6,052 5,655 Operating taxes and licenses 4,592 4,858 14,188 14,001 --------- --------- --------- --------- Total operating expenses 129,011 106,330 371,068 301,228 --------- --------- --------- --------- Operating income 17,728 12,133 37,405 35,890 --------- --------- --------- --------- Other (income) expenses: Interest expense 1,830 1,753 5,269 5,421 Interest income (9) (35) (48) (53) Other (119) (119) (400) (372) --------- --------- --------- --------- Other (income) expenses, net 1,702 1,599 4,821 4,996 --------- --------- --------- --------- Earnings before income taxes 16,026 10,534 32,584 30,894 Income taxes 6,575 4,520 13,790 13,130 --------- --------- --------- --------- Net earnings $ 9,451 $ 6,014 $ 18,794 $ 17,764 ========= ========= ========= ========= Net earnings per common and equivalent share $ .37 $ .24 $ .74 $ .70 ========= ========= ========= ========= Shares used in per share calculations 25,556 25,363 25,488 25,342 ========= ========= ========= =========
See accompanying notes to condensed consolidated financial statements. Page 3 SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES Condensed consolidated statements of cash flows (unaudited) (in thousands)
Nine months ended September 30, 1996 1995 -------- -------- Cash flows from operating activities: Net earnings $ 18,794 $ 17,764 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization 25,539 23,335 Deferred income taxes (1,260) 4,530 Provision for losses on accounts receivable 180 645 Amortization of deferred compensation 18 40 Change in assets and liabilities: Increase in accounts receivable (16,862) (11,852) (Increase) decrease in inventories and supplies (1,871) 790 Increase in prepaid expenses (1,777) (830) (Increase) decrease in other assets (424) 258 Increase in accounts payable, accrued liabilities and claims accruals 30,147 7,351 -------- -------- Net cash provided by operating activities 52,484 42,031 -------- -------- Cash flows from investing activities: Proceeds from sale of property and equipment 22,994 36,736 Capital expenditures (93,979) (50,240) Cash expended for purchase of Navajo Shippers (5,148) -- Payments received on contracts receivable 106 91 -------- -------- Net cash used in investing activities (76,027) (13,413) -------- --------
See accompanying notes to condensed consolidated financial statements Page 4 SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES Condensed consolidated statements of cash flows (continued) (unaudited) (in thousands)
Nine months ended September 30, 1996 1995 -------- -------- Cash flows from financing activities: Repayments of long-term debt $(18,902) $(18,641) Proceeds from issuance of long-term debt 15,026 --- Increase (decrease) in borrowings under revolving line of credit 28,250 (7,227) Proceeds from issuance of common stock under stock option and stock purchase plans 1,158 1,246 Purchase of treasury stock --- (2,371) -------- -------- Net cash provided by (used in) financing activities 25,532 (26,993) -------- -------- Net increase in cash 1,989 1,625 Cash at beginning of period 2,627 4,033 -------- -------- Cash at end of period $ 4,616 $ 5,658 ======== ======== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 5,085 $ 5,560 Income taxes $ 5,150 $ 6,928 Supplemental schedule of noncash investing and financing activities: Equipment sales receivables $ 7,608 $ 3,762 Direct financing for purchase of equipment --- 34,010 Issuance of 90,000 shares of common stock in connection with the purchase of Navajo Shippers $ 1,918 $ ---
Page 5 SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES Notes to condensed consolidated financial statements (unaudited) Note 1 Basis of Presentation The condensed consolidated financial statements include the accounts of Swift Transportation Co., Inc., a Nevada holding company, and its wholly-owned subsidiaries (the Company). All significant intercompany balances and transactions have been eliminated. The financial statements have been prepared in accordance with generally accepted accounting principles, pursuant to rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying financial statements include all adjustments which are necessary for a fair presentation of the results for the interim periods presented. Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed consolidated financial statements and notes thereto be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. Results of operations in interim periods are not necessarily indicative of results to be expected for a full year. Note 2. Contingencies The Company is involved in certain claims and pending litigation arising from the normal course of business. Based on the knowledge of the facts and, in certain cases, opinions of outside counsel, management believes the resolution of claims and pending litigation will not have a material adverse effect on the financial condition of the Company. Note 3. Revolving Line of Credit On September 30, 1996 the Company amended its Credit Agreement to extend the maturity date of its revolving line of credit from September 30, 1997 to November 15, 1997. The Company is in final negotiations for a line of credit with maximum borrowings ranging from $100 to $125 million. The Company anticipates that a portion of the line of credit will be used to pay off existing secured revenue equipment debt with current rates exceeding the proposed line of credit rate. The new line will also be used for funding letters of credit of approximately $12 million. The proposed line of credit covenants will include limitations on funded debt (as defined) to earnings before interest, taxes and depreciation and amortization and will require a minimum debt service coverage ratio. Page 6 SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES Notes to condensed consolidated financial statements (unaudited) Note 4. Acquisition On September 12, 1996, the Company acquired substantially all of the operating assets utilized in the dry freight van division of Navajo Shippers, Inc. and two of its wholly-owned subsidiaries, Digby Leasing and Digby-Ringsby Truck Lines, Inc. (collectively, "Navajo Shippers"). The acquisition was accounted for as a purchase and the results of operations of Navajo Shippers have been included in the consolidated financial statements beginning on September 12, 1996. The Company acquired 287 tractors and related on-board communication equipment. The Company assumed Navajo Shipper's position on operating leases for 257 tractors and acquired 30 owner operators. Total consideration for the assets purchased and goodwill is approximately $7.1 million consisting of cash of approximately $5.1 million and 90,000 shares of the Company's common stock valued at $2.0 million. The Company will pay the sellers approximately $1.2 million for commissions on revenues expected to be generated by the Company in the 12 months following the date of acquisition. Such amount has been accounted for as goodwill. Goodwill will be amortized on a straight-line basis over 15 years. Page 7 SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview The trend in the truckload segment of the motor carrier industry over the past several years has been towards shippers' use of a relatively small number of financially stable "core carriers". This trend has resulted in consolidation of the truckload industry. However, the truckload industry remains highly fragmented. Management believes that this industry trend towards core carriers will continue and will result in continued industry consolidation. In response to this trend, the Company has expanded its fleet to 4,674 tractors as of September 30, 1996 from 3,846 tractors as of September 30, 1995. This net fleet growth was accomplished through a combination of internal growth and the acquisition in September 1996 of substantially all of the operating assets utilized in the dry freight van division of Navajo Shippers, Inc., and two of its wholly-owned subsidiaries, Digby Leasing and Digby-Ringsby Truck Line, Inc. (collectively, "Navajo Shippers"). The acquisition added 287 tractors including 30 owner operators. The Company's owner operator fleet (including the 30 acquired in the acquisition) increased to 659 as of September 30, 1996 from 447 as of September 30, 1995. Results of Operations Three Months Ended September 30, 1996 compared to three months ended - --------------------------------------------------------------------- September 30, 1995 - ------------------ Operating revenue increased $28.3 million or 23.9% to $146.7 million for the three months ended September 30, 1996 from $118.5 million for the corresponding period of 1995. The increase in operating revenue is primarily the result of the expansion of the Company's fleet. The Company's operating ratio (operating expenses expressed as a percentage of operating revenue) for the third quarter of 1996 was 87.9% compared to 89.8% in the comparable period of 1995. The Company's operating revenue and operating ratio for the three months ended September 30, 1996 improved as a result of improved shipper demand. The Company's empty mile factor was 13.7% and 13.4% and average linehaul revenue per mile was $1.111 and $1.112 in the third quarter of 1996 and 1995, respectively. Significant differences in the components of operating expenses as a percentage of operating revenue are explained below. Salaries, wages and employee benefits represented 33.8% of operating revenue for the three months ended September 30, 1996 compared with 37.6% for the third quarter of 1995. The decrease is due primarily to expansion of the Company's owner operator fleet (see discussion of purchased transportation below) and to overall reduction in workers' compensation costs under the Company's self-insurance program. Page 8 From time to time the industry has experienced shortages of qualified drivers. If such a shortage were to occur over a prolonged period and increases in driver pay rates were to occur in order to attract and retain drivers, the Company's results of operations would be negatively impacted to the extent that corresponding freight rate increases were not obtained. Fuel as a percentage of operating revenue was 12.8% for the third quarter of 1996 versus 12.3% for the corresponding quarter of 1995 even though the increase in fuel costs were offset in part by an increase in the number of owner operators who are responsible for their own fuel. Actual fuel cost per gallon increased by approximately 12 cents per gallon in the third quarter of 1996 versus the third quarter of 1995. On April 11, 1996, the Company implemented a fuel surcharge program which recovered approximately one-half of the increase in fuel cost. Increases in fuel costs (including fuel taxes), to the extent not offset by rate increases or fuel surcharges, could have an adverse effect on the operations and profitability of the Company. Management believes that the most effective protection against fuel cost increases is to maintain a fuel efficient fleet and to implement fuel surcharges when such option is necessary and available. Therefore, the Company does not use derivative-type hedging products. Purchased transportation as a percentage of operating revenue was 12.9% for the three months ended September 30, 1996 compared to 10.1% in 1995. The increase is due to the growth of the owner operator fleet to 659 as of September 30, 1996 from 447 as of September 30, 1995. Rental expense as a percentage of operating revenue was 5.0% of the third quarter of 1996 versus 5.6% for the third quarter of 1995. At September 30, 1996 and 1995 leased tractors represented 65% and 46%, respectively, of the total fleet of Company tractors. When it is economically advantageous to do so, the Company will purchase then sell tractors that it currently leases by exercising the purchase option contained in the lease. Gains on these activities are recorded as a reduction of rent expense. During the third quarter of 1996 and 1995, respectively, the Company recorded gains of approximately $1.3 million and $752,000 from the sale of leased tractors. Depreciation and amortization expense as a percentage of operating revenue was 5.9% in the third quarter of 1996 versus 6.7% in the corresponding quarter of 1995. The Company includes gains and losses from the sale of owned revenue equipment in depreciation and amortization expense. During the three month period ended September 30, 1996, net gains from the sale of revenue equipment reduced depreciation and amortization expense by approximately $770,000 compared to approximately $530,000 in the third quarter of 1995. Exclusive of gains, which reduced depreciation and amortization expense, the percentage in the third quarter of 1996 and 1995 to operating revenue was 6.4% and 7.2%, respectively. The decrease in 1996 is due to expansion of the owner operator fleet and due to the increase in the percentage of leased equipment versus owned equipment as discussed above. Page 9 The Company is replacing substantially all of its fleet of double van trailers with 13'-6" high 53 foot trailers to be used in the Eastern United States and 14' high 53 foot trailers to be used in the Western United States. Management believes that this conversion to a standardized fleet of 53' trailers will provide cost reductions such as lower licensing costs, simplified driver training and increased equipment utilization. The conversion to a standardized fleet of 53' trailers will result in the sale of substantially all of the Company's fleet of double van trailers. While the Company believes that the market value of its double van trailer fleet is currently greater than the book value, there can be no assurance the market value of such equipment will not decline or that the sale of such equipment will result in gains. The sale of the Company's double van trailer fleet may result in significant fluctuations in the amount of gains or losses recorded in any given quarter. The amount of such gains or losses recorded in a particular quarter will be dependent upon the quantity of trailers sold and the prevailing market prices for used trailering equipment. Insurance and claims expense represented 3.7% and 2.8% of operating revenue in the third quarter of 1996 and 1995, respectively. The Company's insurance program for liability, physical damage and cargo damage involves self-insurance with varying risk retention levels. Claims in excess of these risk retention levels are covered by insurance in amounts which management considers adequate. The Company accrues the estimated cost of the uninsured portion of pending claims. These accruals are estimated based on management's evaluation of the nature and severity of individual claims and an estimate of future claims development based on historical claims development trends. Nine Months Ended September 30, 1996 Compared to the Nine Months Ended - ---------------------------------------------------------------------- September 30, 1995 - ------------------ Operating revenue increased $71.4 million, or 21.2%, to $408.5 million for the nine months ended September 30, 1996 from $337.1 million for the corresponding period of the previous year. The increase in operating revenue is due primarily to the expansion of the Company's fleet to 4,674 tractors at September 30, 1996 from 3,846 at September 30, 1995. The Company's operating ratio was 90.8% and 89.3% in the first nine months of 1996 and 1995, respectively. The Company's operating revenue and operating ratio for the nine months ended September 30, 1996 was impacted by overall soft shipper demand in the first four months of 1996, harsh winter conditions and an increase in fuel costs. This resulted in lower equipment utilization and a slightly lower revenue per mile. The Company's empty mile factor was 13.9% and 14.0% and the average rate per mile was $1.102 and $1.110 for the nine months ended September 30, 1996 and 1995, respectively. Salaries, wages and employee benefits represented 35.5% of operating revenue for the nine months ended September 30, 1996 compared with 37.5% for the comparable period of 1995. The improvement is due primarily to the increase in owner operators. Page 10 Purchased transportation represented 12.4% and 8.5% of operating revenue for the nine months ended September 30, 1996 and 1995, respectively. This increase is the result of the growth of the Company's owner operator fleet from 447 at September 30, 1995 to 659 at September 30, 1996. Rental expense as a percentage of operating revenue was 5.3% for the first three quarters of 1996 versus 5.6% for the first three quarters of 1995. When it is economically feasible to do so, the Company will purchase then sell tractors it leases by exercising the purchase option contained in the lease. Gains on these activities are recorded as a reduction of rent expense. During the first three quarters of 1996 and 1995, respectively, the Company recorded gains of approximately $3.2 million and $1.6 million from the sale of leased tractors. Depreciation and amortization expense was 6.3% of operating revenue for the nine months ended September 30, 1996 versus 6.9% for the comparable period in 1995. During the nine months ended September 30, 1996 the Company recorded gains on the sale of revenue equipment of $1.5 million compared with approximately $2.5 million in the first nine months of 1995. Exclusive of gains, which reduced depreciation and amortization expense, the percentage in the first nine months of 1996 and 1995 to operating revenue was 6.6% and 7.7%, respectively. Insurance and claims expense represented 3.6% and 2.9% of operating revenue in the first nine months of 1996 and 1995, respectively. The Company's insurance program for liability, physical damage and cargo damage involves self-insurance with varying risk retention levels. Claims in excess of these risk retention levels are covered by insurance in amounts which management considers adequate. The Company accrues the estimated cost of the uninsured portion of pending claims. These accruals are estimated based on management's evaluation of the nature and severity of individual claims and an estimate of future claims development based on historical claims development trends. Inflation Inflation can be expected to have an impact on the Company's operating costs.* A prolonged period of inflation would cause interest rates, fuel, wages and other costs to increase and would adversely affect the Company's results of operations unless freight rates could be increased correspondingly. However, the effect of inflation has been minimal over the past three years. Forward-Looking Statements This Report on Form 10-Q 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. See "Liquidity and Capital Resources" for discussions of important factors that may affect the validity of such forward-looking statements. Additional factors that may affect the validity of forward-looking statements are set forth in "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. * Contains "Forward-Looking Statements". Page 11 Liquidity and Capital Resources The growth in the Company's business has required significant investment in new revenue equipment, upgraded and expanded facilities, and enhanced computer hardware and software. The funding for this expansion has been from cash provided by operating activities, proceeds from the sale of revenue equipment, long-term debt, borrowings on the Company's revolving line of credit, the use of operating leases to finance the acquisition of revenue equipment and from public offerings of common stock. Net cash provided by operating activities was $52.5 million in the first nine months of 1996 compared to $42.0 million in the first nine months of 1995. The increase is primarily attributable to increases in accounts payable, accrued liabilities and claims accruals offset primarily by increases in accounts receivable. Net cash used in investing activities increased to $76.0 million in the first nine months of 1996 from $13.4 million in the first nine months of 1995. The increase is due primarily to larger increases for the purchases of revenue equipment and for facilities and improvements, which were offset by smaller proceeds from sale of property and equipment. Cash expended for investment activities also includes $5.1 million expended for the purchase of Navajo Shippers. Accounts receivable increased to $72.6 million at September 30, 1996 from $55.9 million at December 31, 1995. The increase is primarily due to a $25.7 million increase in revenues from to third quarter 1996 as compared to the fourth quarter of 1995. Equipment sales receivables increased $7.5 million from December 31, 1995 to September 30, 1996. The increase is primarily attributable to sales of revenue equipment disposed of in connection with the Company's normal policy of replacing tractors in service every three years. Revenue and service equipment increased to $297.3 million at September 30, 1996 from $259.4 million at December 31, 1995 primarily due to the purchase of revenue equipment acquired in the acquisition of Navajo Shippers and to the purchase of approximately 2,800 trailers in the first nine months of 1996. As described above, the Company is replacing its double-van trailer configurations with 53 foot vans. Such purchases were offset by a decrease in owned tractors from 1,821 at September 30, 1995 to 1,416 at September 30, 1996. As of September 30, 1996, the Company had commitments outstanding to acquire replacement and additional revenue equipment for approximately $140 million. The Company has the option to cancel such commitments upon 60 days notice. The Company believes it has the ability to obtain debt and lease financing and generate sufficient cash flows from operating activities to support these acquisitions of revenue equipment.* * Contains "Forward-Looking Statements". Page 12 During the first three quarters of 1996, the Company incurred approximately $18.7 million of non-revenue equipment capital expenditures. These expenditures were primarily for the completion of the construction of the Company's terminal facility in Edwardsville, Kansas and for construction of the Company's new headquarters facility in Phoenix, Arizona. In the third quarter of 1996, the Company relocated its corporate headquarters facility to the newly constructed facility. The former headquarters facility is currently held for sale and the net assets are reflected as such on the accompanying consolidated balance sheets. The Company anticipates that it will expend approximately $25 million through December 1997 to complete construction of the Company's new headquarters facility for various facilities upgrades and acquisitions of terminal facilities.* Factors such as costs and opportunities for future terminal expansions may change the amount of such expenditures. The funding for capital expenditures has been and will be from a combination of cash provided by operating activities, long-term debt including $15 million borrowed to finance the new Phoenix headquarters facility, amounts available under the Company's revolving line of credit and lease financing.* The availability of capital for revenue equipment and other capital expenditures will be affected by prevailing market conditions and the Company's financial condition and results of operations. Net cash provided by financing activities amounted to $25.5 million in the first three quarters of 1996 compared to net cash used in financing activities of $27.0 million in the first half of 1995. In 1996, the increase in cash provided by financing activities is due to increases in borrowings under the revolving line of credit and long-term debt net of repayments of long-term debt. The net use of cash in financing activities in 1995 was primarily the result of repayments of long-term debt of $18.7 million and reductions in borrowings under the revolving line of credit of $7.3 million. On September 30, 1996 the Company amended its Credit Agreement to extend the maturity of its revolving line of credit from September 30, 1997 to November 15, 1997. The Company is in final negotiations for a line of credit with maximum borrowings ranging from $100 to $125 million. The Company anticipates that a portion of the proposed line of credit will be used to pay off existing secured revenue equipment debt with current interest rates exceeding the proposed line of credit rate.* The new line will also be used for funding letters of credit of approximately $12 million. Management believes that it will be able to finance its needs for working capital, facilities improvements and expansion, as well as anticipated fleet growth by additional revenue equipment acquisitions and additional strategic acquisitions as opportunities become available through cash flows from future operations, borrowings available under current or replacement revolving line of credit and through long-term debt and operating lease financing believed to be available to finance revenue equipment acquisitions.* Over the long term, the Company will continue to have significant * Contains "Forward-Looking Statements". Page 13 capital requirements, which may require the Company to seek additional borrowings or equity capital. The availability of debt financing or equity capital will depend upon the Company's financial condition and results of operations as well as prevailing market conditions, the market price of the Company's common stock and other factors over which the Company has little or no control. Seasonality In the transportation industry, results of operations generally show a seasonal pattern as customers reduce shipments during and after the winter holiday season. The Company's operating expenses also tend to be higher in the winter months primarily due to increased operating costs in colder weather and higher fuel consumption due to increased idle time. * Contains "Forward-Looking Statements". Page 14 SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES PART II OTHER INFORMATION Items 1, 2, 3, 4 and 5. Not applicable Item 6. Exhibits and reports on Form 8-K (a) Exhibit 11 - Schedule of Computation of Net Earnings Per Share (see attached) Exhibit 27 - Financial Data Schedule (b) No reports on Form 8-K have been filed during the quarter for which this report is filed. SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Swift Transportation Co., Inc. Date: November 13, 1996 /s/ William F. Riley III ------------------------------ (Signature) William F. Riley III Chief Financial Officer Page 15 EX-11 2 SCHEDULE OF COMPUTATION OF NET EARNINGS PER SHARE EXHIBIT 11 SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES Schedule of Computation of Net Earnings Per Share (in thousands, except share and per share amounts)
Three months Nine months ended September 30, ended September 30, 1996 1995 1996 1995 ----------- ----------- ---------- ---------- Net earnings $ 9,451 $ 6,014 $ 18,794 $ 17,764 =========== =========== ========== ========== Weighted average shares: Common shares outstanding 24,863 24,620 24,778 24,551 Common equivalent shares issuable upon exercise of employee stock options (1) 693 743 710 791 ----------- ----------- ---------- ---------- Total weighted average shares - primary 25,556 25,363 25,488 25,342 Incremental common equivalent shares (calculated using the higher of the end of period or average fair market value (2) 23 -- 46 -- ----------- ----------- ---------- ---------- Total weighted average shares - fully diluted 25,579 25,363 25,534 25,342 =========== =========== =========== =========== Net earnings per common and equivalent share $ .37 $ .24 $ .74 $ .70 =========== =========== =========== =========== Net earnings per common share - assuming full dilution $ .37 $ .24 $ .74 $ .70 =========== =========== =========== ===========
Notes: (1) Amount calculated using the treasury stock method and average fair market values. (2) The calculation is submitted in accordance with Regulation S-K Item 601(b) (11) although not required by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%. EX-27 3 FDS -- 3RD QUARTER 10Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS 0000863557 SWIFT TRANSPORTATION CO., INC. 1,000 US DOLLARS 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 1 4,616 0 72,579 0 5,094 104,313 366,400 93,008 388,577 87,725 0 0 0 25 156,698 388,577 408,473 408,473 0 371,068 (448) 0 5,269 32,584 13,790 18,794 0 0 0 18,794 .74 .74
-----END PRIVACY-ENHANCED MESSAGE-----