-----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, VfQmqKjKb5vp7hg/S2mYpfUKZlsjSCOadjWSx3VXghRDR4CcvOZFapqjHUOjZFye oA6/XvITD8r0celji4BIQg== 0000881791-96-000011.txt : 19961115 0000881791-96-000011.hdr.sgml : 19961115 ACCESSION NUMBER: 0000881791-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19961113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: USFREIGHTWAYS CORP CENTRAL INDEX KEY: 0000881791 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 363790696 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19791 FILM NUMBER: 96660876 BUSINESS ADDRESS: STREET 1: 9700 HIGGINS RD STE 570 CITY: ROSEMONT STATE: IL ZIP: 60018 BUSINESS PHONE: 7086960200 MAIL ADDRESS: STREET 1: 9700 HIGGINS ROAD SUITE 570 CITY: ROSEMONT STATE: IL ZIP: 60018 FORMER COMPANY: FORMER CONFORMED NAME: TNT FREIGHTWAYS CORP DATE OF NAME CHANGE: 19930328 10-Q 1 1996 3RD QUARTER 10Q THIS DOCUMENT IS A COPY OF THE 10Q FILED ON NOV. 12, 1996 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION. SECURITIES AND EXCHANGE COMMISSION Washington D. C. 20549 Form 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 28, 1996, OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___________ TO _______________ Commission File Number 0-19791 USFREIGHTWAYS CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-3790696 (State of Incorporation) (IRS Employer Identification No.) 9700 Higgins Road, Rosemont, Illinois 60018 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (847) 696-0200 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 such filing requirements for 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. As of November 11, 1996, 22,545,210 shares of common stock were outstanding. PART I: FINANCIAL INFORMATION Item 1. Financial Statements. USFreightways Corporation Condensed Consolidated Balance Sheets Unaudited (Dollars in thousands) Sept. 28, December 30, 1996 1995 - -------------------------------------------------------------------------------- Assets Current assets: Cash $ 2,189 $ 1,707 Accounts receivable, net 171,174 118,107 Other 42,875 38,797 ----------------- ------------------- Total current assets 216,238 158,611 ----------------- ------------------- Net property and equipment 392,147 338,846 Net intangible assets 80,215 69,918 Other assets 9,759 10,819 ----------------- ------------------- Total assets $ 698,359 $ 578,194 ----------------- ------------------- Liabilities and Stockholders' Equity Current liabilities: Current bank debt $ 983 $ 333 Accounts payable 42,107 36,209 Other current liabilities 115,754 91,942 ----------------- ------------------- Total current liabilities 158,844 128,484 ----------------- ------------------- Long-term liabilities: Long-term bank debt 89,111 37,333 Notes payable 100,000 100,000 Other long-term liabilities 88,042 79,225 ----------------- ------------------- Total long-term liabilities 277,153 216,558 ----------------- ------------------- Common stockholders' equity 262,362 233,152 ----------------- ------------------- Total liabilities and $ 698,359 $ 578,194 stockholders' equity ----------------- ------------------- USFreightways Corporation Consolidated Statements of Income Unaudited (Dollars in thousands, except per-share amounts) Three months ended ------------------------------------- Sept. 28, Sept. 30, 1996 1995 - -------------------------------------------------------------------------------- Operating revenue $ 343,203 $ 289,964 Operating expenses: Salaries, wages and benefits 216,932 186,579 Purchased transportation 12,234 11,133 Operating expenses and supplies 44,434 35,927 Operating taxes and licenses 14,025 12,322 Insurance and claims 5,573 3,821 Communications and utilities 3,790 3,412 Depreciation and revenue 16,777 13,224 equipment leases Building and office equipment rents 4,046 3,357 Amortization of intangible assets 644 583 Other operating expenses 2,220 2,280 ------------------ ------------------ Total operating expenses 320,675 272,638 ------------------ ------------------ Income from operations 22,528 17,326 ------------------ ------------------ Non-operating income (expense): Interest expense (3,322) (2,347) Interest incocome 155 164 Other, net (196) 188 ------------------ ------------------ Total non-operating expense (3,363) (1,995) ------------------ ------------------ Income before income taxes 19,165 15,331 Income tax expense (8,141) (6,592) ------------------ ------------------ Net income $ 11,024 $ 8,739 ------------------ ------------------ Average shares outstanding 22,655,243 22,043,727 Earnings per common share: Net income $ 0.49 $ 0.40 ------------------ ------------------ ------------------------------------- Nine months ended ----------------------------------------- Sept. 28, Sept. 30, 1996 1995 - -------------------------------------------------------------------------------- Operating revenue $ 988,997 $ 856,080 Operating expenses: Salaries, wages and benefits 630,513 546,207 Purchased transportation 35,863 33,163 Operating expenses and supplies 133,592 107,655 Operating taxes and licenses 41,932 36,234 Insurance and claims 17,010 13,749 Communications and utilities 11,475 9,937 Depreciation and revenue 48,099 37,332 equipment leases Building and office equipment rents 11,554 9,962 Amortization of intangible assets 1,821 2,001 Other operating expenses 6,967 6,615 ------------------ -------------------- Total operating expenses 938,826 802,855 ------------------ -------------------- Income from operations 50,171 53,225 ------------------ -------------------- Non-operating income (expense): Interest expense (9,072) (6,491) Interest income 488 543 Other, net (516) (537) ------------------ ------------------- Total non-operating expense (9,100) (6,485) ------------------ ------------------- Income before income taxes 41,071 46,740 Income tax expense (17,561) (20,098) ------------------ ------------------- Net income $ 23,510 $ 26,642 ------------------ ------------------- Average shares outstanding 22,311,770 22,143,964 Earnings per common share: Net income $ 1.05 $ 1.20 ------------------ ------------------- USFreightways Corporation Condensed Consolidated Statements of Cash Flows Unaudited (Dollars in thousands) Nine months ended -------------------------------------- Sept. 28, Sept. 30, 1996 1995 - -------------------------------------------------------------------------------- Cash flows from operating activities: Net Income $ 23,510 $ 26,642 Adjustments to net income: Depreciation and amortization 47,179 36,950 Other items affecting cash from operating activities (16,917) 3,982 ----------------- ------------------ Net cash provided by operating activities 53,772 67,574 ----------------- ------------------ Cash flows from investing activities: Capital expenditures, net of proceeds on sales (70,711) (80,536) Acquisition of Transus and Interamerican (31,265) - ----------------- ------------------ Net cash provided by investing activities (101,976) (80,536) Cash flows from financing activities: Dividends paid (6,149) (6,130) Net (purchases)/sales of treasury stock 2,407 (674) Proceeds from long-term debt 52,650 21,000 Payments on long-term debt (222) (250) ----------------- ------------------ Net cash provided by financing activities 48,686 13,946 ----------------- ------------------ Net increase in cash 482 984 ----------------- ------------------ Cash at beginning of period 1,707 2,055 ----------------- ------------------ Cash at end of period $ 2,189 $ 3,039 ----------------- ------------------ The financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The statements are unaudited but, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The Company's results of operations are affected by the seasonal aspects of the regional LTL trucking business. Therefore, operating results for the three months and nine months ended September 28, 1996 are not necessarily indicative of the results that may be expected for the year ending December 28, 1996. For further information, refer to consolidated financial statements and footnotes thereto included in the registrant's annual report on Form 10-K for the year ended December 30, 1995. USFreightways Corporation Revenue and Operating Ratios Unaudited (Dollars in thousands) Three months ended Sept. 28, 1996 and Sept. 30, 1995 ---------------------------------- Company (Region) Revenue Operating Ratio (a) - -------------------------------------------------------------------------------- Holland (Midwest) 96 $ 153,725 90.6% 95 131,280 91.9 Red Star (Northeast) 96 48,571 101.6 95 50,778 102.2 Reddaway (West Coast, 96 46,383 92.2 Northwest) 95 43,395 90.6 Bestway (Southwest) 96 28,416 88.9 95 27,184 90.9 Dugan (Plains, South) 96 38,543 96.1 95 19,304 93.6 Logistics Operations 96 22,969 94.7 95 16,798 94.8 Nine months ended Sept. 28, 1996 and Sept. 30, 1995 ---------------------------------- Company (Region) Revenue Operating Ratio (a) - -------------------------------------------------------------------------------- Holland (Midwest) 96 $ 440,800 91.4% 95 397,250 91.4 Red Star (Northeast) 96 147,961 102.8 95 149,580 100.0 Reddaway (West Coast, 96 132,506 94.6 95 121,666 92.6 Bestway (Southwest) 96 84,321 89.4 95 80,297 90.3 Dugan (Plains, South) 96 111,755 97.8 95 57,099 92.5 Logistics Operations 96 62,073 97.3 95 46,852 95.4 (a) Operating ratio is direct operating costs as a percentage of revenue. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. USFreightways Corporation (the "Company") reported net income for the thirteen weeks ended September 28, 1996 of 49 cents per share compared to 40 cents for the third quarter of 1995 which ended on September 30th. Net income for the 1996 quarter was $11,024,000 compared to $8,739,000 for the same period of last year, an increase of 26%. Revenue in the 1996 quarter increased by 18.4% to $343,203,000 from $289,964,000 for the same period of the 1995 year. The current year's revenue includes approximately $21,000,000 attributable to the acquisition of the Transus general commodities business and the Interamerican Group. The regional trucking group increased Less Than Truckload (LTL) revenue by 16.1% based on increased LTL shipments of 15.2% and an LTL tonnage increase of 17.4%. Revenue for the logistics group increased in the current year's quarter by 37% primarily as a result of the acquisition of Interamerican and additional contracts in the Logix group. Revenue for the nine months ended September 28, 1996 amounted to $988,997,000, an increase of 15.5% over the same period of the previous year. Net income for the nine month period ended in 1996 amounted to $23,510,000, equivalent to $1.05 per share compared to $1.20 for the 1995 nine month period. The Company is pleased to report a significant increase in net income for the current year's quarter, after two quarters of reduced net income when compared to the same quarters of the previous year. Net income for the first half of 1996 was adversely impacted by severe industry competitive pricing and a somewhat sluggish economy. Collectively, the operating ratios of the regional trucking group improved from 93.7% in the 1995 quarter to 93.1% in the current year's quarter. USF Holland, the Company's largest regional trucking subsidiary, had an outstanding quarter reducing its operating ratio from 91.9% for the 1995 quarter to 90.6% on an increase in revenue of 17.1%. USF Bestway improved its operating ratio for the fourth consecutive quarter. The ratio for the current year's quarter of 88.9% as well as the year-to-date 89.4% is a tribute to its management and associates. The operating ratios for USF Reddaway and USF Dugan improved significantly compared to the first and second quarter of the current year, but were higher than the same quarter of the 1995 calendar year, primarily as a result of continued price cutting by a major competitor in Reddaway's territory and because of the acquisition of the Transus business by Dugan. The Company's logistics business, including USF Distribution, increased revenue by 37% while maintaining an operating ratio in the current year's quarter consistent with that in the 1995 quarter. Logix acquired Interamerican effective July 1, 1996. Interamerican provides warehousing, transportation, distribution and other logistics services for their customers using proprietary leading edge technology. The Company's truckload subsidiary, Comet, continued to show satisfactory progress increasing revenue during the current quarter, and although it recorded a small loss for the quarter, it is currently operating on a profitable basis. The improvement in the operating results at USF Red Star reported in the first and second quarter continued in the third quarter of the current year. The operating ratio in the current year has been reduced from 104.6% in the first quarter to 102.3% in the second quarter to 101.6% in the third quarter. Results of operations for the third quarter of the current year resulted in a reduced loss compared to the same quarter of the 1995 calendar year despite a 4.3% reduction in revenue. In addition to making a significant reduction in operating costs, management at Red Star has successfully improved yield by increasing revenue per shipment from $90.18 in the 1995 quarter to $94.17 in the current year's quarter. This improvement in yield together with a lower cost per shipment because of strict cost control has resulted in the improved operating results for the quarter and a reduction in the operating ratio to 101.6% in the current year compared to 102.2% in 1995. The Company expects a restructuring of Red Star, to be completed in the fourth quarter of the current calendar year. The final stages of the restructuring will require some terminal consolidation and changes in Red Star's linehaul configuration. When the restructuring is completed, the Company expects to take a one time charge of approximately 10 cents per share which the Company anticipates will occur in the last quarter of the current year. The management at Red Star is to be complimented for the significant improvement in its on-time service performance and its operating results. All subsidiaries' operating income has been impacted by the increase in fuel prices during the current year's quarter; however, fuel surcharges were implemented in the last month of the quarter and will remain in effect until fuel prices return to more normal levels. These surcharges, which will vary as the price of diesel fuel changes, should offset any future increases in fuel prices. The results for the current year's quarter benefited from a stronger economy, compared to the first and second quarter of the current year, and an improved pricing environment. These factors contributed to an increase in revenue per LTL shipment in the Company's regional trucking operations of 1% and this, together with the Company's continued emphasis on reducing its costs, resulted in improved profitability. Capital expenditures for the nine months ended September 28, 1996 approximated $101,000,000 which included $27,000,000 for the acquisition of the general commodities business of Transus. For the nine month period ended September 30, 1995, total capital expenditures were approximately $83,000,000. A dividend of 9 1/3 cents per share was paid on October 4, 1996 to shareholders of record on September 20, 1996. PART II: OTHER INFORMATION Item 1. Legal Proceedings. There are no pending material legal proceedings, other than ordinary litigation incident to the Company's business, which the Company is a party to or which any of its property is subject. During the third quarter of 1996, no material litigation or governmental proceeding was instituted or pending against the Company arising from any alleged violation of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) or other environmental regulations. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 1. Exhibit 27-Financial Data Schedule. (b) Current Reports on Form 8-K were filed: 1. No current reports on Form 8-K were filed during the quarter. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated the 11th day of November, 1996. USFREIGHTWAYS CORPORATION By: /s/ Christopher L. Ellis Christopher L. Ellis Senior Vice President, Finance and Chief Financial Officer By: /s/ Robert S. Owen Robert S. Owen Vice President and Controller and Principal Accounting Officer EX-27 2 FDS --
5 1000 9-Mos Dec-28-1996 Dec-31-1995 Sep-28-1996 2,189 0 171,174 0 0 216,238 392,147 0 698,359 158,844 100,000 0 0 0 262,362 698,359 0 988,997 0 938,826 0 0 9,072 41,071 17,561 0 0 0 0 23,510 1.05 0
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