-----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, CJoUZUNn2vrsdni7sEidw37kUrOoIP9eEoClrboe5GScVaJglHOYGnBV8fOJAq30 7SfG7CnAp0ZJONEhrLlP/g== 0000881791-97-000005.txt : 19970507 0000881791-97-000005.hdr.sgml : 19970507 ACCESSION NUMBER: 0000881791-97-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970329 FILED AS OF DATE: 19970506 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: 1230 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19791 FILM NUMBER: 97596827 BUSINESS ADDRESS: STREET 1: 9700 HIGGINS RD STE 570 CITY: ROSEMONT STATE: IL ZIP: 60018 BUSINESS PHONE: 8476960200 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 10-Q 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 MARCH 29, 1997, 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 Not applicable (Former name or former address, if changed since the last report) 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 April 16, 1997, 25,797,457 shares of common stock were outstanding. ================================================================================ PART I: FINANCIAL INFORMATION Item 1. Financial Statements. USFreightways Corporation and Subsidiaries Consolidated Balance Sheets (Unaudited) (dollars in thousands)
March 29, December 28, 1997 1996 - --------------------------------------------------------------------------------------------- Assets Current assets: Cash $ 3,403 $ 4,090 Accounts receivable, net 172,075 157,874 Other 46,194 41,613 ---------------------------------- Total current assets 221,672 203,577 ---------------------------------- Net property and equipment 400,367 395,500 Net intangible assets 78,906 79,559 Other 9,695 9,872 ---------------------------------- Total assets $ 710,640 $ 688,508 ---------------------------------- Liabilities and Stockholders' Equity Current liabilities: Current bank debt $ 1,250 $ 333 Accounts payable 44,500 41,734 Other current liabilities 124,410 102,281 ---------------------------------- Total current liabilities 170,160 144,348 ---------------------------------- Long-term liabilities: Long-term bank debt - 78,000 Notes payable 100,000 100,000 Other long-term liabilities 93,011 96,900 ---------------------------------- Total long-term liabilities 193,011 274,900 ---------------------------------- Common stockholders' equity 347,469 269,260 ---------------------------------- Total liabilities and stockholders' equity $ 710,640 $ 688,508 ----------------------------------
USFreightways Corporation and Subsidiaries Consolidated Statements of Income (Unaudited) (dollars in thousands, except per-share amounts)
Three Months Ended ---------------------------------- March 29, March 30, 1997 1996 - ----------------------------------------------------------------------------------------- Operating Revenue $ 355,817 $ 313,705 Operating Expenses: Salaries, wages and benefits 226,956 203,484 Purchased transportation 12,342 10,982 Operating expenses and supplies 47,033 43,492 Operating taxes and licenses 14,973 13,940 Insurance and claims 7,069 5,440 Communications and utilities 4,373 3,691 Depreciation and equipment leases 16,693 15,537 Building and office equipment rents 4,293 3,801 Amortization of intangible assets 653 580 Other operating expenses 2,361 2,346 ----------------------------------- Total operating expenses 336,746 303,293 ----------------------------------- Operating income 19,071 10,412 ----------------------------------- Non-operating income (expense): Interest expense (2,582) (2,916) Interest income 164 174 Other, net 99 (40) ------------------------------------ Total non-operating expense (2,319) (2,782) ------------------------------------ Income before income taxes 16,752 7,630 Income tax expense 7,002 3,281 ------------------------------------ Net Income $ 9,750 $ 4,349 ------------------------------------ Average Shares Outstanding 24,571,349 22,159,747 Earnings per common share: Net Income 0.40 0.20 -------------------------------------
USFreightways Corporation Consolidated Statements of Cash Flows (Unaudited) (dollars in thousands)
------------------------------------------------------------------------------------------------- Three Months Ended ----------------- ----------------- March 29, March 30, 1997 1996 ----------------- ----------------- Cash flows from operating activities: Net income $ 9,750 $ 4,349 Adjustments to net income: Depreciation and amortization 16,784 15,181 Other items affecting cash from operating activities 1,799 (10,848) ----------------- ----------------- Net cash provided by operating activities 28,333 8,682 ----------------- ----------------- Cash flows from investing activities: Capital expenditures, net of proceeds on sales (20,694) (21,217) Acquisition of Transus - (27,265) ----------------- ----------------- Net cash used in investing activities (20,694) (48,482) ----------------- ----------------- Cash flows from financing activities: Dividends paid (2,108) (2,045) Proceeds from sale of common stock 69,760 - Proceeds from sale of treasury stock 1,105 1,052 Proceeds from long-term debt 917 47,000 Payments on long-term bank debt (78,000) (5,056) ----------------- ----------------- Net cash provided by (used in) financing activities (8,326) 40,951 ----------------- ----------------- Net increase (decrease) in cash (687) 1,151 Cash at beginning of period 4,090 1,707 ----------------- ----------------- Cash at end of period $ 3,403 $ 2,858 ================= =================
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 ended March 29, 1997 are not necessarily indicative of the results that may be expected for the 53 week fiscal year ending January 3, 1998. 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 28, 1996. Revenue and Operating Ratios Unaudited (dollars in thousands) Quarter ended March 29, 1997 and March 30, 1996 ------------------------------------ Company (Region) Revenue Operating Ratio(a) - ------------------------------------------------------------------------------- Holland (Midwest) 97 163,730 92.4% 96 139,220 92.7 Red Star (Northeast) 97 46,395 99.8 96 49,084 104.6 Reddaway (West Coast, Northwest) 97 44,986 96.8 96 41,866 97.9 Bestway (Southwest) 97 30,420 88.4 96 27,525 89.9 Dugan (Plains, South) 97 40,568 95.8 96 35,285 99.9 Logistics Operations 97 25,165 94.8 96 18,839 98.1 (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 13 weeks ended March 29, 1997 of $9,750,000, a 124.2% increase over the $4,349,000 which was reported for the 13 weeks which ended March 30, 1996. During the first quarter of the current year, the Company issued an additional 3,105,000 shares of its common stock through a public offering. Net income per share for the 1997 quarter, on an average of 24,591,349 shares, was equivalent to 40 cents per share which is a 100% increase compared to 20 cents per share on 22,159,747 average shares outstanding in the first quarter of 1996. Revenue for the 1997 quarter increased by 13.4% to $355,817,000 from $313,705,000 for the same period of the 1996 year. The regional trucking group increased less-than-truckload (LTL) revenue by 11.5% on an increased LTL shipment count of 7.3% and an LTL tonnage increase of 10.5%. The logistics group continued its substantial growth rates in the current year's first quarter. Revenue for the thirteen weeks of the current year amounted to $25,165,000, an increase of 33.6% and the operating ratio improved to 94.8% from 98.1% compared to 1996. The Company had a significantly improved first quarter compared to the same period of the previous year. All of the operating units improved profitability in the current year's quarter compared to the same period of last year. Net income for the first quarter of the 1996 year was adversely affected, particularly in Red Star territory, because of heavy winter storms in the Northeast. Although the Company experienced ice storms in the Southeast and extensive flooding in the Pacific Northwest last year, the Company had similar conditions in the West this year impacting both Bestway and Reddaway in the month of January. USF Holland achieved record first quarter revenue levels, which resulted in a revenue increase of 17.6% and a 22.9% increase in operating income. The operating ratio improved to 92.4% in the 1997 quarter compared to 92.7% last year. USF Bestway continued its outstanding performance with an operating ratio of 88.4% in the current year compared to 89.9% in the previous year on revenue growth of 10.5%. The demise of Merchants of Texas midway through the first quarter further contributed to the revenue increase at USF Bestway. The improved operating performance at both USF Dugan and USF Reddaway is particularly noteworthy as they have successfully integrated the operations of Transus and United respectively. USF Reddaway recently signed a four year agreement with the Teamsters union which will provide labor stability through the year 2000. Probably the most encouraging turnaround is at USF Red Star where, despite a decline in revenue in the current year's quarter of 5.5%, the operating ratio was reduced from 104.6% in the 1996 quarter to 99.8% in the 1997 quarter. USF Red Star incurred a small loss in the month of January, but produced operating profits both for the months of February and March, primarily as a result of an increase in revenue per LTL shipment to $98.98 in the current year's quarter from $92.29 last year. Each subsidiary has improved its operating income in the current year's quarter. Although the Company is still in a very competitive business, price increases which became effective January 2nd have been reasonably well accepted by the Company's customers and as a result, LTL revenue per shipment increased to $101.99 from $98.17 in the 1996 quarter, equivalent to 3.9%. While the Company is encouraged with the excellent improvement in its operating results, it continues to review and monitor its costs on a recurring basis. Assuming no decline in the current level of economic activity and no significant increase in interest rates, which could negatively impact economic growth, the Company believes it will continue to be one of the leaders in the regional LTL market. The successful completion of the public offering of an additional 3,105,000 shares of the Company's common stock, which was concluded on February 10, 1997, generated approximately $69,000,000, net of expenses in new equity. This additional capital significantly improves the Company's balance sheet as well as its leverage capabilities. While proceeds were used to reduce long term debt, it is the Company's intention to use now available credit facilities to: increase terminal capacity at USF Holland; continue to make additional investments in our fast growing logistics business; and, to make appropriate acquisitions, which will increase density in our regional LTL subsidiaries, particularly at USF Red Star. Capital expenditures for the current year's quarter amounted to approximately $21 million of which $17 million was for revenue equipment and $1 million for terminal facilities. Last year, for the same quarter, capital expenditures approximated $49 million, but that included $27 million for the acquisition of the Transus general commodities business. A dividend of 9 1/3 cents per share was paid on April 4, 1997 to shareholders of record on March 21, 1997. PART II: OTHER INFORMATION Item 1. Legal Proceedings. Other than the Whitworth matter which was reported on by the Company in an 8-K filed on January 7, 1997, 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. 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 (b) Current Reports on Form 8-K were filed: 1. On January 7, 1997 reporting a subsequent litigation matter for the fourth quarter 1996. 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 6th day of May, 1997. 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 Controller and Principal Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----