Roadway Corporation Reports First Quarter Results
AKRON, Ohio--April 9, 2002--Roadway Corporation today reported that revenues for its first quarter, which ended March 23, 2002, were $637,168,000, down 2% when compared to revenues of $650,485,000 for the first quarter of 2001. The motor carrier reported a net loss of $1,749,000, or $0.09 per share, compared to net income of $4,990,000, or $0.26 per share (diluted), for the first quarter of 2001.Michael W. Wickham, Chairman of the Board of Directors and CEO of Roadway Corporation, stated, "Continuing sluggishness in the economy, combined with our traditionally slow first quarter resulted in business levels substantially lower than we anticipated. As a result, operating income was well below last year."
"In the first four weeks of January, daily tonnage levels at Roadway Express, our largest operating unit, were 18% below the same period last year, and at their lowest point in fifteen years. For the balance of the quarter, Roadway Express saw tonnage levels improve. In our four week February accounting period, daily tonnage improved 8% over January's levels. And in March, daily tonnage was up 12% over January. For the quarter, daily tonnage was 14.5% below last year's levels. Excluding January, Roadway Express' performance met operating income expectations and was on budget. During the quarter, freight rate levels continued to hold firm," Wickham said.
"At New Penn Motor Express, volume levels improved following the February closure of a significant competitor. These increases did not offset the tonnage declines New Penn experienced in January and the first half of February. The subsequent reduction of next-day capacity in the Northeast appears to have returned New Penn to business levels comparable to those of a year ago. From an operating standpoint, New Penn was solidly profitable," Wickham added.
"During the quarter, Arnold Transportation Services, the Corporation's truckload carrier, experienced business levels similar to those of last year and also showed positive operating results," Wickham stated.
"We were able to effectively manage variable costs against these lower business levels. However, interest related to our November 30, 2001 acquisition of Arnold Industries was greater than the quarter's operating profit. Take away the severe declines of our shortened, eighteen-day January operating period, and the Company would have been profitable. Importantly, we didn't make radical changes that would cut customer service capabilities or prevent us from taking advantage of an economic upturn, when it comes," Wickham continued.
"Despite a poor start to the year, we remain confident in our solid financial position and our strategic plans for future growth. Looking at the balance of the year, the Corporation's operating results will be heavily dependent on a recovery in the general economy and are expected to show year-over-year margin improvement. Assuming that underlying economic conditions improve, and business volumes return to 2001 levels over the balance of 2002, the Corporation expects its operating ratio, on a combined basis, to improve by one-half to one percent over last year," Wickham concluded.
The following Condensed Statements of Consolidated Income and Consolidated Cash Flows for the first quarter, ended March 23, 2002, include the results of operations for New Penn Motor Express and Arnold Transportation Services (ATS), which were acquired November 30, 2001. The Condensed Consolidated Balance Sheet at March 23, 2002 and December 31, 2001 includes New Penn and ATS.
Condensed Statements of Consolidated Income (unaudited)
Roadway Corporation and Subsidiaries
First Quarter Ended
(Twelve Weeks)
March 23, March 24,
2002 2001
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(in thousands, except
per share data)
Revenue $ 637,168 $ 650,485
Operating expenses:
Salaries, wages and benefits 411,474 412,126
Operating supplies and expenses 107,223 113,709
Purchased transportation 62,996 64,381
Operating taxes and licenses 16,404 17,539
Insurance and claims 13,140 13,180
Provision for depreciation 21,767 15,261
Net loss on sale of operating property 295 186
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Total operating expenses 633,299 636,382
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Operating income 3,869 14,103
Other (expense) income, net (6,774) (5,429)
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(Loss) income before income taxes (2,905) 8,674
(Benefit) provision for income taxes (1,156) 3,684
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Net (loss) income $ (1,749) $ 4,990
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(Loss) earnings per share - basic $ (0.09) $ .27
(Loss) earnings per share - diluted $ (0.09) $ .26
Average shares outstanding - basic 18,555 18,451
Average shares outstanding - diluted 18,555 18,912
Operating ratio 99.4% 97.8%
Profit (loss) margin (0.3%) 0.8%
Condensed Consolidated Balance Sheets (unaudited)
Roadway Corporation and Subsidiaries
March 23, December 31,
2002 2001
(in thousands)
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Assets
Current assets:
Cash and cash equivalents $ 67,493 $ 122,873
Other current assets 243,329 237,581
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Total current assets 310,822 360,454
Net carrier operating property 595,879 607,925
Goodwill, net 267,984 268,253
Deferred income taxes 33,675 31,054
Other assets 34,754 35,163
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Total assets $1,243,114 $1,302,849
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Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 173,717 $ 216,765
Other current liabilities 192,211 196,328
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Total current liabilities 365,928 413,093
Long-term liabilities 223,476 222,861
Long-term debt 307,000 307,000
Shareholders' equity 346,710 359,895
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Total liabilities and equity $1,243,114 $1,302,849
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Condensed Statements of Consolidated Cash Flows (unaudited)
Roadway Corporation and Subsidiaries
Twelve Weeks Ended
March 23, March 24,
2002 2001
(in thousands)
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Cash flows from operating activities:
Net (loss) income $ (1,749) $ 4,990
Adjustments (42,670) 3,435
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Net cash (used in) provided
by operating activities (44,419) 8,425
Net cash (used) by investing
activities (10,017) (17,737)
Net cash (used) by financing
activities (933) (1,581)
Effect of exchange rate
changes on cash (11) (13)
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Net (decrease) in cash and
cash equivalents (55,380) (10,906)
Cash and cash equivalents at
beginning of period 122,873 64,939
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Cash and cash equivalents at
end of period $ 67,493 $ 54,033
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Reportable Segments and Related Operating Data
First Quarter 2002
# of working days - 58 (Twelve Weeks Ended March 23, 2002)
(Dollars in thousands) Roadway New Penn ATS Segment
Express Total
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Revenue $ 553,558 $ 45,409 $ 38,201 $637,168
Salaries, wages & benefits 366,336 30,709 12,310 409,355
Operating supplies 95,499 6,114 8,014 109,627
Purchased transportation 51,126 383 11,487 62,996
Other operating expense 40,190 4,892 6,228 51,310
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Operating expense 553,151 42,098 38,039 633,288
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Operating income $ 407 $ 3,311 $ 162 $ 3,880
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Operating ratio 99.9% 92.7% 99.6% 99.4%
LTL tons 1,205,865 177,264
Truckload tons 261,511 23,913
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Total tons 1,467,376 201,177
LTL shipments 2,570,689 395,154
Truckload shipments 32,102 3,024
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Total shipments 2,602,791 398,178
Revenue per LTL ton $ 425.91 $ 241.77
Revenue per truckload ton $ 152.83 $ 106.73
Revenue per ton $ 377.24 $ 225.72
Expense per ton $ 376.97 $ 209.26
Truckload - Revenue per tractor per week $ 2,414
Truckload - Average # of tractors
during the period 1,319
First Quarter 2001
# of working days - 59 (Twelve Weeks Ended March 24, 2001)
(Dollars in thousands) Roadway New Penn ATS Segment
Express Total
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Revenue $ 650,485 n/a n/a $650,485
Salaries, wages & benefits 412,126 n/a n/a 412,126
Operating supplies 113,709 n/a n/a 113,709
Purchased transportation 64,381 n/a n/a 64,381
Other operating expense 46,166 n/a n/a 46,166
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Operating expense 636,382 n/a n/a 636,382
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Operating income $ 14,103 n/a n/a $ 14,103
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Operating ratio 97.8% n/a n/a 97.8%
LTL tons 1,422,423 n/a
Truckload tons 323,690 n/a
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Total tons 1,746,113 n/a
LTL shipments 3,059,105 n/a
Truckload shipments 39,239 n/a
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Total shipments 3,098,344 n/a
Revenue per LTL ton $ 421.15 n/a
Revenue per truckload ton $ 158.88 n/a
Revenue per ton $ 372.53 n/a
Expense per ton $ 364.46 n/a
Truckload - Revenue per tractor per week n/a
Truckload - Average # of tractors
during the period n/a
Roadway Corporation operates with 12 weeks in each of the first three quarters and 16 weeks in the fourth quarter.
A conference call discussing this quarter's performance with securities analysts will be simulcast live on the Company's Web site at www.roadwaycorp.com beginning at 11:00 a.m. (Eastern time) on Tuesday, April 9, 2002. The call will remain available for playback for the next three weeks.
Note: While most of the information provided herein is historical, some of the comments made are forward-looking statements intended to qualify for the safe harbor from liability under the Private Securities Litigation Reform Act of 1995. All statements that are not historical statements of fact are "forward-looking statements" for purposes of these provisions and subject to numerous risks and uncertainties that could cause Roadway Corporation's actual performance to differ from that expressed or implied in the forward-looking statements. The risks and uncertainties include variable factors such as capacity and rate levels in the motor freight industry, fuel prices, the state of the national economy, the success of the Corporation's operating plans and uncertainties concerning the impact recent terrorist activities may have on the economy and the motor freight industry. These forward-looking statements reflect management's analysis of future events only as of the date of this release. Roadway Corporation undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. In addition to the disclosure contained herein, readers should carefully review risks and uncertainties contained in other documents Roadway Corporation files from time to time with the Securities and Exchange Commission.
Included in the Dow Jones Transportation Average, Roadway Corporation , is a holding company dedicated to identifying opportunities to expand the transportation-related service offerings available to customers through the Roadway portfolio of strategically linked companies. Roadway Corporation's principal operating subsidiaries include: Roadway Express, a leading ISO 9002-certified transporter of industrial, commercial and retail goods in the two- to five-day regional and long-haul markets. Roadway Express provides seamless service between all 50 states, Canada, Mexico and Puerto Rico including export services to 66 countries. New Penn Motor Express, a regional, next-day ground less-than-truckload carrier of general commodities serving twelve states in the Northeastern United States, Quebec, Canada and Puerto Rico, with links to the Midwest and Southeast United States and Ontario, Canada. And, Arnold Transportation Services (ATS), an irregular route, dedicated truckload carrier serving short-haul markets in the Northeast, Southeast, Midwest and Southwest regions of the U.S. For additional information, contact the Company at www.roadwaycorp.com.