Roadway Corporation Announces First Quarter EPS of $0.42
AKRON, Ohio--April 15, 2003--Roadway Corporation , today reported that revenues for the twelve weeks constituting the Company's first quarter, which ended March 29, 2003, were $754,070,000, up 26% when compared to revenues of $598,967,000 for the same period last year. For the first quarter of 2003, the Company reported income from continuing operations of $7,863,000, or $0.41 per share (diluted), compared to a loss from continuing operations of $1,873,000, or $0.10 per share (diluted), for the first quarter of 2002. For the first quarter of 2003, the Company reported net income of $8,010,000, or $0.42 per share (diluted), compared to net loss of $1,749,000, or $0.09 per share (diluted), for the first quarter of 2002. The first quarter of 2003 included four extra working days compared to the first quarter of 2002.James D. Staley, President and CEO of Roadway Corporation stated, "We are pleased to report completion of a strong first quarter despite several challenges with the potential to impede our performance. As 2003 began, we faced competitor attempts to take business away during our labor contract negotiations, international unrest, a poor general economy, volatile fuel costs and inclement weather. Overall, Roadway Corporation's consolidated operating margin improved 2.1 points to 97.3 and its consolidated operating income increased five-fold over the same period a year ago."
"We successfully concluded contract negotiations early in February and on March 28, a new, five-year national labor agreement was overwhelmingly ratified. The economy remains unpredictable. However, reduced capacity in the LTL industry led to increased business levels and stable pricing at Roadway Express," Staley said.
"Roadway Express retained business gained after the closure of a major competitor last fall, and considering that the first quarter is traditionally the slowest of the year, we were pleased to see daily tonnage levels up 11.5% when compared to the first quarter of last year. With this significant increase in business levels, Roadway Express' employees still kept a focus on managing costs, and through improved operational efficiencies increased our profitability. Revenue per ton, net of our fuel surcharge, was up 3.3 % over last year and Roadway Express' operating margin improved 2.4 points to 97.5," Staley added.
"Revenue at our next-day, LTL carrier, New Penn Motor Express, increased 7.5% compared to last year. However, daily tonnage levels at New Penn were flat. The stagnant tonnage levels were the result of continuing economic softness, a highly competitive environment in the Northeast and severe winter storms that plagued much of New Penn's primary service area. The severe winter weather also increased New Penn's costs for the quarter. New Penn is the key component of our next-day strategy," Staley stated.
"Looking forward, our assumptions do not include economic growth for the rest of the year. However, when it does begin, our companies have the available capacity and are well positioned to leverage the benefits of an economic recovery. Our outlook for the second quarter and full-year 2003 anticipates strong top-line growth will continue. The rate of revenue growth in the second quarter is expected to be between 16% and 19%. Our operating margins should continue to improve and are expected to be between 3.7% and 4.2% for the quarter. The second quarter's earnings-per-share should be in the range of $0.65 to $0.79. For the year, revenue growth is forecast to be between 10.5% and 13.0%, with operating margins in the range of 3.9% to 4.3% and earnings-per-share of between $3.10 and $3.60," Staley concluded.
As a result of the sale of Arnold Transportation Services (ATS) on January 23, 2003, ATS has been accounted for as a discontinued operation for all periods presented. Assets and liabilities of ATS are included in the current section of the Condensed Consolidated Balance Sheet at December 31, 2002.
Condensed Statements of Consolidated Income
Roadway Corporation and Subsidiaries
Twelve Weeks Ended
(First Quarter)
March 29, 2003 March 23, 2002
-------------- --------------
(in thousands, except per
share data)
Revenue $754,070 $598,967
Operating expenses:
Salaries, wages and benefits 475,435 399,164
Operating supplies and expenses 130,412 99,209
Purchased transportation 74,784 51,509
Operating taxes and licenses 19,866 15,564
Insurance and claims 15,112 11,431
Provision for depreciation 17,299 18,088
Net loss on sale of operating property 811 295
-------------- --------------
Total operating expenses 733,719 595,260
-------------- --------------
Operating income from continuing
operations 20,351 3,707
Other (expense), net (6,794) (6,824)
-------------- --------------
Income (loss) from continuing operations
before income taxes 13,557 (3,117)
Provision (benefit) for income taxes 5,694 (1,244)
-------------- --------------
Income (loss) from continuing operations 7,863 (1,873)
Income from discontinued operations 147 124
-------------- --------------
Net income (loss) $8,010 $(1,749)
============== ==============
Earnings (loss) per share - basic:
Continuing operations $0.42 $(0.10)
Discontinued operations 0.01 0.01
-------------- --------------
Total earnings (loss) per share - basic $0.43 $(0.09)
Earnings (loss) per share - diluted:
Continuing operations $0.41 $(0.10)
Discontinued operations 0.01 0.01
-------------- --------------
Total earnings (loss) per share - diluted $0.42 $(0.09)
Average shares outstanding - basic 18,655 18,555
Average shares outstanding - diluted 19,086 18,555
Operating ratio 97.3% 99.4%
Profit margin 1.1% (0.3)%
Condensed Consolidated Balance Sheets
Roadway Corporation and Subsidiaries
March 29, 2003 December 31, 2002
-------------- -----------------
(in thousands)
Assets
Current assets:
Cash and cash equivalents $117,151 $106,929
Other current assets 272,628 356,143
-------------- -----------------
Total current assets 389,779 463,072
Net carrier operating property 504,240 509,183
Goodwill, net 284,598 283,910
Deferred income taxes 42,908 39,941
Other assets 47,249 39,767
-------------- -----------------
Total assets $1,268,774 $1,335,873
============== =================
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $187,457 $193,501
Other current liabilities 187,423 267,389
-------------- -----------------
Total current liabilities 374,880 460,890
Long-term liabilities 218,427 213,601
Long-term debt 273,513 273,513
Shareholders' equity 401,954 387,869
-------------- -----------------
Total liabilities and equity $1,268,774 $1,335,873
============== =================
Condensed Statements of Consolidated Cash Flows
Roadway Corporation and Subsidiaries
Twelve Weeks Ended
(First Quarter)
March 29, 2003 March 23, 2002
-------------- --------------
(in thousands)
Cash flows from operating activities:
Income (loss) from continuing
operations $7,863 $(1,873)
Adjustments (3,579) (34,223)
-------------- --------------
Net cash provided by (used in)
continuing operating activities 4,284 (36,096)
Net cash (used) by investing activities 34,197 (9,662)
Net cash (used) by financing activities (25,910) (933)
Effect of exchange rate changes on cash 51 (11)
-------------- --------------
Net increase (decrease) in cash and
cash equivalents from continuing
operations 12,622 (46,702)
Net (decrease) in cash and cash
equivalents from discontinued
operations (2,400) (4,339)
-------------- --------------
Cash and cash equivalents at beginning
of period 106,929 110,433
-------------- --------------
Cash and cash equivalents at end of
period $117,151 $59,392
============== ==============
Reportable Segments and Related
Operating Data
Twelve Weeks Ended March 29, 2003
# of working days - 62 (First Quarter 2003)
(Dollars in thousands) Roadway Express New Penn Segment Total
--------------- ---------- -------------
Revenue $705,244 $48,826 $754,070
Salaries, wages & benefits 439,438 33,443 472,881
Operating supplies 125,826 7,667 133,493
Purchased transportation 74,242 542 74,784
Other operating expense 48,000 4,561 52,561
--------------- ---------- -------------
Operating expense 687,506 46,213 733,719
--------------- ---------- -------------
Operating income $17,738 $2,613 $20,351
=============== ========== =============
Operating ratio 97.5% 94.6% 97.3%
LTL tons 1,458,227 185,678
Truckload tons 290,526 28,888
--------------- ----------
Total tons 1,748,753 214,566
LTL shipments 3,100,366 421,736
Truckload shipments 36,304 3,552
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Total shipments 3,136,670 425,288
Revenue per LTL ton $449.95 $246.18
Revenue per truckload ton $169.07 $107.90
Revenue per ton $403.28 $227.56
Expense per ton $393.14 $215.38
Twelve Weeks Ended March 23, 2002
# of working days - 58 (First Quarter 2002)
(Dollars in thousands) Roadway Express New Penn Segment Total
--------------- ---------- -------------
Revenue $553,558 $45,409 $598,967
Salaries, wages & benefits 366,336 30,709 397,045
Operating supplies 95,499 6,114 101,613
Purchased transportation 51,126 383 51,509
Other operating expense 40,190 4,892 45,082
--------------- ---------- -------------
Operating expense 553,151 42,098 595,249
--------------- ---------- -------------
Operating income $407 $3,311 $3,718
=============== ========== =============
Operating ratio 99.9% 92.7% 99.4%
LTL tons 1,205,865 177,264
Truckload tons 261,511 23,913
--------------- ----------
Total tons 1,467,376 201,177
LTL shipments 2,570,689 395,154
Truckload shipments 32,102 3,024
--------------- ----------
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
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 15, 2003. The call will remain available for the next three weeks.
Note: This release contains, and other statements that we may make may contain, forward looking statements within the meaning of the Private Securities Litigation Reform Act with respect to the outlook for expectations for revenue, earnings or other future financial or business performance, strategies, expectations and goals. All statements that are not historical statements of fact are "forward-looking statements" and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements include all comments relating to our beliefs and expectations as to future events and trends affecting our business, results of operations and financial condition. We intend for the words "believes," "anticipates," "expects," "intends," "plans," "continues," "projects," and similar expressions to identify forward-looking statements. The risks and uncertainties include, among others, variable factors such as capacity and rate levels in the motor freight industry; fuel prices; the impact of competition; the state of the national economy; the success of our operating plans, including our ability to manage growth and control costs; labor relations matters; and, uncertainties concerning the impact terrorist activities may have on the economy and the motor freight industry. We have based these forward-looking statements on management's analysis about future events only as of the date of this press release. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this press release. These forward-looking statements are subject to risks, uncertainties and assumptions about us and our subsidiaries. In addition to the disclosure contained in this document, you should carefully review the risks and uncertainties contained in other documents Roadway Corporation files from time to time with the Securities and Exchange Commission. Those documents are accessible on the SEC's website at www.sec.gov and through our website at www.roadwaycorp.com.
Included in the Dow Jones Transportation Average, Roadway Corporation , is a holding company dedicated to leveraging opportunities to expand the transportation-related service offerings available to customers through the Roadway portfolio of strategically linked transportation companies. Roadway Corporation's principal subsidiaries include Roadway Express and Roadway Next Day Corporation. Roadway Express is a leading ISO 9001 and C-TPAT/PIP and FAST certified transporter of industrial, commercial and retail goods in the two- to five-day regional and long-haul markets. Roadway Express provides seamless service throughout all 50 states, Canada, Mexico and Puerto Rico including export/import services for more than 100 countries worldwide. Roadway Express owns Reimer Express Lines in Canada and Mexican-based Roadway Express, S.A. de C.V. Roadway Next Day Corporation is a holding company focused on business opportunities in the shorter-haul regional and next-day markets. Roadway Next Day Corporation owns New Penn Motor Express, a 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. For additional information, contact Roadway Corporation at www.roadwaycorp.com.