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USFreightways Comments on Expected Third Quarter Results

25 September 2000

USFreightways Comments on Expected Third Quarter Results

    CHICAGO--Sept. 22, 2000--USFreightways Corporation (NASDAQ USFC) today announced that the Company expects to report earnings for the third quarter of between 90 cents and 95 cents per diluted share, down from $1.07 per diluted share reported for the third quarter of 1999 and below current analysts consensus of $1.11 per share. The primary reason for the lower than expected earnings is the slowdown in the U.S. economy that is occurring as well as additional expenses associated with the expansion of USF Worldwide.
    Revenue growth (exclusive of fuel surcharges) in the Company's regional LTL subsidiaries is expected to be in the mid single digit range compared to the 14.6% revenue increase achieved in last year's third quarter. The combination of the closure of Preston and Nationsway, the beginning of the Y2K build-up of inventories and a much stronger economy all contributed to the excellent growth and record earnings reported in the 1999 quarter. The LTL operating ratio is expected to increase approximately one point from last year's 89.4.
    The results for USF Worldwide, including increased fuel costs as well as the costs of the continuing expansion of the Company's Asian network, are expected to produce a loss. Revenue growth and operating income for USF Logistics, although lower than the third quarter of last year, are expected to be at acceptable levels.
    The expected results referred to herein are based on actual results to the end of August and anticipated results for September based on the first three weeks of operations.
    Actual results for the third quarter will be released on October 23, 2000, at which time the Company will host a conference call. President and CEO Sam Skinner indicated that the Company has already implemented significant cost reduction and capital containment plans, which when fully implemented, will assure that the Company will continue to maintain one of the best operating margins in the industry.
    Unless there is a significant increase in the level of economic activity in the current year's fourth quarter, it will be difficult to achieve consensus estimates and last year's fourth quarter actual results of $1.11 per diluted share.