Yellow Corporation Earnings Increase 81%
OVERLAND PARK, Kan., July 18 /PRNewswire/ -- Yellow Corporation (Nasdaq: YELL) announced today that net income for the second quarter ended June 30, 2000 was $23.5 million, or $.92 per share, compared with net income of $13.0 million, or $.52 per share in the 1999 second quarter. Net income grew 81 percent and earnings per share were up 77 percent over the 1999 second quarter.
Consolidated operating revenue was $904.2 million, up 19.6 percent from $756.1 million in the 1999 second quarter. Consolidated operating income was $46.0 million, up 89 percent from $24.3 million in the prior year period. Second quarter 1999 results do not include contributions from Jevic, which was acquired in July 1999.
The second quarter 2000 results include a nonrecurring after-tax net gain at Yellow Freight System of $8.7 million or $.34 per share primarily resulting from the sale of real estate property in Manhattan, New York. Second quarter results also include an after-tax loss of $1.5 million or $.06 share pertaining to business development expenses for Transportation.com, an Internet-based transportation venture.
"Business was very strong at Yellow Freight System throughout the second quarter, keeping us on track for a very good financial performance in 2000," said Bill Zollars, Yellow Corporation Chairman, President and CEO. "Performance at our regional carrier group was below expectations, though business levels and operating performance improved significantly in June. Transportation.com's on time, successful launch and subsequent customer response continues to support our enthusiasm for the potential of this business."
National Transportation Services
Yellow Freight System, the company's largest subsidiary, reported second quarter operating income of $43.3 million. Excluding a $14.2 million nonrecurring pretax net gain, Yellow Freight recorded operating income of $29.1 million, up 29 percent from $22.6 million in the 1999 second quarter.
Revenue for the second quarter was $696.7 million, up 9.1 percent from $638.8 million in the prior year's period. Excluding the nonrecurring net gain, the 2000 second quarter operating ratio was 95.8, compared with 96.5 a year earlier.
Second quarter less-than-truckload (LTL) tonnage increased by 4.6 percent and LTL weight per shipment increased 1.9 percent over the 1999 quarter. The number of LTL shipments increased 2.6 percent and LTL revenue per shipment improved by 7.2 percent over the 1999 second quarter.
"Yellow Freight continues to make solid progress on both the top and bottom lines," Zollars said, "thanks to a very focused business strategy designed to raise levels of customer satisfaction, improve the depth and quality of services, improve yield and aggressively manage cost.
Yellow Freight's nonrecurring gain was the net result of a $20.7 million pretax gain on the sale of a real estate property in Manhattan, New York, purchased in 1976 and closed in 1997, and a $6.5 million pretax loss on the write-off of an obsolete computer aided dispatch/mobile data terminal technology application.
Regional Carrier Group
During the 2000 second quarter, the four carriers comprising the Yellow Corporation Regional Carrier Group -- Saia Motor Freight Line, Jevic Transportation, WestEx and Action Express -- reported combined operating income of $6.4 million, up 104 percent from $3.1 million in the 1999 second quarter. Revenue for the regional group was $198.9 million, up 77.7 percent from $111.9 million in the 1999 second quarter. The second quarter 1999 results do not include contributions from Jevic, which was acquired July 9, 1999.
At Saia, second quarter 2000 revenue was $92.2 million and operating income was $3.5 million, compared with revenue of $85.1 million and operating income of $2.8 million in the 1999 second quarter. The 2000 second quarter operating ratio was 96.2, compared with 96.7 in the year-earlier quarter.
"Saia experienced some softness in business levels early in the quarter and took aggressive steps to reduce costs," Zollars said. "These actions began to show up in June results and Saia is on track to return to stronger operating performance during the remainder of this year."
Jevic reported second quarter 2000 revenue of $76.7 million and operating income of $2.7 million. As a stand-alone company in the second quarter of 1999, Jevic reported revenue of $67.1 million and operating income of $5.3 million. The 2000 second quarter operating ratio for Jevic was 96.4, compared with 92.2 in the 1999 second quarter. Current quarter operating income includes $520,000 in acquisition goodwill amortization that was not applicable to the 1999 second quarter results.
"Although revenue continues to grow rapidly, Jevic was hurt by a combination of higher costs and increased competitive conditions," Zollars said. "We expect Jevic's second half to be significantly more profitable."
WestEx reported second quarter revenue of $18.8 million, up 7.8 percent from $17.5 million in the 1999 second quarter. WestEx had a second quarter 2000 operating ratio of 101.7. Action Express reported second quarter revenue of $11.1 million, up 18.5 percent from $9.4 million in the 1999 second quarter. Action Express had a second quarter operating ratio of 94.8.
On June 30, Transportation.com successfully introduced the first of a broad suite of web-based services designed to serve both shippers and carriers over the Internet. The first online services include: shipment management offering shippers pre-negotiated rates; load matching featuring automated postings when shipments are matched with equipment; auctions for a range of used transportation equipment and parts; logistics consulting services aimed at small to medium-sized businesses; and a business center providing a range of information important to the transportation industry.
Transportation.com is an Internet transportation services company funded by Yellow Corporation and the venture capital firms, TL Ventures and EnerTech Capital Partners.
Corporate and Other
On June 23, the company announced implementation of a new $25 million stock buyback program. The program will be funded through reductions in the 2000 capital expenditure plan that was originally projected at $177 million and which is now projected at $145 million. During the last week of June, the company purchased 260,000 shares for $3.8 million or $14.60 per share. Between December 1997 and April 1999, the company acquired 3.8 million shares in prior stock buyback programs.
Statements contained in this release that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the company's expectations, hopes, beliefs and intentions on strategies regarding the future. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including but not limited to inflation, labor relations, inclement weather, competitor pricing activity, expense volatility and a downturn in general economic activity.
Yellow Corporation is a holding company with wholly owned operating subsidiaries specializing in the national, regional and international transportation of goods and materials. Transportation.com is a jointly owned subsidiary providing an Internet transportation marketplace for information- rich products and services targeted to shippers, carriers and private fleet operators. Headquartered in Overland Park, Kansas, Yellow employs approximately 32,000 people.
STATEMENTS OF CONSOLIDATED OPERATIONS Yellow Corporation and Subsidiaries For the Quarter and Six Months Ended June 30, 2000 and 1999 (Amounts in thousands except per share data) (Unaudited) Second Quarter Six Months 2000 1999 2000 1999 OPERATING REVENUE $904,166 $756,056 $1,786,252 $1,483,554 OPERATING EXPENSES: Salaries, wages and benefits 562,311 485,104 1,110,214 958,660 Operating expenses and supplies 130,078 114,669 277,070 227,940 Operating taxes and licenses 28,258 23,417 56,451 46,526 Claims and insurance 19,629 17,418 40,596 33,495 Depreciation and amortization 31,657 24,900 63,117 49,558 Purchased transportation 86,230 66,270 167,514 131,345 Total operating expenses 858,163 731,778 1,714,962 1,447,524 INCOME FROM OPERATIONS 46,003 24,278 71,290 36,030 NONOPERATING (INCOME) EXPENSES: Interest expense 5,060 2,898 9,945 5,751 Other, net 1,258 (699) 2,907 (33) Nonoperating expenses, net 6,318 2,199 12,852 5,718 INCOME BEFORE INCOME TAXES 39,685 22,079 58,438 30,312 INCOME TAX PROVISION 16,174 9,121 24,450 12,579 NET INCOME $23,511 $12,958 $33,988 $17,733 AVERAGE SHARES OUTSTANDING-BASIC 25,271 24,854 25,212 25,131 AVERAGE SHARES OUTSTANDING-DILUTED 25,429 25,013 25,364 25,313 BASIC EARNINGS PER SHARE: $.93 $.52 $1.35 $.71 DILUTED EARNINGS PER SHARE: $.92 $.52 $1.34 $.70
SOURCE Yellow Corporation
CONTACT: Analysts, Bert Trucksess, 913-696-6105, or Media, Roger Dick of Yellow Corp., 913-696-6184/