Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 20, 2004
YELLOW ROADWAY CORPORATION
| Delaware | 0-12255 | 48-0948788 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 10990 Roe Avenue, Overland Park, Kansas | 66211 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (913) 696-6100
| Item 5. Other Events | ||||||||
| Item 7. Financial Statements, Pro Forma Financial Information and Exhibits | ||||||||
| SIGNATURE | ||||||||
| Certain Pro Forma Financial Information | ||||||||
Table of Contents
Item 5. Other Events
Yellow Roadway Corporation is filing its unaudited pro forma financial information by quarter for 2003. The unaudited pro forma financial information presents the combined results of Yellow Roadway Corporation as if the acquisition of Roadway Corporation (completed on December 11, 2003) had occurred as of the beginning of the 2003 fiscal year. The unaudited pro forma financial information is not intended to represent or be indicative of the consolidated results of operations of Yellow Roadway that would have been reported had the acquisition been completed as of January 1, 2003, and should not be taken as representative of the future consolidated results of operations of Yellow Roadway. These results are not comparable to the results of Yellow Roadway for the 2004 fiscal year due to the conversion of the Roadway entities’ reporting to a calendar quarter in 2004. The dates included in each of the Roadway Corporation 2003 reporting periods are indicated in the historical columns for each period presented.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
| (a) | Financial statements of businesses acquired. | |||
| Not applicable | ||||
| (b) | Pro forma financial information. | |||
| The following pro forma information is included in Exhibit 99.1 hereto and incorporated herein by reference: | ||||
Unaudited Condensed Combined Pro Forma Statement of Operations for the Three Months Ended March 31, 2003
Unaudited Condensed Combined Pro Forma Statement of Operations for the Three Months Ended June 30, 2003
Unaudited Condensed Combined Pro Forma Statement of Operations for the Three Months Ended September 30, 2003
Unaudited Condensed Combined Pro Forma Statement of Operations for the Three Months Ended December 31, 2003
Notes to Unaudited Condensed Combined Pro Forma Financial Statements
| (c) | Exhibits. | |||
| The following exhibits are filed herewith: | ||||
| Exhibit No. |
Description |
|
99.1
|
Certain pro forma financial information (see Item 7(b) above) |
Table of Contents
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| YELLOW
ROADWAY CORPORATION (Registrant) |
||||
| Date: May 20, 2004 | By: | /s/ Donald G. Barger, Jr. | ||
| Donald G. Barger, Jr. | ||||
| Senior Vice President and Chief Financial Officer |
||||
EXHIBIT 99.1
Unaudited Condensed Combined Pro Forma Statement of Operations
For the Three Months Ended March 31, 2003
| Historical |
Pro Forma |
|||||||||||||||||||
| Roadway | ||||||||||||||||||||
| Yellow | Corporation | |||||||||||||||||||
| Corporation |
(1/1/03 - 3/29/03) |
Adjustments |
Combined |
|||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
Revenue |
$ | 681,093 | $ | 754,070 | $ | 6,200 | (1 | ) | $ | 1,441,363 | ||||||||||
Operating expenses: |
||||||||||||||||||||
Salaries, wages and employees’ benefits |
438,748 | 475,435 | 479 | (6 | ) | 914,662 | ||||||||||||||
Operating expenses and supplies |
109,943 | 130,412 | (151 | ) | (2 | ) | 240,204 | |||||||||||||
Operating taxes and licenses |
19,767 | 19,866 | 39,633 | |||||||||||||||||
Claims and insurance |
12,724 | 15,112 | 160 | (6 | ) | 27,996 | ||||||||||||||
Depreciation and amortization |
20,268 | 17,299 | 151 | (2 | ) | 41,038 | ||||||||||||||
| 120 | (3 | ) | ||||||||||||||||||
| 3,200 | (4 | ) | ||||||||||||||||||
Purchased transportation |
67,873 | 74,784 | 142,657 | |||||||||||||||||
Losses on property disposals, net |
11 | 811 | 822 | |||||||||||||||||
Acquisition, spin-off and reorganization charges |
— | — | — | (5 | ) | — | ||||||||||||||
Total operating expenses |
669,334 | 733,719 | 3,959 | 1,407,012 | ||||||||||||||||
Operating income |
11,759 | 20,351 | 2,241 | 34,351 | ||||||||||||||||
Interest expense |
2,646 | 5,101 | 498 | (2 | ) | 12,763 | ||||||||||||||
| 4,518 | (6 | ) | ||||||||||||||||||
ABS facility charges |
— | 1,047 | (1,047 | ) | (6 | ) | — | |||||||||||||
Other, net |
(93 | ) | 646 | (498 | ) | (2 | ) | 55 | ||||||||||||
Nonoperating expenses, net |
2,553 | 6,794 | 3,471 | 12,818 | ||||||||||||||||
Income from continuing operations before income tax |
9,206 | 13,557 | (1,230 | ) | 21,533 | |||||||||||||||
Income tax provision |
3,580 | 5,694 | (492 | ) | (7 | ) | 8,782 | |||||||||||||
Income from continuing operations |
5,626 | 7,863 | (738 | ) | 12,751 | |||||||||||||||
Income from discontinued operations, net |
— | 147 | — | 147 | ||||||||||||||||
Net income |
$ | 5,626 | $ | 8,010 | $ | (738 | ) | $ | 12,898 | |||||||||||
Average common shares outstanding — Basic |
29,583 | 18,655 | 47,621 | |||||||||||||||||
Average common shares outstanding — Diluted |
29,818 | 19,086 | 47,856 | |||||||||||||||||
Earnings per share from continuing operations: |
||||||||||||||||||||
Basic |
$ | 0.19 | $ | 0.42 | $ | 0.27 | ||||||||||||||
Diluted |
$ | 0.19 | $ | 0.41 | $ | 0.27 | ||||||||||||||
Earnings per share from net income: |
||||||||||||||||||||
Basic |
$ | 0.19 | $ | 0.43 | $ | 0.27 | ||||||||||||||
Diluted |
$ | 0.19 | $ | 0.42 | $ | 0.27 | ||||||||||||||
Unaudited Condensed Combined Pro Forma Statement of Operations
For the Three Months Ended June 30, 2003
| Historical |
Pro Forma |
|||||||||||||||||||
| Roadway | ||||||||||||||||||||
| Yellow | Corporation | |||||||||||||||||||
| Corporation |
(3/30/03 - 6/21/03) |
Adjustments |
Combined |
|||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
Revenue |
$ | 713,453 | $ | 741,528 | $ | 1,100 | (1 | ) | $ | 1,456,081 | ||||||||||
Operating expenses: |
||||||||||||||||||||
Salaries, wages and employees’ benefits |
458,036 | 468,223 | 479 | (6 | ) | 926,738 | ||||||||||||||
Operating expenses and supplies |
103,908 | 130,022 | (151 | ) | (2 | ) | 233,779 | |||||||||||||
Operating taxes and licenses |
19,492 | 18,688 | 38,180 | |||||||||||||||||
Claims and insurance |
10,730 | 14,529 | 160 | (6 | ) | 25,419 | ||||||||||||||
Depreciation and amortization |
20,818 | 16,870 | 151 | (2 | ) | 41,159 | ||||||||||||||
| 120 | (3 | ) | ||||||||||||||||||
| 3,200 | (4 | ) | ||||||||||||||||||
Purchased transportation |
68,106 | 75,725 | 143,831 | |||||||||||||||||
Losses on property disposals, net |
30 | 30 | 60 | |||||||||||||||||
Acquisition, spin-off and reorganization charges |
— | — | — | (5 | ) | — | ||||||||||||||
Total operating expenses |
681,120 | 724,087 | 3,959 | 1,409,166 | ||||||||||||||||
Operating income |
32,333 | 17,441 | (2,859 | ) | 46,915 | |||||||||||||||
Interest expense |
2,625 | 4,780 | 1,725 | (2 | ) | 12,979 | ||||||||||||||
| 3,849 | (6 | ) | ||||||||||||||||||
ABS facility charges |
— | 766 | (766 | ) | (6 | ) | — | |||||||||||||
Other, net |
(343 | ) | 498 | (2,349 | ) | (2 | ) | (2,194 | ) | |||||||||||
Nonoperating expenses, net |
2,282 | 6,044 | 2,459 | 10,785 | ||||||||||||||||
Income from continuing operations before income tax |
30,051 | 11,397 | (5,318 | ) | 36,130 | |||||||||||||||
Income tax provision |
11,691 | 4,787 | (2,127 | ) | (7 | ) | 14,351 | |||||||||||||
Income from continuing operations |
18,360 | 6,610 | (3,191 | ) | 21,779 | |||||||||||||||
Loss from discontinued operations, net |
— | (302 | ) | — | (302 | ) | ||||||||||||||
Net income |
$ | 18,360 | $ | 6,308 | $ | (3,191 | ) | $ | 21,477 | |||||||||||
Average common shares outstanding — Basic |
29,586 | 18,955 | 47,624 | |||||||||||||||||
Average common shares outstanding — Diluted |
29,834 | 19,336 | 47,872 | |||||||||||||||||
Earnings per share from continuing operations: |
||||||||||||||||||||
Basic |
$ | 0.62 | $ | 0.35 | $ | 0.46 | ||||||||||||||
Diluted |
$ | 0.62 | $ | 0.35 | $ | 0.46 | ||||||||||||||
Earnings per share from net income: |
||||||||||||||||||||
Basic |
$ | 0.62 | $ | 0.33 | $ | 0.45 | ||||||||||||||
Diluted |
$ | 0.62 | $ | 0.33 | $ | 0.45 | ||||||||||||||
Unaudited Condensed Combined Pro Forma Statement of Operations
For the Three Months Ended September 30, 2003
| Historical |
Pro Forma |
|||||||||||||||||||
| Roadway | ||||||||||||||||||||
| Yellow | Corporation | |||||||||||||||||||
| Corporation |
(6/22/03 - 9/13/03) |
Adjustments |
Combined |
|||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
Revenue |
$ | 770,705 | $ | 751,594 | $ | (400 | ) | (1 | ) | $ | 1,521,899 | |||||||||
Operating expenses: |
||||||||||||||||||||
Salaries, wages and employees’ benefits |
489,277 | 477,174 | 479 | (6 | ) | 966,930 | ||||||||||||||
Operating expenses and supplies |
106,490 | 122,412 | (151 | ) | (2 | ) | 228,751 | |||||||||||||
Operating taxes and licenses |
20,251 | 18,515 | 38,766 | |||||||||||||||||
Claims and insurance |
16,518 | 15,133 | 160 | (6 | ) | 31,811 | ||||||||||||||
Depreciation and amortization |
21,120 | 16,658 | 151 | (2 | ) | 41,249 | ||||||||||||||
| 120 | (3 | ) | ||||||||||||||||||
| 3,200 | (4 | ) | ||||||||||||||||||
Purchased transportation |
77,992 | 77,246 | 155,238 | |||||||||||||||||
Losses (gains) on property disposals, net |
381 | (5,068 | ) | (4,687 | ) | |||||||||||||||
Acquisition, spin-off and reorganization charges |
864 | 24,337 | (25,201 | ) | (5 | ) | — | |||||||||||||
Total operating expenses |
732,893 | 746,407 | (21,242 | ) | 1,458,058 | |||||||||||||||
Operating income |
37,812 | 5,187 | 20,842 | 63,841 | ||||||||||||||||
Interest expense |
6,525 | 4,735 | 951 | (2 | ) | 12,662 | ||||||||||||||
| 451 | (6 | ) | ||||||||||||||||||
ABS facility charges |
— | 726 | (726 | ) | (6 | ) | — | |||||||||||||
Other, net |
2,414 | 818 | (1,575 | ) | (2 | ) | 1,657 | |||||||||||||
Nonoperating expenses, net |
8,939 | 6,279 | (899 | ) | 14,319 | |||||||||||||||
Income (loss) from continuing operations before income tax |
28,873 | (1,092 | ) | 21,741 | 49,522 | |||||||||||||||
Income tax provision |
11,504 | 2,309 | 8,696 | (7 | ) | 22,509 | ||||||||||||||
Income (loss) from continuing operations |
17,369 | (3,401 | ) | 13,045 | 27,013 | |||||||||||||||
Loss from discontinued operations, net |
— | — | — | — | ||||||||||||||||
Net income (loss) |
$ | 17,369 | $ | (3,401 | ) | $ | 13,045 | $ | 27,013 | |||||||||||
Average common shares outstanding — Basic |
29,565 | 19,460 | 47,621 | |||||||||||||||||
Average common shares outstanding — Diluted |
29,843 | 19,460 | 47,856 | |||||||||||||||||
Earnings (loss) per share from continuing operations: |
||||||||||||||||||||
Basic |
$ | 0.59 | $ | (0.18 | ) | $ | 0.57 | |||||||||||||
Diluted |
$ | 0.58 | $ | (0.18 | ) | $ | 0.56 | |||||||||||||
Earnings (loss) per share from net income: |
||||||||||||||||||||
Basic |
$ | 0.59 | $ | (0.18 | ) | $ | 0.57 | |||||||||||||
Diluted |
$ | 0.58 | $ | (0.18 | ) | $ | 0.56 | |||||||||||||
Unaudited Condensed Combined Pro Forma Statement of Operations
For the Three Months Ended December 31, 2003
| Historical |
Pro Forma |
|||||||||||||||||||
| Roadway | ||||||||||||||||||||
| Yellow Roadway | Corporation | |||||||||||||||||||
| Corporation |
(9/14/03 - 12/11/03) |
Adjustments |
Combined |
|||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
Revenue |
$ | 903,365 | $ | 804,927 | $ | (6,800 | ) | (1 | ) | $ | 1,701,492 | |||||||||
Operating expenses: |
||||||||||||||||||||
Salaries, wages and employees’ benefits |
584,379 | 525,877 | 471 | (6 | ) | 1,110,727 | ||||||||||||||
Operating expenses and supplies |
129,484 | 131,204 | (700 | ) | (2 | ) | 259,988 | |||||||||||||
Operating taxes and licenses |
24,038 | 19,988 | 44,026 | |||||||||||||||||
Claims and insurance |
27,698 | 15,306 | 156 | (6 | ) | 43,160 | ||||||||||||||
Depreciation and amortization |
25,192 | 18,955 | 700 | (2 | ) | 48,167 | ||||||||||||||
| 120 | (3 | ) | ||||||||||||||||||
| 3,200 | (4 | ) | ||||||||||||||||||
Purchased transportation |
104,205 | 86,680 | 190,885 | |||||||||||||||||
Losses (gains) on property disposals, net |
(589 | ) | 1,655 | 1,066 | ||||||||||||||||
Acquisition, spin-off and reorganization charges |
2,260 | 29,397 | (31,657 | ) | (5 | ) | — | |||||||||||||
Total operating expenses |
896,667 | 829,062 | (27,710 | ) | 1,698,019 | |||||||||||||||
Operating income |
6,698 | (24,135 | ) | 20,910 | 3,473 | |||||||||||||||
Interest expense |
8,810 | 3,508 | 3,959 | (2 | ) | 11,468 | ||||||||||||||
| (4,809 | ) | (6 | ) | |||||||||||||||||
ABS facility charges |
— | 606 | (606 | ) | (6 | ) | — | |||||||||||||
Other, net |
(796 | ) | 11,577 | (4,583 | ) | (2 | ) | 6,198 | ||||||||||||
Nonoperating expenses, net |
8,014 | 15,691 | (6,039 | ) | 17,666 | |||||||||||||||
Loss from continuing operations before income tax |
(1,316 | ) | (39,826 | ) | 26,949 | (14,193 | ) | |||||||||||||
Income tax provision (benefit) |
(644 | ) | (164 | ) | 10,031 | (7 | ) | 9,223 | ||||||||||||
Loss from continuing operations |
(672 | ) | (39,662 | ) | 16,918 | (23,416 | ) | |||||||||||||
Loss from discontinued operations, net |
— | — | — | — | ||||||||||||||||
Net loss |
$ | (672 | ) | $ | (39,662 | ) | $ | 16,918 | $ | (23,416 | ) | |||||||||
Average common shares outstanding — Basic |
32,721 | 47,621 | ||||||||||||||||||
Average common shares outstanding — Diluted |
33,098 | 47,856 | ||||||||||||||||||
Loss per share from continuing operations: |
||||||||||||||||||||
Basic |
$ | (0.02 | ) | $ | (0.49 | ) | ||||||||||||||
Diluted |
$ | (0.02 | ) | $ | (0.49 | ) | ||||||||||||||
Loss per share from net income: |
||||||||||||||||||||
Basic |
$ | (0.02 | ) | $ | (0.49 | ) | ||||||||||||||
Diluted |
$ | (0.02 | ) | $ | (0.49 | ) | ||||||||||||||
NOTES TO UNAUDITED CONDENSED COMBINED PRO FORMA
FINANCIAL STATEMENTS
These pro forma adjustments reflect the valuations of Roadway’s tangible and intangible assets and liabilities as well as conforming accounting policies recorded as of December 11, 2003 in conjunction with the acquisition. The allocation of the purchase price is preliminary and subject to adjustment, however, we do not expect material changes. These unaudited condensed combined pro forma financial statements are not necessarily indicative of the operating results or financial position that would have occurred had the acquisition been consummated at the dates indicated, nor necessarily indicative of future operating results.
| (1) | Represents the adjustment necessary to conform Roadway’s revenue recognition policy to the policy used by Yellow. | |||
| (2) | Reflects certain statement of operations reclassifications made to conform Roadway’s presentation to the presentation used by Yellow. | |||
| (3) | Adjustment to record additional depreciation expense on the new basis of Roadway’s property and equipment. | |||
| (4) | Adjustment to record amortization expense on identifiable intangible assets. | |||
| (5) | Adjustment to eliminate the expense related to the vesting of restricted stock awards, other compensation and transaction fees associated with the acquisition of Roadway by Yellow that were recognized on Roadway’s historical Statement of Consolidated Income for the period January 1, 2003 through December 11, 2003 and the Yellow Roadway Statement of Consolidated Operations for the year ended December 31, 2003. | |||
| (6) | Adjustment to record additional interest expense, letter of credit fees and amortization of deferred financing costs on borrowings related to our offering of 3.375% contingent convertible senior notes due 2023, our offering of 5.0% contingent convertible senior notes due 2023 and other bank financing transactions related to the acquisition. | |||
| (7) | Adjustment to record the income tax impact of the pro forma adjustments at an effective income tax rate of 40%. | |||