Yellow Roadway Corporation Delivers Successful First Year
-- Roadway Express and Yellow Transportation post highest revenue and
operating income ever
-- New Penn achieves a 20% revenue increase and an 87.0% operating ratio
-- Meridian IQ delivers a 77% revenue increase with $3.7 million in
operating income
OVERLAND PARK, Kan., Jan. 27 /PRNewswire-FirstCall/ -- Yellow Roadway Corporation (Nasdaq: YELL) today announced 2004 adjusted earnings per share ("EPS") of $3.96 in its first full year as a combined company, with $1.24 per share in the fourth quarter. Adjusted EPS for the year excluded $0.21 per share related to the following: dilution from the contingent convertible notes of $.03 per share; a non-cash charge for the unamortized debt costs from eliminating the secured credit facility of $.24 per share; and a benefit from gains on property disposals of $.06 per share. In the fourth quarter of 2004, adjustments to EPS were $.05 per share for the contingent convertible dilution entirely offset by a benefit of $.05 per share from property gains. Reported EPS in 2004 was $3.75 per share compared to 2003 pro forma EPS of $.79 per share and 2003 reported EPS of $1.33 per share.
"2004 was a successful year for Yellow Roadway by any measure," stated Bill Zollars, Chairman, President and CEO of Yellow Roadway. "Our business units set new records for revenue, operating income, and margin. We provided consistent service quality to our customers throughout the year and delivered significant shareholder value."
Yellow Roadway reported the following consolidated results for the fourth quarter of 2004:
-- Operating revenue of $1.77 billion compared to fourth quarter 2003
revenue of $903 million.
-- Adjusted operating income of $107 million, more than three times fourth
quarter 2003 adjusted operating income of $34 million. Adjustments of
$4 million in the fourth quarter of 2004 related entirely to property
gains. Adjustments of $27 million in the fourth quarter of 2003
primarily related to the Roadway acquisition, conforming accounting
policies, and property gains. Reported operating income was
$111 million compared to reported operating income of $7 million in the
fourth quarter of 2003.
For the full year 2004, Yellow Roadway reported the following consolidated results:
-- Operating revenue of $6.77 billion, up 11% from pro forma revenue of
$6.12 billion and more than double reported revenue of $3.07 billion in
2003.
-- Adjusted operating income of $357 million, up from adjusted operating
income of $117 million for 2003. Reported operating income of
$362 million compared to reported operating income of $89 million and
pro forma operating income of $149 million last year.
Results for the quarter and full year 2003 provided above include the former Yellow Corporation entities for the entire periods and Roadway Express and New Penn Motor Express results for the period December 12 through December 31. Pro forma amounts for 2003 assume the acquisition of Roadway Corporation occurred as of January 1, 2003.
Selected Segment Highlights for Fourth Quarter 2004 Compared to Fourth Quarter 2003
"Throughout 2004 our business units remained focused on delivering solid results through effective execution," Zollars said. "Our fourth quarter results reflect their continuing momentum."
-- Roadway Express
-- Revenue of $822 million, up 12.5% from last year's comparable
fourth quarter
-- Adjusted operating income of $53 million with an adjusted
operating ratio of 93.5%
-- LTL tonnage per workday up 3.2%
-- LTL revenue per hundred weight, excluding fuel surcharge, up 0.7%,
and with further adjustments for business mix, up 3.6%
-- Yellow Transportation
-- Record fourth quarter revenue and operating income
-- Adjusted operating ratio of 93.5%, the best fourth quarter
operating ratio since 1983
-- LTL tonnage per workday up 2.2%
-- LTL revenue per hundred weight, excluding fuel surcharge, up 2.7%,
and with further adjustments for business mix, up 4.4%
-- New Penn Motor Express
-- Revenue growth of 26.4%, when stated on a comparable basis
-- Operating ratio of 87.5%
-- LTL tonnage per workday up 15.3%
-- Meridian IQ
-- Revenue increase of 44%, resulting from organic growth and
acquisitions
-- Adjusted operating income of $1.5 million, up 46%
For complete statistical information, refer to the company's website at http://www.yellowroadway.com under Investor Relations and then select Earnings Releases & Operating Statistics. The preceding disclosures for Roadway Express and New Penn are based on comparisons to 2003 'adjusted' revenue, operating income and operating ratios. Management has adjusted the prior year results for conforming accounting policies, acquisition charges and the conversion to a calendar quarter to more accurately compare operating results to the current period. For further detail of 2004 adjustments by segment, refer to the attached "Supplemental Financial Information."
Selected Financial Data
The company will file a Form 8-K with the Securities and Exchange Commission within the next two weeks that includes unaudited Consolidated Balance Sheets at December 31, 2004 and 2003, and unaudited Consolidated Statements of Cash Flows for the years ended December 31, 2004 and 2003. Selected financial data from those statements is included below.
(in thousands except percentages) December 31, 2004 December 31, 2003
Cash and cash equivalents $ 106,489 $ 75,166
Total debt 657,935 909,339
Total shareholders' equity 1,214,190 1,002,085
Debt to capitalization 35.1% 47.6%
Debt to capitalization, less cash 31.2% 45.4%
Outlook
"2005 is another year of opportunity for Yellow Roadway," stated Zollars. "With our significant momentum, operating leverage, substantial synergies, and a favorable economy, we are confident in our ability to continue to deliver solid results."
The company's 2005 expectations are as follows:
-- Full year 2005 EPS between $5.10 and $5.30, including $.24 per share
for dilution from the contingent convertibles. The dilution is based
on our average current stock price of $52.73 per share.
-- First quarter EPS between $.80 and $.90, including $.05 per share of
dilution from the contingent convertibles using the same stock price
assumption as above.
-- Revenue around $7.2 billion, interest expense of $37 million, and a
consolidated income tax rate of 38.1%.
-- Gross capital expenditures between $235 and $245 million, including
about $25 million related to synergy initiatives.
-- Economic assumptions include year-over-year growth in real GDP of 3.5%.
Review of Financial Results
Yellow Roadway Corporation (Nasdaq: YELL) will host a conference call for shareholders and the investment community on Friday, January 28, 2005, beginning at 9:30 a.m. ET, 8:30 a.m. CT.
Hosting the teleconference will be: Bill Zollars-Chairman, President and CEO, Yellow Roadway; Don Barger-Sr. Vice President and CFO, Yellow Roadway; Jim Staley-President, Roadway Group; James Welch-President, Yellow Transportation; and Jim Ritchie-President, Meridian IQ.
Investors and analysts should dial 1.888.428.4479 at least 15 minutes prior to the start of the call.
The conference call will be open to listeners through a live webcast via StreetEvents at http://www.streetevents.com and via the Yellow Roadway Internet site http://www.yellowroadway.com .
An audio playback will be available beginning two hours after the call ends until midnight on February 11, 2005 by calling 1.800.475.6701 and entering the access code, 765296. An audio playback also will be available for 30 days after the call via the StreetEvents and Yellow Roadway web sites.
* * * * *
This news release (and oral statements made regarding the subjects of this release, including on the conference call announced herein) contain forward- looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "expect," and similar expressions are intended to identify forward-looking statements. 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 (without limitation), inflation, inclement weather, price and availability of fuel, competitor pricing activity, expense volatility, ability to capture cost synergies, a downturn in general or regional economic activity, changes in equity and debt markets, effects of a terrorist attack, and labor relations, including (without limitation), the impact of work rules, any obligations to multi-employer health, welfare and pension plans, wage requirements and employee satisfaction.
Yellow Roadway Corporation is one of the largest transportation service providers in the world. Through its subsidiaries including Yellow Transportation, Roadway Express, New Penn Motor Express, Reimer Express, Meridian IQ and Yellow Roadway Technologies, Yellow Roadway provides a wide range of asset and non-asset-based transportation services integrated by technology. The portfolio of brands provided through Yellow Roadway Corporation subsidiaries represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, Yellow Roadway Corporation employs over 50,000 people.
STATEMENTS OF CONSOLIDATED OPERATIONS
Yellow Roadway Corporation and Subsidiaries
For the Three Months and Twelve Months Ended December 31
(Amounts in thousands except per share data)
(Unaudited)
Three Months Twelve Months
2004 2003(a) 2004 2003(a)
OPERATING REVENUE $1,774,137 $903,365 $6,767,485 $3,068,616
OPERATING EXPENSES:
Salaries, wages and
employees' benefits 1,064,447 584,379 4,172,144 1,970,440
Operating expenses and
supplies 273,118 129,484 1,011,864 449,825
Operating taxes and
licenses 43,939 24,038 169,374 83,548
Claims and insurance 34,348 27,698 132,793 67,670
Depreciation and
amortization 44,722 25,192 171,468 87,398
Purchased transportation 206,070 104,205 752,788 318,176
Gains on property
disposals, net (3,957) (589) (4,547) (167)
Acquisition charges - 2,260 - 3,124
Total operating
expenses 1,662,687 896,667 6,405,884 2,980,014
OPERATING INCOME 111,450 6,698 361,601 88,602
NONOPERATING (INCOME)
EXPENSES:
Interest expense 9,506 8,810 43,954 20,606
Write off debt issuance
costs - - 18,279 -
Other 999 (796) 1,705 1,182
Nonoperating expenses,
net 10,505 8,014 63,938 21,788
INCOME (LOSS) BEFORE INCOME
TAXES 100,945 (1,316) 297,663 66,814
INCOME TAX PROVISION
(BENEFIT) 37,600 (644) 113,336 26,131
NET INCOME (LOSS) $63,345 $(672) $184,327 $40,683
AVERAGE SHARES OUTSTANDING-
BASIC 48,617 32,721 48,149 30,370
AVERAGE SHARES OUTSTANDING-
DILUTED 51,170 33,098 49,174 30,655
BASIC EARNINGS (LOSS) PER
SHARE $1.30 $(0.02) $3.83 $1.34
DILUTED EARNINGS (LOSS) PER
SHARE $1.24 $(0.02) $3.75 $1.33
(a) Includes the results of Roadway LLC for December 12 through 31.
SUPPLEMENTAL FINANCIAL INFORMATION
Yellow Roadway Corporation and Subsidiaries
For the Three Months and Twelve Months Ended December 31
(Amounts in thousands except per share data)
(Unaudited)
Three Months
2004 2003(a) %
Operating revenue:
Yellow Transportation $824,491 $722,007 14.2
Roadway Express 822,227 131,248 n/m
New Penn 69,470 9,770 n/m
Meridian IQ 59,861 41,501 44.2
Corporate (1,912) (1,161) (64.7)
Consolidated 1,774,137 903,365
Reported operating income (loss):
Yellow Transportation 55,728 21,210 162.7
Roadway Express 54,840 (6,075) n/m
New Penn 8,668 (221) n/m
Meridian IQ 1,484 961 54.4
Corporate (9,270) (9,177) (1.0)
Consolidated 111,450 6,698
Adjustments to operating income by
segment(b):
Yellow Transportation (2,329) 18,641
Roadway Express (1,668) 6,075
New Penn 40 221
Meridian IQ - 57
Corporate - 2,478
Consolidated (3,957) 27,472
Adjusted operating income (loss):
Yellow Transportation 53,399 39,851 34.0
Roadway Express 53,172 - n/m
New Penn 8,708 - n/m
Meridian IQ 1,484 1,018 45.8
Corporate (9,270) (6,699) (38.4)
Consolidated $107,493 $34,170
Reported operating ratio:
Yellow Transportation 93.2% 97.1%
Roadway Express 93.3% n/m
New Penn 87.5% n/m
Consolidated 93.7% 99.3%
Adjusted operating ratio:
Yellow Transportation 93.5% 94.5%
Roadway Express 93.5%
New Penn 87.5%
Consolidated 93.9%
Reconciliation of reported diluted
earnings per share (EPS) to adjusted
diluted EPS:
Reported diluted EPS $1.24 $(0.02)
Gains on property disposals (0.05) (0.01)
Contingent convertible dilution
impact(c) 0.05 -
Acquisition charges - operating &
nonoperating - 0.17
Conforming accounting policies & legal
provision - 0.37
Roadway LLC net loss (12/12 - 12/31) &
share dilution - 0.20
Adjusted diluted EPS 1.24 0.71
Twelve Months
2004 2003(a) %
Operating revenue:
Yellow Transportation $3,180,590 $2,811,892 13.1
Roadway Express 3,119,927 131,248 n/m
New Penn 260,572 9,770 n/m
Meridian IQ 213,199 120,245 77.3
Corporate (6,803) (4,539) (49.9)
Consolidated 6,767,485 3,068,616
Reported operating income (loss):
Yellow Transportation 191,546 119,906 59.7
Roadway Express 158,334 (6,075) n/m
New Penn 33,897 (221) n/m
Meridian IQ 3,738 288 n/m
Corporate (25,914) (25,296)(d) (2.4)
Consolidated 361,601 88,602
Adjustments to operating income by
segment(b):
Yellow Transportation (3,113) 19,020
Roadway Express (1,466) 6,075
New Penn 32 221
Meridian IQ - 482
Corporate - 2,960
Consolidated (4,547) 28,758
Adjusted operating income (loss):
Yellow Transportation 188,433 138,926 35.6
Roadway Express 156,868 - n/m
New Penn 33,929 - n/m
Meridian IQ 3,738 770 n/m
Corporate (25,914) (22,336) (16.0)
Consolidated $357,054 $117,360
Reported operating ratio:
Yellow Transportation 94.0% 95.7%
Roadway Express 94.9% n/m
New Penn 87.0% n/m
Consolidated 94.7% 97.1%
Adjusted operating ratio:
Yellow Transportation 94.1% 95.1%
Roadway Express 95.0%
New Penn 87.0%
Consolidated 94.7%
Reconciliation of reported diluted
EPS to adjusted diluted EPS:
Reported diluted EPS $3.75 $1.33
Gains on property disposals (0.06) -
Contingent convertible dilution
impact(c) 0.03 -
Acquisition charges - operating &
nonoperating - 0.34
Conforming accounting policies &
legal provision - 0.39
Roadway LLC net loss (12/12 - 12/31)
& share dilution - 0.21
Write off debt issuance costs -
nonoperating 0.24 -
Adjusted diluted EPS 3.96 2.27
(a) Includes the results of Roadway LLC for December 12 through 31.
(b) Management excludes these items when evaluating operating income and
segment performance to more accurately compare the results of our core
operations among periods. Adjustments presented in the 2004 periods
herein consist of property gains and losses.
(c) Computed based on a weighted average share amount of $51.01 and $40.76
resulting in 1,942,000 additional diluted shares and 412,000
additional diluted shares for the three and twelve months ended
December 31, 2004, respectively.
(d) The 2003 amount includes approximately $4 million for an industry
conference that we host every other year.
SOURCE Yellow Roadway Corporation
-0- 01/27/2005
/CONTACT: Investors, Stephen Bruffett of Yellow Roadway Corporation,
+1-913-696-6108, steve.bruffett@yellowroadway.com , or Media, Suzanne Dawson
of Linden Alschuler & Kaplan, +1-212-329-1420, sdawson@lakpr.com /
/Web site: http://www.yellowroadway.com /
(YELL)
CO: Yellow Roadway Corporation
ST: Kansas
IN: TRN
SU: ERN CCA MAV ERP
AB-CM
-- CGTH049 --
0849 01/27/2005 16:02 EST http://www.prnewswire.com