Yellow Corporation Reports Solid First Quarter EPS of $.19
OVERLAND PARK, Kan., Apr 21, 2003 -- Yellow Corporation (Nasdaq: YELL) today reported first quarter 2003 income of $5.6 million, or $.19 per share, up substantially from about breakeven performance in the first quarter of 2002.
Yellow Corporation reported the following consolidated results for the first quarter of 2003:
-- Operating revenue of $681 million, a 17.7% increase over $579 million in first quarter 2002-- Operating income of $11.8 million compared to $2.7 million in first quarter 2002
"Yellow Transportation and Meridian IQ are performing very solidly," said Bill Zollars, Chairman, President and CEO of Yellow Corporation. "The first quarter of 2003 included weather-related expenses of approximately $5.0 million, costs of about $4.0 million for an industry conference we host every other year and a benefit of about a million dollars from an insurance recovery. Even with the net impact of these first quarter items, we were able to generate substantial revenue and earnings growth. During the first quarter, underlying economic conditions remained steady."
"The growth in Exact Express highlights the effectiveness of our one-stop shopping strategy," Zollars continued. "When it comes to big shipments for business, our customers can rely on Yellow to manage their transportation needs whatever the mode, speed or destination."
Yellow Transportation
Yellow Transportation reported first quarter 2003 results as follows:
-- Revenue of $660 million, up 16.9% from $565 million in first quarter 2002
-- Operating income of $19.5 million, up from $6.7 million in first quarter 2002
-- Operating ratio of 97.0% compared to 98.8% in first quarter 2002
"Yellow Transportation continues to excel at pricing discipline, cost management and service quality," said Zollars. "Maintaining the right balance between business volumes and pricing resulted in significant profit improvement."
Less-than-truckload (LTL) revenue per day was up 17.0% over the first quarter of 2002, primarily reflecting a 9.2% increase in LTL tonnage per day and a 7.1% improvement in LTL revenue per hundred weight. First quarter 2003 business volumes benefited primarily from the September 2002 closure of a significant competitor and the continued penetration of premium services.
Meridian IQ
Meridian IQ, entering its second year of operations, reported the following first quarter 2003 results:
-- Operating revenue of $22 million, up 43% over $15 million in first quarter 2002-- Operating loss of $.9 million compared to a $1.5 million loss in first quarter 2002
"Meridian IQ continues to show significant growth in a challenging economic environment," said Zollars. "Signing 12 new contracts during the first quarter, which brings our total contractual customers to over 160, demonstrates the value of our transportation management solutions."
Outlook
"As a result of the strong performance of Yellow Transportation and Meridian IQ, we remain comfortable with our full year 2003 guidance of $2.25 to $2.35 per share, and expect the second quarter to be between $.50 and $.60 per share," Zollars stated. "We are assuming that current economic activity continues throughout 2003. However, due to our significant operating leverage, we are well positioned to take advantage of improved economic conditions when they occur."
Review of Financial Results
A teleconference review of Yellow Corporation first quarter 2003 financial results has been scheduled for Tuesday, April 22, 2003, beginning at 9:30 a.m. Eastern, 8:30 a.m. Central. Hosting the conference call will be: Bill Zollars, Chairman, President and CEO of Yellow Corporation; Don Barger, CFO of Yellow Corporation; James Welch, President of Yellow Transportation; and Jim Ritchie, President of Meridian IQ.
To participate, please dial 1-888-609-3912 and allow five to ten minutes prior to the start of the call. The conference call will be webcast live via StreetEvents at www.streetevents.com and via the Yellow Corporation Internet site www.yellowcorp.com . An audio playback will be available until April 30, 2003 by calling 1-800-642-1687 then dialing the access code 9321653. In addition, an audio playback will be available for 30 days via the StreetEvents and Yellow Corporation 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," "believe," "intend," 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), labor relations, inclement weather, price and availability of fuel, competitor pricing activity, expense volatility, changes in and customer acceptance of new technology and a downturn in general or regional economic activity.
Yellow Corporation is a holding company that through wholly owned operating subsidiaries offers its customers a wide range of asset and non- asset based transportation services integrated by technology. Its largest subsidiary, Yellow Transportation, offers a full range of regional, national and international services for the movement of industrial, commercial and retail goods. Meridian IQ is a non-asset global transportation management company that plans and coordinates the movement of goods worldwide. Yellow Technologies provides innovative technology solutions and services exclusively for Yellow Corporation companies. Headquartered in Overland Park, Kansas, Yellow Corporation employs approximately 23,000 people.
CONSOLIDATED BALANCE SHEETS
Yellow Corporation and Subsidiaries
(Amounts in thousands except per share data)
(Unaudited)
March 31, December 31,
2003 2002
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $23,336 $28,714
Accounts receivable 324,900 327,913
Prepaid expenses and other 52,921 68,726
Total current assets 401,157 425,353
Property and equipment, net of accumulated
depreciation of $1,122,794 and $1,114,120 570,336 564,976
Goodwill and other assets 54,156 52,656
Total assets $1,025,649 $1,042,985
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $77,913 $114,989
Wages, vacations, and employees' benefits 166,449 159,998
Other current and accrued liabilities 102,469 101,111
ABS borrowings 50,000 50,000
Current maturities of long-term debt 35,260 24,261
Total current liabilities 432,091 450,359
OTHER LIABILITIES:
Long-term debt, less current portion 39,004 50,024
Claims and other liabilities 187,913 182,644
Total other liabilities 226,917 232,668
SHAREHOLDERS' EQUITY:
Common stock, $1 par value per share 31,828 31,825
Capital surplus 80,654 80,610
Retained earnings 331,100 325,474
Accumulated other comprehensive loss (34,707) (35,596)
Unamortized restricted stock awards (932) (1,053)
Treasury stock, at cost (2,244 shares) (41,302) (41,302)
Total shareholders' equity 366,641 359,958
Total liabilities and shareholders'
equity $1,025,649 $1,042,985
STATEMENTS OF CONSOLIDATED OPERATIONS
Yellow Corporation and Subsidiaries
For the Three Months Ended March 31
(Amounts in thousands except per share data)
(Unaudited)
2003 2002
OPERATING REVENUE $681,093 $578,802
OPERATING EXPENSES:
Salaries, wages and benefits 438,748 390,239
Operating expenses and supplies 109,943 81,068
Operating taxes and licenses 19,767 18,379
Claims and insurance 12,724 13,580
Depreciation and amortization 20,268 18,929
Purchased transportation 67,873 53,246
Losses on property disposals, net 11 468
Spin-off and reorganization charges - 236
Total operating expenses 669,334 576,145
OPERATING INCOME 11,759 2,657
NONOPERATING (INCOME) EXPENSES:
Interest expense 2,646 2,310
ABS facility charges - 754
Other, net (93) (158)
Nonoperating expenses, net 2,553 2,906
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES 9,206 (249)
INCOME TAX PROVISION (BENEFIT) 3,580 (102)
INCOME (LOSS) FROM CONTINUING OPERATIONS 5,626 (147)
Loss from discontinued operations, net - (72,889)
NET INCOME (LOSS) $5,626 $(73,036)
AVERAGE SHARES OUTSTANDING-BASIC 29,583 24,934
AVERAGE SHARES OUTSTANDING-DILUTED 29,818 25,259
BASIC EARNINGS (LOSS) PER SHARE:
Income (loss) from continuing operations $0.19 $(0.01)
Loss from discontinued operations - (2.92)
Net income (loss) $0.19 $(2.93)
DILUTED EARNINGS (LOSS) PER SHARE:
Income (loss) from continuing operations $0.19 $(0.01)
Loss from discontinued operations - (2.88)
Net income (loss) $0.19 $(2.89)
STATEMENTS OF CONSOLIDATED CASH FLOWS
Yellow Corporation and Subsidiaries
For the Three Months Ended March 31
(Amounts in thousands)
(Unaudited)
2003 2002
OPERATING ACTIVITIES:
Net income (loss) $5,626 $(73,036)
Noncash items included in net income (loss):
Depreciation and amortization 20,268 18,929
Loss from discontinued operations - 72,889
Losses on property disposals, net 11 468
Changes in assets and liabilities, net:
Accounts receivable 3,013 (19,212)
Accounts receivable securitizations - 30,500
Accounts payable (37,076) (27,299)
Other working capital items 23,594 42,675
Claims and other 5,183 3,028
Other (564) 2,188
Net change in operating activities of
discontinued operations - (3,050)
Net cash from operating activities 20,055 48,080
INVESTING ACTIVITIES:
Acquisition of property and equipment (26,141) (25,380)
Proceeds from disposal of property and
equipment 691 (580)
Net capital expenditures of discontinued
operations - (1,275)
Net cash used in investing activities (25,450) (27,235)
FINANCING ACTIVITIES:
Decrease in long-term debt (21) (25,418)
ABS borrowings, net - -
Proceeds from stock options and other, net 38 2,039
Net cash provided by (used in) financing
activities 17 (23,379)
NET DECREASE IN CASH AND CASH EQUIVALENTS (5,378) (2,534)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 28,714 19,214
CASH AND CASH EQUIVALENTS, END OF PERIOD $23,336 $16,680
SUPPLEMENTAL FINANCIAL INFORMATION
Yellow Corporation and Subsidiaries
For the Three Months Ended March 31
(Amounts in thousands except per share data)
(Unaudited)
2003 2002 %
Operating revenue:
Yellow Transportation $660,125 $564,643 16.9
Meridian IQ 22,083 15,402 43.4
Corporate/Other (1,115) (1,243) 10.3
Consolidated 681,093 578,802 17.7
Operating income:
Yellow Transportation 19,500 6,662 192.7
Meridian IQ (893) (1,515) 41.1
Corporate/Other (6,848) (A) (2,490) (175.0)
Consolidated 11,759 2,657 342.6
Losses on property disposals and
spin-off and reorganization charges:
Yellow Transportation 12 571
Meridian IQ - 81
Corporate/Other (1) 52
Consolidated 11 704
Operating income excluding property
disposals, spin-off and reorganization
charges (B):
Yellow Transportation 19,512 7,233 169.8
Meridian IQ (893) (1,434) 37.7
Corporate/Other (6,849) (2,438) (180.9)
Consolidated 11,770 3,361 250.2
Operating ratio:
Yellow Transportation 97.0% 98.8%
Consolidated 98.3% 99.5%
Operating ratio excluding property
disposals, spin-off and reorganization
charges:
Yellow Transportation 97.0% 98.7%
Consolidated 98.3% 99.4%
Diluted EPS from continuing operations $0.19 $(0.01)
Diluted EPS from property disposals,
spin-off and reorganization charges - 0.02
Diluted EPS from continuing operations
excluding property disposals, spin-off
and reorganization charges 0.19 0.01
Pro forma stock option expense
(after tax) (C) 549 360
Pro forma stock option impact on
diluted EPS from continuing
operations (0.02) (0.01)
(A) Includes approximately $4 million for an industry conference that
Yellow Corporation hosts every other year.
(B) Management does not consider these items a component of recurring
operations and excludes them when evaluating operating income.
(C) The fair value in accordance with SFAS 123, Accounting for Stock-Based
Compensation, not reflected in income.
STATISTICAL INFORMATION
Yellow Transportation, Inc.
For the Three Months Ended March 31
(Amounts in thousands except per unit data)
Three Months Amount/Workday
2003 2002 % 2003 2002 %
Workdays 63 63
Revenue:
LTL 616,006 526,654 17.0 9,777.9 8,359.6 17.0
TL 44,289 40,469 9.4 703.0 642.4 9.4
Subtotal - pickup
basis 660,295 567,123 16.4 10,480.9 9,002.0 16.4
Revenue recognition
adjustment (170) (2,480) (93.1) (2.7) (39.4) (93.1)
Total - as reported 660,125 564,643 16.9 10,478.2 8,962.6 16.9
Tonnage - pickup basis:
LTL 1,529 1,401 9.2 24.27 22.23 9.2
TL 277 267 3.7 4.40 4.24 3.7
Total 1,806 1,668 8.3 28.67 26.47 8.3
Shipments - pickup basis:
LTL 3,119 2,814 10.9 49.51 44.66 10.9
TL 38 37 3.2 0.60 0.59 3.1
Total 3,157 2,851 10.8 50.11 45.25 10.8
Revenue/cwt. - pickup
basis:
LTL 20.14 18.80 7.1
TL 7.99 7.57 5.5
Total 18.28 17.00 7.5
Revenue/cwt. - pickup
basis:
(excluding fuel
surcharge)
LTL 19.35 18.66 3.7
TL 7.72 7.53 2.5
Total 17.57 16.88 4.1
Revenue/shipment -
pickup basis:
LTL 197.50 187.17 5.5
TL 1,165.47 1,098.84 6.1
Total 209.15 198.95 5.1
SOURCE Yellow Corporation
Analyst Contact, Stephen Bruffett of Yellow Corporation,+1-913-696-6108, steve.bruffett@yellowcorp.com , or Media Contact, Suzanne
Dawson of Linden Alschuler & Kaplan, +1-212-329-1420, sdawson@lakpr.com
http://www.yellowcorp.com