Swift Transportation Company (NYSE: SWFT):
-
Operating Revenue Increases $114.3 Million or 15.5%, over 2010
Second Quarter
-
Operating Income Increases $11.4 Million, or 18.6%, from 2010
Second Quarter
-
Operating Ratio Improves 20 basis points, while Adjusted Operating
Ratio* Improves 100 basis points from 2010 Second Quarter
(* 2011 and 2010 results adjusted as detailed below.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
Change
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
($ in millions, except per share data)
|
|
|
|
|
|
|
Operating revenue
|
|
|
|
$
|
850,470
|
|
|
|
|
$
|
736,185
|
|
|
|
|
|
15.5
|
%
|
|
|
|
|
Revenue excluding fuel surcharge revenue
|
|
|
|
$
|
672,154
|
|
|
|
|
$
|
624,082
|
|
|
|
|
|
7.7
|
%
|
|
|
|
|
Operating Ratio
|
|
|
|
|
91.5
|
%
|
|
|
|
|
91.7
|
%
|
|
|
|
20
|
bps
|
|
Adjusted Operating Ratio
|
|
|
|
|
89.2
|
%
|
|
|
|
|
90.2
|
%
|
|
|
|
100
|
bps
|
|
|
|
|
Diluted EPS
|
|
|
|
$
|
0.14
|
|
|
|
|
$
|
(0.38
|
)
|
|
|
|
$
|
0.52
|
|
|
Adjusted EPS
|
|
|
|
$
|
0.18
|
|
|
|
|
$
|
(0.08
|
)
|
|
|
|
$
|
0.26
|
|
Swift Transportation Company (NYSE: SWFT), a multi-faceted
transportation services company and the largest truckload carrier in
North America, today reported adjusted diluted earnings per share, or
Adjusted EPS, of $0.18 per share for the second quarter ended June 30,
2011, compared to an adjusted loss of $0.08 per share in the same
quarter of 2010. Diluted earnings per share in accordance with GAAP for
the second quarter of 2011 and 2010 was $0.14 per share and a loss of
$0.38 per share, respectively. A reconciliation of GAAP results to
non-GAAP results, as adjusted to exclude certain non-cash or special
items, is provided at the end of this release.
Operating revenue for the second quarter of 2011 increased 15.5% over
the second quarter of 2010. Excluding fuel surcharge revenue, revenue
increased 7.7% over the second quarter of 2010, driven by a 4.3%
increase in trucking volumes and a 4.7% increase in average trucking
rates. These increases contributed to a 4.8% increase in productivity,
measured by weekly trucking revenue per tractor in the 2011 quarter over
the 2010 quarter.
The increases in volumes and pricing were the primary reasons for the
100 basis point improvement in Adjusted Operating Ratio, and were
partially offset by increases in fuel and equipment maintenance expenses.
Jerry Moyes, Chief Executive Officer, commented, "We are proud of the
efforts of our team in achieving our highest second quarter operating
income of the last five years while continuing to maintain excellent
customer service, as evidenced by our 12 Carrier of the Year awards so
far this year. We are pleased to see rate improvement in line with our
expectations and plan to continue our focus on cost control and
disciplined execution."
Net income in accordance with GAAP for the second quarter of 2011 was
$19.6 million, or $0.14 per diluted share, compared to a net loss of
$23.1 million, or $0.38 per share, in the second quarter of the prior
year. The results in accordance with GAAP for the second quarter of 2011
include non-cash charges of $4.3 million pre-tax for the amortization of
certain intangible assets recorded in our 2007 going-private transaction
and $4.0 million pre-tax in derivative interest expense for the
amortization of previous losses recorded in accumulated other
comprehensive income related to the interest rate swaps we terminated in
December 2010. The results in accordance with GAAP for the second
quarter of 2010 include non-cash charges of $4.9 million pre-tax for the
amortization of the same intangibles, as well as $5.7 million pre-tax in
derivative interest expense for the change in market value of the
interest rate swaps.
We will be filing a Current Report on Form 8-K with the Securities and
Exchange Commission to include this press release as well as other
supplemental financial information subsequent to the issuance of this
press release.
In this press release, in addition to the GAAP results, we present
financial results excluding the impact of some or all of the above items
in measures such as adjusted operating income and operating ratio, and
adjusted EPS. Such measures are not presented in accordance with GAAP
and should be considered in addition to, not as a substitute for, or
superior to, measures of financial performance in accordance with GAAP.
The calculation of each measure, including a reconciliation to the most
closely related GAAP measure and the reasons management believes each
non-GAAP measure is useful, are included in the attached schedules.
Conference Call and Web Cast
Swift will hold a live conference call with a slide presentation to
discuss these results at 1:00 p.m. Eastern time on Thursday, July 21,
2011. Participants may access the call using the following dial-in
numbers: U.S./Canada: (866) 379-9391; International/Local: (706)
634-0901; Confirmation ID: 84216818. The slides presented during the
call, as well as a link for the replay, will be available via our
investor relations website: http://ir.swifttrans.com/ under
the Event Calendar section.
General Information
Swift is based in Phoenix, Arizona. As of June 30, 2011, Swift operated
a tractor fleet of approximately 16,900 units comprised of 12,800
tractors driven by company drivers and 4,100 owner-operator tractors, a
fleet of 49,300 trailers, and 5,700 intermodal containers from 34 major
terminals positioned near major freight centers and traffic lanes in the
United States and Mexico. Swift offers customers the opportunity for
"one-stop shopping" for their truckload transportation needs through a
broad spectrum of services and equipment. Swift's extensive suite of
services includes general, dedicated, and cross-border U.S./Mexico
truckload services through dry van, temperature-controlled, flatbed, and
specialized trailers, in addition to rail intermodal and non-asset based
freight brokerage and logistics management services, making it an
attractive choice for a broad array of customers.
|
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
(Amounts in thousands, except per share data)
|
|
|
|
Operating revenue
|
|
|
|
$
|
850,470
|
|
|
|
|
$
|
736,185
|
|
|
|
|
$
|
1,609,359
|
|
|
|
|
$
|
1,391,015
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and employee benefits
|
|
|
|
|
202,556
|
|
|
|
|
|
186,918
|
|
|
|
|
|
398,032
|
|
|
|
|
|
364,721
|
|
|
Operating supplies and expenses
|
|
|
|
|
58,766
|
|
|
|
|
|
54,221
|
|
|
|
|
|
115,870
|
|
|
|
|
|
102,051
|
|
|
Fuel
|
|
|
|
|
168,537
|
|
|
|
|
|
115,494
|
|
|
|
|
|
318,818
|
|
|
|
|
|
221,576
|
|
|
Purchased transportation
|
|
|
|
|
223,680
|
|
|
|
|
|
197,789
|
|
|
|
|
|
417,717
|
|
|
|
|
|
373,491
|
|
|
Rental expense
|
|
|
|
|
19,224
|
|
|
|
|
|
19,493
|
|
|
|
|
|
37,213
|
|
|
|
|
|
38,396
|
|
|
Insurance and claims
|
|
|
|
|
27,876
|
|
|
|
|
|
29,479
|
|
|
|
|
|
50,601
|
|
|
|
|
|
49,686
|
|
|
Depreciation and amortization of property and equipment
|
|
|
|
|
51,553
|
|
|
|
|
|
48,403
|
|
|
|
|
|
101,911
|
|
|
|
|
|
108,422
|
|
|
Amortization of intangibles
|
|
|
|
|
4,617
|
|
|
|
|
|
5,199
|
|
|
|
|
|
9,344
|
|
|
|
|
|
10,677
|
|
|
Impairments
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
|
1,274
|
|
|
Gain on disposal of property and equipment
|
|
|
|
|
(700
|
)
|
|
|
|
|
(1,757
|
)
|
|
|
|
|
(2,955
|
)
|
|
|
|
|
(3,205
|
)
|
|
Communication and utilities
|
|
|
|
|
6,335
|
|
|
|
|
|
6,132
|
|
|
|
|
|
12,795
|
|
|
|
|
|
12,554
|
|
|
Operating taxes and licenses
|
|
|
|
|
15,459
|
|
|
|
|
|
13,625
|
|
|
|
|
|
30,717
|
|
|
|
|
|
26,990
|
|
|
Total operating expenses
|
|
|
|
|
777,903
|
|
|
|
|
|
674,996
|
|
|
|
|
|
1,490,063
|
|
|
|
|
|
1,306,633
|
|
|
Operating income
|
|
|
|
|
72,567
|
|
|
|
|
|
61,189
|
|
|
|
|
|
119,296
|
|
|
|
|
|
84,382
|
|
|
Other (income) expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
36,631
|
|
|
|
|
|
62,768
|
|
|
|
|
|
74,132
|
|
|
|
|
|
125,364
|
|
|
Derivative interest expense
|
|
|
|
|
4,003
|
|
|
|
|
|
18,292
|
|
|
|
|
|
8,683
|
|
|
|
|
|
42,006
|
|
|
Interest income
|
|
|
|
|
(471
|
)
|
|
|
|
|
(283
|
)
|
|
|
|
|
(938
|
)
|
|
|
|
|
(503
|
)
|
|
Other
|
|
|
|
|
(664
|
)
|
|
|
|
|
(1,469
|
)
|
|
|
|
|
(1,175
|
)
|
|
|
|
|
(1,840
|
)
|
|
Total other (income) expenses, net
|
|
|
|
|
39,499
|
|
|
|
|
|
79,308
|
|
|
|
|
|
80,702
|
|
|
|
|
|
165,027
|
|
|
Income (loss) before income taxes
|
|
|
|
|
33,068
|
|
|
|
|
|
(18,119
|
)
|
|
|
|
|
38,594
|
|
|
|
|
|
(80,645
|
)
|
|
Income tax expense (benefit)
|
|
|
|
|
13,485
|
|
|
|
|
|
4,960
|
|
|
|
|
|
15,806
|
|
|
|
|
|
(4,565
|
)
|
|
Net income (loss)
|
|
|
|
$
|
19,583
|
|
|
|
|
$
|
(23,079
|
)
|
|
|
|
$
|
22,788
|
|
|
|
|
$
|
(76,080
|
)
|
|
Basic earnings (loss) per share
|
|
|
|
$
|
0.14
|
|
|
|
|
$
|
(0.38
|
)
|
|
|
|
$
|
0.16
|
|
|
|
|
$
|
(1.27
|
)
|
|
Diluted earnings (loss) per share
|
|
|
|
$
|
0.14
|
|
|
|
|
$
|
(0.38
|
)
|
|
|
|
$
|
0.16
|
|
|
|
|
$
|
(1.27
|
)
|
|
Shares used in per share calculations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
139,479
|
|
|
|
|
|
60,117
|
|
|
|
|
|
138,807
|
|
|
|
|
|
60,117
|
|
|
Diluted
|
|
|
|
|
140,716
|
|
|
|
|
|
60,117
|
|
|
|
|
|
139,812
|
|
|
|
|
|
60,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EPS RECONCILIATION (UNAUDITED) (a)
|
|
THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
|
|
|
Diluted earnings (loss) per share
|
|
|
|
$
|
0.14
|
|
|
|
$
|
(0.38
|
)
|
|
|
|
$
|
0.16
|
|
|
|
$
|
(1.27
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit)
|
|
|
|
|
0.10
|
|
|
|
|
0.08
|
|
|
|
|
|
0.11
|
|
|
|
|
(0.08
|
)
|
|
Income (loss) before income taxes
|
|
|
|
|
0.24
|
|
|
|
|
(0.30
|
)
|
|
|
|
|
0.28
|
|
|
|
|
(1.34
|
)
|
|
Non-cash impairments(b)
|
|
|
|
|
--
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
0.02
|
|
|
Other special non-cash items(c)
|
|
|
|
|
--
|
|
|
|
|
--
|
|
|
|
|
|
--
|
|
|
|
|
0.12
|
|
|
Mark-to-market adjustment of interest rate swaps(d)
|
|
|
|
|
--
|
|
|
|
|
0.09
|
|
|
|
|
|
--
|
|
|
|
|
0.28
|
|
|
Amortization of certain intangibles(e)
|
|
|
|
|
0.03
|
|
|
|
|
0.08
|
|
|
|
|
|
0.06
|
|
|
|
|
0.17
|
|
|
Amortization of unrealized losses on interest rate swaps(f)
|
|
|
|
|
0.03
|
|
|
|
|
--
|
|
|
|
|
|
0.06
|
|
|
|
|
--
|
|
|
Adjusted income (loss) before income taxes
|
|
|
|
|
0.29
|
|
|
|
|
(0.13
|
)
|
|
|
|
|
0.40
|
|
|
|
|
(0.75
|
)
|
|
Provision for income tax (benefit) expense at normalized effective
rate
|
|
|
|
|
0.11
|
|
|
|
|
(0.05
|
)
|
|
|
|
|
0.16
|
|
|
|
|
(0.29
|
)
|
|
Adjusted EPS
|
|
|
|
$
|
0.18
|
|
|
|
$
|
(0.08
|
)
|
|
|
|
$
|
0.24
|
|
|
|
$
|
(0.46
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
We define Adjusted EPS as (1) income (loss) before income taxes plus
(i) amortization of the intangibles from our 2007 going-private
transaction, (ii) non-cash impairments, (iii) other special non-cash
items, (iv) excludable transaction costs, (v) the mark-to-market
adjustment on our interest rate swaps that is recognized in the
statement of operations in a given period, and (vi) the amortization
of previous losses recorded in accumulated other comprehensive
income related to the interest rate swaps we terminated upon our IPO
and refinancing transactions in December 2010; (2) reduced by income
taxes at 39%, our normalized effective tax rate; (3) divided by
weighted average diluted shares outstanding. We believe the
presentation of financial results excluding the impact of the items
noted above provides a consistent basis for comparing our results
from period to period and to those of our peers due to the
non-comparable nature of the intangibles from our going-private
transaction, the historical volatility of the interest rate
derivative agreements and the non-operating nature of the impairment
charges, transaction costs and other adjustment items. Adjusted EPS
is not presented in accordance with GAAP and should be considered in
addition to, not as a substitute for, or superior to, measures of
financial performance in accordance with GAAP. The numbers reflected
in the above table are calculated on a per share basis and may not
foot due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
2.
|
|
Revenue equipment with a carrying amount of $3.6 million was written
down to its fair value of $2.3 million, resulting in an impairment
charge of $1.3 million in the first quarter of 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
|
Incremental pre-tax depreciation expense of $7.4 million reflecting
management's revised estimates regarding salvage value and useful
lives for approximately 7,000 dry van trailers, which management
decided during the first quarter of 2010 to scrap over the next few
years.
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
|
Mark-to-market adjustment of interest rate swaps of $5.7 million and
$16.8 million in the three and six months ended June 30, 2010,
respectively, reflects the portion of the change in fair value of
these financial instruments which was recorded in earnings and
excludes any portion recorded in accumulated other comprehensive
income under cash flow hedge accounting.
|
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
|
Amortization of certain intangibles reflects the non-cash
amortization expense of $4.3 million and $4.9 million for the three
months ended June 30, 2011 and 2010, respectively, and $8.8 million
and $10.1 million for the six months ended June 30, 2011 and 2010,
respectively, relating to certain intangible assets identified in
the 2007 going-private transaction through which Swift Corporation
acquired Swift Transportation Co.
|
|
|
|
|
|
|
|
|
|
|
|
|
6.
|
|
Amortization of unrealized losses on interest rate swaps reflects
the non-cash amortization expense of $4.0 million and $8.7 million
for the three and six months ended June 30, 2011, respectively,
included in derivative interest expense in the consolidated
statements of operations and is comprised of previous losses
recorded in accumulated other comprehensive income related to the
interest rate swaps we terminated upon our IPO and concurrent
refinancing transactions in December 2010. Such losses were incurred
in prior periods when hedge accounting applied to the swaps and are
being expensed in relation to the hedged interest payments through
the original maturity of the swaps in August 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED OPERATING INCOME AND OPERATING RATIO RECONCILIATION
(UNAUDITED) (a)
|
|
THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|
|
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
|
|
|
(Amounts in thousands)
|
|
Operating revenue
|
$
|
850,470
|
|
$
|
736,185
|
|
$
|
1,609,359
|
|
$
|
1,391,015
|
|
|
Less: Fuel surcharge revenue
|
|
178,316
|
|
|
112,103
|
|
|
316,133
|
|
|
200,919
|
|
|
Revenue excluding fuel surcharge revenue
|
|
672,154
|
|
|
624,082
|
|
|
1,293,226
|
|
|
1,190,096
|
|
|
|
|
|
|
|
Operating expense
|
|
777,903
|
|
|
674,996
|
|
|
1,490,063
|
|
|
1,306,633
|
|
|
Adjusted for:
|
|
|
|
|
|
Fuel surcharge revenue
|
|
(178,316
|
)
|
|
(112,103
|
)
|
|
(316,133
|
)
|
|
(200,919
|
)
|
|
Non-cash impairments
|
|
--
|
|
|
--
|
|
|
--
|
|
|
(1,274
|
)(b)
|
|
Other items
|
|
--
|
|
|
--
|
|
|
--
|
|
|
(7,382
|
)(c)
|
|
Adjusted operating expense
|
|
599,587
|
|
|
562,893
|
|
|
1,173,930
|
|
|
1,097,058
|
|
|
Adjusted operating income
|
$
|
72,567
|
|
$
|
61,189
|
|
$
|
119,296
|
|
$
|
93,038
|
|
|
Adjusted Operating Ratio (d)
|
|
89.2
|
%
|
|
90.2
|
%
|
|
90.8
|
%
|
|
92.2
|
%
|
|
Operating Ratio
|
|
91.5
|
%
|
|
91.7
|
%
|
|
92.6
|
%
|
|
93.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
We define Adjusted Operating Ratio as (a) total operating expenses,
less (i) fuel surcharge revenue, (ii) non-cash impairment charges,
(iii) certain other items, and (iv) excludable transaction costs, as
a percentage of (b) total revenue excluding fuel surcharge revenue.
We believe fuel surcharge is sometimes volatile and eliminating the
impact of this source of revenue (by netting fuel surcharge revenue
against fuel expense) affords a more consistent basis for comparing
our results of operations. We also believe excluding impairments and
other special items enhances the comparability of our performance
from period to period. Adjusted Operating Ratio is not a recognized
measure under GAAP. Adjusted Operating Ratio should be considered in
addition to, not as a substitute for, or superior to, measures of
financial performance in accordance with GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
2.
|
|
Revenue equipment with a carrying amount of $3.6 million was written
down to its fair value of $2.3 million, resulting in an impairment
charge of $1.3 million in the first quarter of 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
|
Incremental pre-tax depreciation expense of $7.4 million reflecting
management's revised estimates regarding salvage value and useful
lives for approximately 7,000 dry van trailers, which management
decided during the first quarter of 2010 to scrap over the next few
years.
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
|
We have not included adjustments to Adjusted Operating Ratio to
reflect the non-cash amortization expense of $4.3 million and $4.9
million for the three months ended June 30, 2011 and 2010,
respectively, and $8.8 million and $10.1 million for the six months
ended June 30, 2011 and 2010, respectively, relating to certain
intangible assets identified in the 2007 going-private transaction
through which Swift Corporation acquired Swift Transportation Co.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING STATISTICS (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
2011
|
|
|
|
2010
|
|
Trucking revenue (1,2)
|
|
|
|
$
|
602,268
|
|
|
|
|
$
|
551,644
|
|
|
|
|
$
|
1,156,989
|
|
|
|
|
$
|
1,055,151
|
|
|
Weekly trucking revenue per tractor (2)
|
|
|
|
$
|
3,051
|
|
|
|
|
$
|
2,910
|
|
|
|
|
$
|
2,957
|
|
|
|
|
$
|
2,812
|
|
|
Deadhead miles percentage
|
|
|
|
|
11.76
|
%
|
|
|
|
|
11.90
|
%
|
|
|
|
|
11.94
|
%
|
|
|
|
|
12.06
|
%
|
|
Average loaded length of haul (miles)
|
|
|
|
|
428
|
|
|
|
|
|
436
|
|
|
|
|
|
429
|
|
|
|
|
|
437
|
|
|
|
|
Average tractors available for dispatch
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
11,151
|
|
|
|
|
|
10,783
|
|
|
|
|
|
11,128
|
|
|
|
|
|
10,765
|
|
|
Owner Operator
|
|
|
|
|
4,032
|
|
|
|
|
|
3,798
|
|
|
|
|
|
4,002
|
|
|
|
|
|
3,747
|
|
|
Total
|
|
|
|
|
15,183
|
|
|
|
|
|
14,581
|
|
|
|
|
|
15,130
|
|
|
|
|
|
14,512
|
|
|
|
|
|
|
Notes to Operating Statistics:
|
|
|
|
(1) In thousands.
|
|
|
|
(2) Excludes fuel surcharge, rail, third party carrier, leasing, and
other shop and miscellaneous revenue.
|
Jason Bates, Vice President Finance, and Investor Relations OfficerorGinnie Henkels, Executive Vice President and Chief Financial OfficerOffice: 602-269-9700