FOR IMMEDIATE RELEASE
USF CORPORATION REPORTS FIRST QUARTER RESULTS
Strong Demand Fuels LTL Profit Growth
| - EPS from continuing operations up 63% |
| - PremierPlus® revenue up 16% |
| - LTL tonnage increases 6% |
(Chicago – April 22, 2004)USF Corporation (NASDAQ:USFC) today reported income from continuing operations of $7.1 million for the first quarter ended April 3, 2004, compared to $4.2 million reported for the first quarter ended April 5, 2003, a 69% increase from the prior year period. Diluted earnings per share from continuing operations increased 63% to $.26 compared to $.16 in last year’s first quarter.
Revenue from continuing operations for the first quarter was $617 million versus $594 million reported for the first quarter of 2003, an increase of 3.9%. There were 66 working days in the first quarter of 2004 compared to 67 working days in the first quarter of 2003. Revenue per working day increased 5.5% from last year’s first quarter.
Richard P. DiStasio, President and Chief Executive Officer of USF Corporation commented, “Our first quarter results were strong. We experienced significant profit growth year-over-year within the LTL group. Included in these results was a 6.6% increase in revenue at USF Holland, our largest LTL carrier. Holland also recorded an improvement in their operating ratio (OR) of over 100 basis points. Also included in the LTL group’s results was a 10% increase in revenue at USF Reddaway. I am happy to report that our inter-regional LTL product, PremierPlus®, recorded strong revenue growth during the quarter. We are starting to reap the benefits of the cost-saving and revenue enhancing initiatives that we have put in place. Our management team is focused and we remain committed to our goals of sustainable financial success and value creation for our shareholders.”
Less-Than-Truckload (LTL)
Operating earnings for the LTL group were $24.0 million, versus $16.8 million for the prior year quarter, an increase of 43%. First quarter revenue in the LTL segment was $520 million, versus $489 million, for the year ago period, an increase of 6.3%. The LTL segment’s OR improved 120 basis points to 95.4 compared to 96.6 in the first quarter of 2003. Per working day revenue increased 8 % over the prior year quarter.
PremierPlus®, USF’s inter-regional product, posted a 16% increase in revenue from the prior year period to $69 million for the quarter.
LTL shipments increased 2.8% over 2003‘s first quarter and LTL tonnage increased 6.0% during the same period. Billed LTL revenue per shipment increased 2.1% from $127.84 to $130.50, including fuel surcharges. Billed LTL revenue per hundredweight decreased by 1.0%, from $11.27 to $11.16. Average weight per LTL shipment increased 3.1% to 1,169 pounds in the first quarter of 2004 versus 1,134 pounds in the first quarter of 2003. Average length of haul for LTL shipments was 497 miles versus 488 miles in the first quarter of 2003.
Truckload (TL)
USF’s truckload carrier recorded operating earnings up 55% to $0.8 million from $0.5 million in the year ago quarter. OR improved to 97.6, a decrease of 80 basis points from the 2003 first quarter OR of 98.4. Revenue for the quarter was up 8% to $34.3 million from $31.8 million in the first quarter of 2003.
Logistics
USF Logistics recorded an operating profit of $1.6 million for the first quarter 2004, versus $0.6 million for the first quarter 2003. Included in first quarter’s 2003 results was a $2.0 million charge relating to the Chapter 11 filing of one of Logistics previous customers. Excluding the $2.0 million charge, normalized 2003 earnings for Logistics would have been $2.6 million. Revenue for the Logistics group was $66.4 million versus $75.7 million for the prior year’s quarter, a decrease of 12.2 %.
CONFERENCE CALL
A conference call will be held at 7:30 am CDT, 8:30 am EDT, on Friday, April 23rd to discuss the results. Those wishing to participate should dial 1-888-245-7013. Callers should dial in 5 to 10 minutes prior to the start of the call. A telephone replay will also be available. To use the dial-in access, call 1-877-519-4471, PIN number 4685708 after 11:30 am CDT. The telephone replay will be available for seven days. After that time a transcript of the call will be available athttp://ir.usfc.com .
A live broadcast of the conference call will be available through the Company’s Web site atwww.usfc.com and alsowww.streetevents.com . To listen to the call, please go to one of the Web sites at least fifteen minutes early to download and install any necessary software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call at both Web sites. The conference call is the sole property of USF and any rebroadcast or transcription of the event without prior written consent of the Company is prohibited. The Company assumes no responsibility to update any information posted on its Web site.
USF Corporation, a $2.3 billion leader in the transportation industry, specializes in delivering comprehensive supply chain management solutions, including high-value next-day, regional and national LTL transportation, forward and reverse logistics, and premium regional and national truckload transportation. The Company serves the North American market, including the United States, Canada and Mexico, as well as the U.S. territories of Puerto Rico and Guam. The USF operating companies interact as a single system to provide services and flexibility to match the needs of their customers. USF Corporation is headquartered in Chicago, Illinois. For more information, visitwww.usfc.com.
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed from time to time in reports filed by the Company with the SEC including forms 8-K, 10-Q and 10-K.
Corporate Contact:
USF Corporation
James J. Hyland 773.824.2213
USF CorporationCondensed
Consolidated Statements of Operations
Unaudited (Dollars in Thousands, Except Per-Share Amounts)
| Quarter Ended | ||||||||
|---|---|---|---|---|---|---|---|---|
| April 3, 2004 | April 5, 2003 | |||||||
| Revenue: | ||||||||
| LTL Trucking | $ | 519,697 | $ | 488,863 | ||||
| TL Trucking | 34,274 | 31,750 | ||||||
| Logistics | 66,437 | 75,675 | ||||||
| Intercompany eliminations | (3,641 | ) | (2,586 | ) | ||||
| Total revenue from operations | 616,767 | 593,702 | ||||||
Income: | ||||||||
| LTL Trucking | 24,038 | 16,812 | ||||||
| TL Trucking | 812 | 523 | ||||||
| Logistics | 1,630 | 553 | ||||||
| Corporate and other | (9,392 | ) | (5,236 | ) | ||||
| Total income from operations | 17,088 | 12,652 | ||||||
| Non-operating income/(expenses) | ||||||||
| Interest expense | (5,209 | ) | (5,292 | ) | ||||
| Interest income | 571 | 211 | ||||||
| Other, net | (390 | ) | (255 | ) | ||||
| Net non-operating expenses | (5,028 | ) | (5,336 | ) | ||||
Income from continuing operations before income | ||||||||
| taxes and cumulative effect of accounting change | 12,060 | 7,316 | ||||||
| Income tax expense | (4,944 | ) | (3,076 | ) | ||||
| Income from continuing operations before cumulative | ||||||||
| effect of accounting change | 7,116 | 4,240 | ||||||
| Loss from discontinued operations, net of tax benefits of $5 | -- | (7 | ) | |||||
| Income before cumulative effect of | ||||||||
| accounting change | 7,116 | 4,233 | ||||||
| Cumulative effect of change in accounting | ||||||||
| for revenue recognition, net of tax benefit of $1,064 | -- | (1,467 | ) | |||||
| Net income | $ | 7,116 | $ | 2,766 | ||||
| Income per share from continuing operations | ||||||||
| - Basic | 0.26 | 0.16 | ||||||
| - Diluted | 0.26 | 0.16 | ||||||
Loss per share - cumulative effect of accounting change | ||||||||
| - Basic | -- | (0.06 | ) | |||||
| - Diluted | -- | (0.06 | ) | |||||
Net income per share - Basic | 0.26 | 0.10 | ||||||
| Net income per share - Diluted | 0.26 | 0.10 | ||||||
Average shares outstanding - Basic | 27,556,632 | 27,005,067 | ||||||
| Average shares outstanding - Diluted | 27,802,815 | 27,124,223 | ||||||
USF Corporation
Condensed Consolidated Balance Sheets
Unaudited (Dollars in Thousands)
| As of | ||||||||
|---|---|---|---|---|---|---|---|---|
| April 3, 2004 | December 31, 2003 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 118,198 | $ | 121,659 | ||||
| Accounts receivable, net | 308,343 | 271,849 | ||||||
| Other current assets | 70,890 | 65,731 | ||||||
| Total current assets | 497,431 | 459,239 | ||||||
Property and equipment, net | 747,714 | 753,902 | ||||||
| Intangibles and other long term assets | 144,961 | 144,947 | ||||||
| Total Assets | 1,390,106 | 1,358,088 | ||||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | 273,332 | 252,467 | ||||||
| Long-term debt | 250,071 | 250,087 | ||||||
| Insurance and other long-term liabilities | 190,441 | 190,745 | ||||||
| Stockholders' Equity | 676,262 | 664,789 | ||||||
| Total Liabilites and Stockholders' Equity | $ | 1,390,106 | $ | 1,358,088 | ||||
USF Corporation
Condensed Consolidated Statements of Cash Flows
Unaudited (Dollars in Thousands)
| Quarter Ended | ||||||||
|---|---|---|---|---|---|---|---|---|
| April 3, 2004 | April 5, 2003 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 7,116 | $ | 2,766 | ||||
| Net loss from discontinued operations | -- | 7 | ||||||
| Income from continuing operations after | ||||||||
| cumulative effect of accounting change | 7,116 | 2,773 | ||||||
| Cumulative effect of accounting changes, net of tax | -- | 1,467 | ||||||
| Depreciation of property and equipment | 26,225 | 25,903 | ||||||
| Other, net | (21,918 | ) | 4,707 | |||||
| Net cash provided by operating activities | 11,423 | 34,850 | ||||||
| Cash flows from investing activities: | ||||||||
| Acquisitions | -- | (1,883 | ) | |||||
| Capital expenditures | (21,445 | ) | (37,436 | ) | ||||
| Proceeds from sale of property and equipment | 2,197 | 1,991 | ||||||
| Net cash used in investing activities | (19,248 | ) | (37,328 | ) | ||||
| Net cash provided by (used in) financing | ||||||||
| activities | 4,364 | (4,382 | ) | |||||
| Net increase/(decrease) in cash | (3,461 | ) | (6,860 | ) | ||||
Cash at beginning of period | 121,659 | 54,158 | ||||||
| Cash at end of period | $ | 118,198 | $ | 47,298 | ||||
USF CORPORATION
Quarterly Operating Statistics
| LTL Segment | 2003 | 2004 | % Chg | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported Revenue and Fuel Surcharge | Q1 | Q2 | Q3 | Q4 | Q1 | Y vs Y | ||||||||||||||
| Work Days | 67.0 | 62.5 | 64.0 | 59.0 | 66.0 | |||||||||||||||
| Reported Revenue (000) | $ | 488,863 | $ | 472,517 | $ | 486,449 | $ | 450,884 | $ | 519,697 | 6 | .3% | ||||||||
| Fuel Surcharge (000) | 20,621 | 15,219 | 15,576 | 14,529 | 21,008 | 1 | .9% | |||||||||||||
| Revenue Excluding Fuel Surcharge (000) | 468,242 | 457,298 | 470,873 | 436,355 | 498,689 | 6 | .5% | |||||||||||||
Reported Revenue per Day (000) | 7,296 | 7,560 | 7,601 | 7,642 | 7,874 | 7 | .9% | |||||||||||||
| Fuel Surcharge per Day (000) | 308 | 244 | 243 | 246 | 318 | 3 | .4% | |||||||||||||
| Revenue Excluding Fuel Surcharge per Day (000) | 6,989 | 7,317 | 7,357 | 7,396 | 7,556 | 8 | .1% | |||||||||||||
| LTL Segment | 2003 | 2004 | % Chg | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating Statistics* | Q1 | Q2 | Q3 | Q4 | Q1 | Y vs Y | ||||||||||||||
| Work Days | 67.0 | 62.5 | 64.0 | 59.0 | 66.0 | |||||||||||||||
| LTL Shipments | ||||||||||||||||||||
| Billed Revenue (000) | $ | 466,633 | $ | 448,128 | $ | 461,740 | $ | 424,881 | $ | 489,855 | 5.0 | % | ||||||||
| Lbs (000) | 4,140,046 | 3,966,767 | 4,044,449 | 3,767,800 | 4,388,674 | 6.0 | % | |||||||||||||
| Shipments | 3,650,164 | 3,510,351 | 3,572,244 | 3,286,999 | 3,753,724 | 2.8 | % | |||||||||||||
Billed Revenue per Day (000) | $ | 6,965 | $ | 7,170 | $ | 7,215 | $ | 7,201 | $ | 7,422 | 6.6 | % | ||||||||
| Lbs per Day (000) | 61,792 | 63,468 | 63,195 | 63,861 | 66,495 | 7.6 | % | |||||||||||||
| Shipments per Day | 54,480 | 56,166 | 55,816 | 55,712 | 56,875 | 4.4 | % | |||||||||||||
Billed Revenue per Shipment | $ | 127.84 | $ | 127.66 | $ | 129.26 | $ | 129.26 | $ | 130.50 | 2.1 | % | ||||||||
| Lbs. Per Shipment | 1,134 | 1,130 | 1,132 | 1,146 | 1,169 | 3.1 | % | |||||||||||||
| Billed Revenue per CWT | $ | 11.27 | $ | 11.30 | $ | 11.42 | $ | 11.28 | $ | 11.16 | -1.0 | % | ||||||||
| Average Length of Haul | 488 | 492 | 492 | 494 | 497 | 1.8 | % | |||||||||||||
| TL Shipments | ||||||||||||||||||||
| Billed Revenue (000) | $ | 35,531 | $ | 34,488 | $ | 35,501 | $ | 34,843 | $ | 41,247 | 16.1 | % | ||||||||
| Lbs (000) | 836,475 | 803,289 | 820,651 | 806,696 | 960,887 | 14.9 | % | |||||||||||||
| Shipments | 56,293 | 53,511 | 54,589 | 53,240 | 64,262 | 14.2 | % | |||||||||||||
Billed Revenue per Day (000) | $ | 530 | $ | 552 | $ | 555 | $ | 591 | $ | 625 | 17.8 | % | ||||||||
| Lbs per Day (000) | 12,485 | 12,853 | 12,823 | 13,673 | 14,559 | 16.6 | % | |||||||||||||
| Shipments per Day | 840 | 856 | 853 | 902 | 974 | 15.9 | % | |||||||||||||
Billed Revenue per Shipment | $ | 631.18 | $ | 644.50 | $ | 650.33 | $ | 654.45 | $ | 641.86 | 1.7 | % | ||||||||
| Lbs. Per Shipment | $ | 14,859 | $ | 15,012 | $ | 15,033 | $ | 15,152 | $ | 14,953 | 0.6 | % | ||||||||
| Billed Revenue per CWT | $ | 4.25 | $ | 4.29 | $ | 4.33 | $ | 4.32 | $ | 4.29 | 1.1 | % | ||||||||
| Average Length of Haul | 413 | 428 | 430 | 433 | 440 | 6.5 | % | |||||||||||||
| LTL Segment - Total | ||||||||||||||||||||
| Billed Revenue (000) | $ | 502,164 | $ | 482,616 | $ | 497,241 | 459,724 | $ | 531,102 | 5.8 | % | |||||||||
| Lbs (000) | 4,976,621 | 4,770,056 | 4,865,100 | 4,574,496 | 5,349,561 | 7.5 | % | |||||||||||||
| Shipments | 3,706,457 | 3,563,862 | 3,626,833 | 3,340,239 | 3,817,986 | 3.0 | % | |||||||||||||
Billed Revenue per Day (000) | $ | 7,495 | $ | 7,722 | $ | 7,769 | $ | 7,792 | $ | 8,047 | 7.4 | % | ||||||||
| Lbs per Day (000) | 74,278 | 76,321 | 76,017 | 77,534 | 81,054 | 9.1 | % | |||||||||||||
| Shipments per Day | 55,320 | 57,022 | 56,669 | 56,614 | 57,848 | 4.6 | % | |||||||||||||
Billed Revenue per Shipment | $ | 135.48 | $ | 135.42 | $ | 137.10 | $ | 137.63 | $ | 139.11 | 2.7 | % | ||||||||
| Lbs. Per Shipment | $ | 1,343 | $ | 1,338 | $ | 1,341 | $ | 1,370 | $ | 1,401 | 4.4 | % | ||||||||
| Billed Revenue per CWT | $ | 10.09 | $ | 10.12 | $ | 10.22 | $ | 10.05 | $ | 9.93 | -1.6 | % | ||||||||
| Average Length of Haul | 487 | 491 | 491 | 493 | 493 | 1.2 | % | |||||||||||||
* These statistics are presented on an as-billed basis and not as presented in the financial statements. Differences between the operating statistics data and reported revenue in the financial statements result from, among other items, revenue recognition between accounting periods, adjustments for volume discounts that are not attributable to specific invoices and other adjustments to invoices that occur during later periods.