SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: October 30, 2003
(Date of earliest event reported)
USF CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-19791 36-3790696
(State or other jurisdiction of
incorporation or organization) (Commission File No.) (IRS Employer
Identification Number)
8550 West Bryn Mawr Avenue, Suite 700, Chicago, Illinois 60631
(Address of principal executive offices) (Zip Code)
(773) 824-1000
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following is furnished under Item 12 of Form 8-K as an exhibit to this
Current Report.
(c) Exhibits:
Exhibit Description
Number
99 News Release, dated October 30, 2003.
Exhibits (furnished pursuant to Item 12)
Item 12. Disclosure of Results of Operations and Financial Condition
On October 30, 2003, USF Corporation ("the Company") reported its results
for the Third Quarter of 2003 ending October 4, 2003. The Company issued a press
release, the text of which is set forth in Exhibit 99 hereto. This information
is being furnished pursuant to Item 12 "Disclosure of Results of Operations and
Financial Condition". This information shall not be deemed "filed" for purposes
of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or
otherwise subject to the liabilities of that section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933 or the
Exchange Act, except as expressly set forth by specific reference in such a
filing.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this Current Report to be signed on its behalf by
the undersigned hereunto duly authorized.
USF CORPORATION
By:/s/ Christopher L. Ellis
------------------------
Christopher L. Ellis
Senior Vice President, Finance
& Chief Financial Officer
Date:October 30, 2003
EXHIBIT 99
FOR IMMEDIATE RELEASE
USF CORPORATION REPORTS INCOME FROM CONTINUING OPERATIONS OF $.48 PER SHARE
(CHICAGO - October 30, 2003) USF Corporation, (www.usfc.com) reported
income from continuing operations of $13.1 million for the third quarter ended
October 4, 2003, compared to $13.4 million reported for the third quarter ended
September 28, 2002. Diluted earnings per share from continuing operations were
48 cents compared to 49 cents in last year's third quarter. Net income for the
third quarter was $13.0 million or 47 cents diluted earnings per share, compared
to $5.3 million for the third quarter of 2002, equivalent to 19 cents per share.
Included in the third quarter 2002 net income was an $8.1 million charge related
to discontinued operations.
Revenue for the third quarter was $584.7 million, a 1.1% increase from the
$578.5 million reported for the third quarter of 2002. There were 64 working
days in the third quarter of 2003 compared to 63 working days in the third
quarter of 2002. Revenue per working day decreased 0.5% from last year's
quarter.
Richard P. DiStasio, President and Chief Executive Officer of USF
Corporation commented, "While our earnings were about the same as the third
quarter of last year, the level of growth in revenue and operating profit was
less than satisfactory. USF Holland, our largest regional carrier, continues to
be affected by the relatively slow economy in the Midwest. On a positive note,
during the quarter USF Red Star continued its move towards profitability by
significantly reducing its losses compared to earlier quarters this year, and
USF Reddaway once again had one of the best operating ratios ("OR") in the LTL
industry."
Less-Than-Truckload
Income from operations for the LTL group was $30.3 million in the quarter,
compared to $30.6 million for the third quarter of 2002. The LTL group's OR in
the third quarter was 93.8%, compared to 93.7% in the third quarter of last
year. Third quarter revenue in the LTL group was $486.4 million, a 0.6% increase
from last year's third quarter. Per working day revenue (including fuel
surcharge) decreased 0.9% from last year. Excluding the fuel surcharge, revenue
per working day decreased 2.0%.
A major element of the virtually unchanged revenue for the quarter compared
to last year's third quarter was the planned reduction in revenue at USF Red
Star following the strategic decisions to exit business with a large customer
and close terminals in the Carolinas and Atlanta. These revenue reductions were
offset, in part, by revenue generated from the acquisition of the business of
Plymouth Rock, a small Northeastern regional LTL carrier. As a result, USF Red
Star's yield improved compared to last year with LTL billed revenue per shipment
increasing 9.5%. USF Red Star's third quarter revenue was $57.7 million compared
to last year's $68.9 million, a 16.2% decrease. Excluding USF Red Star, the
remaining companies in the LTL group posted a 3.5% increase in revenue.
"We are pleased with the turnaround efforts underway at USF Red Star", said
DiStasio. "We believe the measures we have taken will allow the company to
return to profitability during the fourth quarter."
USF Holland's daily revenue decreased by 0.2% from last year's third
quarter, with an OR of 93.3% compared to 92.3% last year. USF Holland continues
to feel the effects of the soft economy it is experiencing along with pricing
pressures. Intense efforts are underway to fine tune pricing strategies to
ensure that USF Holland increases their growth rate and improves market
penetration.
USF Reddaway reported improved third quarter results, growing daily revenue
by 6.6% over last year's quarter with an OR in the current quarter of 86.8%, the
same as last year. USF Dugan also improved revenue and income from operations,
with daily revenue increasing 4.4% over last year's quarter and an OR of 97.3%,
compared to 99.2% in the third quarter of 2002. USF Bestway grew daily revenue
by 1.9%, but its OR increased slightly to 93.1% in this quarter compared to
92.9% in last year's third quarter.
LTL revenue generated by the Company's USF PremierPlusSM service grew 10.4%
in the third quarter of 2003 compared to the third quarter of 2002. It now
represents 12.8% of total LTL revenue compared to 11.8% in the third quarter of
2002.
Billed LTL shipments decreased 3.1% and tonnage decreased 2.7% from last
year's third quarter. On a per day basis, billed shipments decreased 4.6% and
tonnage decreased 4.3%. Billed LTL revenue per shipment increased 4.8% from
$123.33 to $129.26, including fuel surcharges. Billed LTL revenue per
hundredweight increased by 4.4%, from $10.93 to $11.42. Average weight per LTL
shipment increased by 0.4%, from 1,128 pounds to 1,132 pounds.
Truckload
USF Glen Moore recorded a 13.6% revenue increase to $33.7 million in the
current quarter from last year's $29.6 million. USF Glen Moore's income from
operations was $1.8 million compared to $1.6 million last year and it had an OR
of 94.7% in both years' third quarter.
Logistics
Revenue for the logistics group was $67.7 million, the same as last year's
third quarter. The group reported income from operations of $2.9 million, the
same as last year. Underlying the flat revenue was a significant decrease in
contract fleet revenue with the loss of business from Fleming Companies
following their bankruptcy in the second quarter of this year. Offsetting this
was higher business levels in other areas of logistics, especially the domestic
drayage and container shipping area.
Capital Expenditures and Balance Sheet
Capital expenditures for the quarter were approximately $29 million: $6
million for revenue equipment, $11 million for terminal facilities, $8 million
for Information Technology and $4 million in other areas. Last year's third
quarter capital expenditures were $36 million: $25 million for revenue
equipment, $6 million for terminals, $1 million for Information Technology, and
$4 million in other areas.
Leadership Transition
Neil Springer was elected Non-Executive Chairman of the Board of Directors
on September 2nd. Richard P. DiStasio became President & Chief Executive Officer
on September 15th.
DiStasio announced, "Pete Neydon, President and CEO of USF Holland, has
informed us that after 20 years of service, the last seven as president, he
intends to retire. Effective November 10, 2003, Steve Caddy, currently President
of USF Red Star, will assume the position of president at USF Holland. In
Steve's short tenure at USF Red Star, he has been responsible for moving the
company from a significant operating loss to a position approaching
profitability."
Said DiStasio, "I have been impressed with Steve's focus and operating
discipline and I look forward to working with him and the management team at USF
Holland to take the company to the next level."
With Caddy's appointment to USF Holland, Bruce Kennedy, currently Vice
President of Sales and Pricing for USF Red Star will be appointed Chief
Operating Officer. Bruce's role will be to continue and accelerate the progress
made to date on the USF Red Star profit improvement initiatives.
Other Quarter Highlights
* Stephen W. Lilienthal named a Director of the Company
* Company unveiled USF MexicoSM service
* Company announced USF Guaranteed 4 Free service
* USF Holland, USF Reddaway and USF Logistics named Quest for Quality
Award winners
* USF Bestway enhanced its California service with new terminals in
Orange County and the San Fernando Valley
Operating Statistics
Copies of the Company's Operating Statistics are available on the USF home
page at www.usfc.com under the heading, "Recent Headlines". After a period of
time, these will be archived at www.ir.usfc.com.
Conference Call
A conference call will be held at 10:00 am CST on Friday, October 31st 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
1-888-519-4471, PIN number 4224924 after 1:00 pm CST. The telephone replay will
be available for seven days. After that time a transcript of the call will be
available at www.ir.usfc.com.
A live broadcast of the conference call will be available through the
Company's Web site at www.usfc.com and also www.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.
About USF Corporation
USF Corporation (NASDAQ: USFC) provides a full range of supply chain
management services, offering high- value transportation solutions across North
America through a network of independently operated companies that compete
collectively. USF's five regional trucking companies--USF Bestway, USF Dugan,
USF Holland, USF Red Star, and USF Reddaway--provide industry-leading next-day,
regional (USF PremierSM) and national (USF PremierPlusSM) less-than-truckload
services. USF Glen Moore is one of the fastest growing providers of premium
regional and national truckload services. USF Logistics Services is a
full-service provider of transportation management, contract warehousing,
dedicated fleet, transportation broker, cross docking, domestic ocean services
and reverse logistics. Transportation and logistics services in Mexico and
across the United States/Mexico border (USF MexicoSM) are offered by all USF
companies. USF Technology Services is a provider of information integration and
support services to USF and its customers, including USF Net web-based services.
For more information, visit www.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
Christopher Ellis 773-824-2205
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited (Dollars in thousands except per share amount)
Quarter Ended Year to Date
October 4, September 28, October 4, September 28,
2003 2002 2003 2002
Revenue:
LTL Trucking $ 486,449 $ 483,318 $1,447,784 $1,388,709
TL Trucking 33,669 29,649 96,663 83,484
Logistics 67,734 67,707 209,147 203,852
Intercompany eliminations (3,147) (2,189) (8,102) (6,208)
Total revenue from operations 584,705 578,485 1,745,492 1,669,837
Income:
LTL Trucking 30,313 30,589 72,425 75,967
TL Trucking 1,776 1,574 3,261 3,992
Logistics 2,927 2,884 5,265 7,250
Freight forwarding - Asia exit costs - - - (12,760)(a)
Corporate and other (6,630) (7,262) (20,548) (20,395)
Total income from operations 28,386 27,785 60,403 54,054
Non-operating income/(expenses):
Interest expense (5,175) (5,110) (15,658) (15,340)
Interest income 221 373 639 1,771
Other, net (506) (419) (932) (800)
Net non-operating expenses (5,460) (5,156) (15,951) (14,369)
Income from continuing operations before income
taxes and cumulative effects of accounting changes 22,926 22,629 44,452 39,685
Income tax expense (9,835) (9,183) (19,007) (20,059)
Income from continuing operations before cumulative
effects of accounting changes 13,091 13,446 25,445 19,626
Loss from discontinued operations, net of tax benefits of
$96, $1,928, $130 and $6,373 respectively (130) (8,127) (175) (16,030)
Income before cumulative effects of 12,961 5,319 25,270 3,596
accounting changes
Cumulative effect of change in accounting - - (1,467) -
for revenue recognition, net of tax benefit of $1,064
Cumulative effect of change in accounting - - - (70,022)
for goodwill
Net income/(loss) $12,961 $ 5,319 $ 23,803 $ (66,426)
Income per share from
continuing operations - Basic $ 0.48 $ 0.50 $ 0.94 $ 0.73
- Diluted 0.48 0.49 0.93 0.72
Loss per share from
discontinued operations - Basic (0.01) (0.30) (0.01) (0.60)
- Diluted (0.01) (0.30) (0.01) (0.59)
Loss per share - cumulative effects of changes
in accounting - Basic - - (0.05) (2.60)
- Diluted - - (0.05) (2.56)
Net income/(loss) per share - Basic 0.47 0.20 0.88 (2.47)
- Diluted 0.47 0.19 0.87 (2.43)
Average shares outstanding - Basic 27,300,493 26,924,123 27,135,187 26,872,059
- Diluted 27,444,809 27,338,300 27,260,348 27,344,357
(a) Charges related to relinquishing our interest in Asia.
REVENUE and OPERATING RATIOS
Unaudited (Dollars in thousands)
Quarter Ended Year to Date
October 4, 2003 and October 4, 2003 and
September 28, 2002 September 28, 2002
Operating Operating
Company (Region) Revenue Ratio (a) Revenue Ratio (a)
Holland (Midwest) 03 $249,225 93.3% $751,575 93.6%
02 $245,765 92.3% $715,165 92.8%
Bestway (Southwest) 03 40,986 93.1% 119,030 95.1%
02 39,600 92.9% 111,682 94.1%
Red Star (Northeast) 03 57,693 101.8% 175,890 104.8%
02 68,877 101.5% 198,608 102.4%
Reddaway (West Coast, Northwest) 03 78,075 86.8% 223,250 88.9%
02 72,065 86.8% 202,648 89.9%
Dugan (Plains, South) 03 60,470 97.3% 178,039 98.8%
02 57,011 99.2% 160,606 98.8%
(a) Operating ratio is direct operating expenses as a percentage of revenue.