Exhibit 99.1
INVESTOR PRESENTATION MATERIALS, PART I, DATED DECEMBER 4, 2002
NASADAQ: TCAM WINTER 2002
[LOGO] TRANSPORT AMERICA
DRIVING TO EXCEED EXPECTIONS
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INVESTMENT OPPORTUNITY
o OPERATIONAL EXCELLENCE is gaining momentum
* Ongoing business process reviews have resulted in organization-wide cost
reduction and increased operational efficiency
* Implementation of technology has streamlined operations and reduced
administrative costs
o Average annual revenue per non-driver employee increased from
$549,000 at September 2001 to $587,000 at September 2002
o Impressive management team driving ORGANIZATIONAL EXCELLENCE
o Commitment to CONSISTENT PROFITABLE GROWTH
* Revenue per tractor per week increased 5.7% in 2002 ($2,531 in 2001 vs.
$2,675 in 2002)
* Q3 dead-head percentage decreased from 12.4% in 2001 to 11.3% in 2002
* New systems allow the company to evaluate specific customer and lane
profitability
o Commitment to DEBT REDUCTION
* Reduced debt from $146 million at March 2000 to $75.8 million at
September 2002
* Ten consecutive quarters of debt reduction
o Outstanding PERFORMANCE AWARDS from Best Buy, FedEx, S.C. Johnson and
United Sugars proves customer focus
MARKET DATA - NOVEMBER 15
RECENT PRICE $4.72
52-WEEK RANGE $4.45 - 7.39
SHARES OUTSTANDING 7.26M
MARKET CAPITALIZATION 34.8M
INSTITUTIONAL OWNERSHIP 4.43M
BOOK VALUE/SHARE $8.46
DEBT/TOTAL CAP. 1.3X
EBITDA/SHARE (TTM) @ 9/30/02 $4.74*
*PRIOR TO IMPARIMENT CHARGE
TRANSPORT CORPORATION OF AMERICA, INC. (TCAM) provides a wide range of truckload
carriage and logistics services in various lengths of haul in the United States
and parts of Canada.
The Company has designed its business to provide high-quality, customized
transportation and logistics services that allow it to be a preferred partner or
core carrier to major shippers.
TCAM serves as an integral part of the distribution system of many of its major
customers, including Hon Company, 3M Company, Toys-R-Us, Federal Express, Ford
Motor Company, General Mills, P.P.G. Industries, Ashley Furniture, S.C. Johnson
& Sons and United Sugars Corp.
TCAM's customers require time-definite pickup and delivery to support
just-in-time inventory management, specialized equipment, such as
temperature-controlled trailers, trailers designed to support decking,
multi-stop loading and unloading, and sophisticated electronic transaction
capabilities to automate the exchange of order, load, and billing data.
TRANSPORT AMERICA also provides logistics services by arranging transportation
for customers with other third-party transportation providers.
To support these complex customer requirements and deliver logistics services
cost-effectively, TCAM has developed a sophisticated information management
system which it believes makes it a technological leader in the industry.
NASADAQ: TCAM WINTER 2002
COMPANY OVERVIEW
Based in the Minneapolis - St. Paul metropolitan area, TRANSPORT CORPORATION OF
AMERICA, INC., provides a wide range of truckload freight carriage and logistics
services to customers in the United States and Canada. Operations commenced in
1984.
Transportation is typically a leading indicator and, therefore, may be one of
the first industries to benefit from a recovery. Also, as the business model in
this industry is highly scalable, incremental revenue does not necessarily lead
to a corresponding increase in fixed costs, which may have an immediate positive
impact on profitability. In the past two and a half years, the number of
carriers has been significantly reduced, tightening capacity and placing TCAM in
a position of strength.
TCAM focuses on providing time-definite and other responsive services through
its team of dedicated and committed employees supported by state-of-the-art
technology and information systems.
TCAM serves as an integral part of the distribution system of many of its major
customers, including:
o Hon Company
o 3M Company
o Toys-R-Us
o Federal Express
o Ford Motor Company
o General Mills
o P.P.G. Industries
o Polaris Industries
o S.C. Johnson & Sons
o United Sugars Corp.
o Eagle Global Logistics
o Dupont
o Ashley Furniture
o Arctic Cat
o Target Corporation
o Wal-Mart/Sam's Club
o Anderson Windows
o Golden Valley Foods
The principal categories of freight hauled are department-store merchandise,
grocery, industrial, consumer, paper products, and expedited services. During
2001, TCAM's largest 5, 10, and 25 customers accounted for approximately 40%,
59%, and 76%, respectively, of operating revenues.
The Company's largest customer, Sears, Roebuck & Co., which accounted for
approximately 12 percent of operating revenues in 2001, informed the Company it
would not renew contracts expiring in 2002. Management has estimated that the
effect in 2002 would be a loss of revenues approximating $16 million.
TCAM's management has done a good job of replacing this revenue, and third
quarter mileage was actually higher than a year ago. If Sears had been in the
third quarter of 2002, revenue would have increased approximately seven percent
compared with a year ago.
During the five-year period ended December 31, 2001, the Company increased its
revenues at a compounded annual growth rate of 10.8 percent.
[PIE CHART]
Transport America
Freight Hauled by Type
Dept. Store Mer. 8.6%
Paper 1.0%
Grocery 30.6%
Industrial 13.8%
Express 9.8%
Cont. and Pack. 0.0%
Office & Home 12.5%
Auto 6.9%
Building 4.0%
3rd Party Log. 7.5%
Rec Veh. 4.1%
Misc. 1.4%
-----------
100.00%
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NASADAQ: TCAM WINTER 2002
THREE STRATEGIC PRIORITIES -- PROFITABLE GROWTH
TCAM's previous operational strategy had been "get the customer no matter where
the lane is." In a dramatic change, current priorities focus on building lane
density, which will afford the Company margin expansion opportunities. Software
is now heavily relied upon to dissect customers and lanes for operating
efficiency and to develop programs to drive accountability to the field
personnel, providing management with real-time analytical tools to better manage
the business.
TCAM's Profitable Growth Strategy took an early hit with the announcement of the
Sears loss, which accounted for approximately 12 percent of operating revenues
in 2001. Despite that loss, however, the Company has been able to hold revenues
equal to a year ago through the first nine months of 2002. On a comparative
basis, in the third quarter just completed, revenues would have been seven
percent higher than 2001 had Sears remained in the portfolio.
Moreover, the current mix of business is better aligned with TCAM's focus to
improve the density and balance of its primary lanes of traffic. No longer
pursuing business for the sake of revenue alone, new and existing business must
meet network standards for headhaul or backhaul synergies.
Integral to this change in revenue growth strategy is a technology called
STRATEGIC PROFITABILITY ASSESSMENT, commonly referred to as the acronym SPA. It
provides the Company with the capability to assess customer profitability by
lane. Helping TCAM to better manage regional density and rates, the technology
has also permitted the Company to decentralize accountability for customer
profitability to its regional sales personnel, who are working towards achieving
specific operating ratio targets for new and existing customers.
In order to maintain current customers and its reputation for outstanding
customer service in the industry, Transport America's Chairman, President and
CEO, Michael Paxton, has visited
35 of the company's top 50 customers. TCAM's service levels have continued to
improve and now stand at 98 - 99% on-time performance for its total customer
base.
This performance record is supported by five prestigious awards received by the
company in the last six months:
o BEST BUY QUALITY PARTNERSHIP AWARD for 2002. This was the first time that
this award was given to a carrier that has been in the Best Buy portfolio
for less than a year
o FEDEX CARRIER OF THE YEAR and OUTSTANDING PERFORMANCE for maintaining above
99% service goal
o S.C. JOHNSON SOUTHEAST CARRIER OF THE YEAR for 2001
o UNITED SUGAR CARRIER OF THE YEAR for 2001-2002
TCAM was built on superior customer service, and this will continue to be a
cornerstone of the company's success.
[LINE GRAPH]
Transport America
Empty Miles %
2002 2001
---- ----
January 13.20% 13.40%
February 12.40% 12.50%
March 12.50% 12.10%
April 12.20% 12.60%
May 11.90% 12.90%
June 11.30% 12.30%
July 11.80% 13.00%
August 11.20% 12.30%
September 10.80% 12.10%
DRIVING TO EXCEED EXPECTATIONS 3 TRANSPORT CORP OF AMERICA
NASADAQ: TCAM WINTER 2002
THREE STRATEGIC PRIORITIES -- OPERATIONAL EXCELLENCE
Internal organizational processes and fleet productivity are the focus of
TRANSPORT AMERICA'S Operational Excellence initiative. Whether it is driving
efficiency to the cab, or in the back office, management is taking a very
focused approach to introduce technology throughout the organization.
Business Process Reengineering Teams have concentrated on order cycle, from
inception of a tendered load to driver settlement; implementation of new
business; rate communications; and customer complaint resolution, making changes
in each area as warranted.
Additionally, the company initiated a pilot study in its Operations group to
focus on driver ownership and better teamwork among customer service
representatives, planners and fleet managers. Plans are underway to capture the
benefits of the project for the entire organization.
On an external basis, TCAM has been focusing on better network balance, leading
to lower deadhead miles and better utilization of assets. And those efforts are
beginning to pay off:
o Total miles for the first nine months of 2002 increased four percent over
2001
o Average length of haul increased nearly five percent
o Deadhead decreased by 70 basis points
o During the month of September 2002, deadhead was 130 basis points below
2001
Moreover, the Company's maintenance facilities are being turned into profit
centers by offering maintenance programs to its independent contractor fleet.
TCAM is also evaluating its overall Service Center structure to insure that it
fully supports the future density and network balance requirements of its
system.
TCAM reopened its driver training school in April 2002 and is beginning to see
net gains in new drivers to the fleet. Through an accelerated advertising
campaign and an incentive program with its current drivers to recruit for
TRANSPORT AMERICA, management believes driver availability will ease in the
fourth quarter of 2002.
The final area of focus in its Operational Excellence strategy is TCAM's
investment in Information Technology. With over 40 projects on its "to do" list,
management streamlined priorities to fifteen projects based on an ROI hurdle
rate. Over half of these projects are now completed.
One example is the Company's Imaging Project for Driver Trip Documents. This
investment in Information Technology not only reduced errors through less
handling of paperwork, but has reduced overhead costs and improved cash flows.
Additionally, TCAM has implemented a Fuel and Routing Program integrated with
Transcom (the company's new Oracle-based transportation management platform) to
reduce out-of-route miles and improve fuel costs. Preliminary results have been
encouraging.
Finally, the company is implementing a Driver and Load Optimizer program for its
operations group, with estimated benefits in both reduced deadhead and better
fleet utilization. As each project is completed, it is replaced with another
opportunity for the organization.
TCAM's business model is very sensitive to operating expense levels, and even
modest savings can drive home meaningful dollars. Through programs like these,
TCAM has been able to reduce headcount by about 15 percent in the last two
years.
[BAR CHART]
Transport America
Revenue per tractor / week
2002 2001
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Q1 $2,594 $2,492
Q2 $2,689 $2,529
Q3 $2,746 $2,690
REVENUE PER TRACTOR/WEEK
DRIVING TO EXCEED EXPECTATIONS 4 TRANSPORT CORP OF AMERICA
NASADAQ: TCAM WINTER 2002
THREE STRATEGIC PRIORITIES -- ORGANIZATIONAL EXCELLENCE
TCAM's management has moved aggressively on its third strategic priority -
Organizational Excellence. The addition of Rick Lane in May to Vice President
Sales - National Accounts was a key step in the creation of a powerful
management team. A 20-plus year veteran of the industry, Mr. Lane has moved
quickly to build relationships with existing customers, add new business, mentor
the sales organization, and team with operations to improve lane balance.
The final phase of TCAM's reorganization was just completed in November of 2002.
Ron Kipp, a 25-year veteran of Schneider Transportation, has joined Transport
America as Vice President of Operations. Mr. Kipp holds an MBA from the
University of Chicago and will oversee Transport America's entire customer
service and operational management activities.
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COMPANY MANAGEMENT
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MICHAEL J. PAXTON, President and Chief Executive Officer of Transport America
since November 2001; President and Chief Executive Officer of Sunbeam Health and
Safety Company (a manufacturer of home safety and health products and a
subsidiary of Sunbeam Corporation) from September 1998 to November 2001;
Chairman, President and Chief Executive Officer of O-Cedar Brands, Inc. from
January 1996 to September 1998; President and Chief Executive Officer of
Haagen-Dazs Company, Inc. from 1992 through 1995; President of the Baked Goods
Division of Pillsbury Company from 1989 to 1992.
KEITH R. KLEIN, Chief Financial Officer of Transport America since July 1999,
and Chief Information Officer since March 2001. From 1997 to July 1999, Mr.
Klein was founder and owner of a financial consulting firm. From 1990 to 1997,
he served in various positions at Deluxe Corporation, most recently as Vice
President and Corporate Controller. From 1985 to 1990, Mr. Klein was employed in
the audit division of Deloitte & Touche. Mr. Klein has an MBA (Executive
Program) from the University of Minnesota.
RICHARD R. LANE, Vice President Sales - National Accounts, joined Transport
America in May 2002. Mr. Lane has held a variety of operations and sales
management positions with several regional and long haul carriers. He was the
Managing General Partner of Transport Resource and Compliance, a transportation
consulting and brokerage firm. Prior to joining TCAM, Mr. Lane served in a
variety of sales management positions with Covenant Transport, the last being as
Vice President Sales - National Accounts.
RONALD C. KIPP, Vice President - Operations, joined Transport America in October
2002. Mr. Kipp spent 24 years in various positions with Schneider National, Inc.
including Vice President of Operations and Vice President of Sales for Schneider
Specialized Carriers, Inc. Mr. Kipp served in the U.S Air Force from 1968 to
1978, and holds a Masters of Business Administration from the University of
Chicago.
DRIVING TO EXCEED EXPECTATIONS 5 TRANSPORT CORP OF AMERICA
NASADAQ: TCAM WINTER 2002
INCOME STATEMENT
Transport Corporation of America, Inc.
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2002 2001 2002 2001
----------- ----------- ----------- -----------
Operating revenues $ 69,002 $ 70,333 $ 204,054 $ 205,835
Operating expenses:
Salaries, wages, and benefits 19,574 21,462 60,232 61,085
Fuel, maintenance, and other expenses 9,639 10,707 28,749 30,694
Purchased transportation 24,310 21,636 67,987 66,167
Revenue equipment leases 251 37 582 69
Depreciation and amortization 6,760 7,448 20,870 22,522
Insurance, claims and damage 2,527 2,117 8,622 6,706
Taxes and licenses 1,188 1,411 3,774 3,912
Communications 634 703 2,013 2,047
Other general and administrative expenses 2,294 2,139 6,567 6,761
Impairment of revenue equipment 0 0 4,741 0
(Gain) loss on sale of property and equipment (14) 65 (22) 124
Total operating expenses 67,163 67,725 204,115 200,087
Operating income (loss) 1,839 2,608 (61) 5,748
Interest expense 1,356 1,811 4,283 5,573
Interest income (50) (19) (55) (26)
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Interest expense, net 1,306 1,792 4,228 5,547
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Earnings (loss) before income taxes and cumulative
effect of change in accounting principle 533 816 (4,289) 201
Provision (benefit) for income taxes 279 338 (1,928) 99
----------- ----------- ----------- -----------
Earnings (loss) before cumulative effect
of change in accounting principle 254 478 (2,361) 102
Cumulative effect of change in
accounting principle, net of tax effect 0 0 (16,694) 0
----------- ----------- ----------- -----------
Net earnings (loss) 254 478 (19,055) 102
=========== =========== =========== ===========
Net earnings (loss) per share - basic:
Before cumulative effect of change
in accounting principle $ 0.04 $ 0.07 $ (0.33) $ 0.01
Cumulative effect of change in
accounting principle, net of tax effect -- -- (2.30) --
----------- ----------- ----------- -----------
Net earnings (loss) per share $ 0.04 $ 0.07 $ (2.63) $ 0.01
=========== =========== =========== ===========
Net earnings (loss) per share - diluted
Before cumulative effect of change
in accounting principle $ 0.03 $ 0.07 $ (0.33) $ 0.01
Cumulative effect of change in
accounting principle, net of tax effect -- -- (2.30) --
----------- ----------- ----------- -----------
Net earnings (loss) per share $ 0.03 $ 0.07 $ (2.63) $ 0.01
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Average common shares outstanding:
Basic 7,256,152 7,202,184 7,244,934 7,194,569
Diluted 7,285,709 7,218,022 7,244,934 7,203,809
DRIVING TO EXCEED EXPECTATIONS 6 TRANSPORT CORP OF AMERICA
NASADAQ: TCAM WINTER 2002
BALANCE SHEET
Transport Corporation of America, Inc.
Consolidated Balance Sheets
(In thousands)
September 30, December 31,
ASSETS 2002 2001
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(Unaudited)
Current assets:
Cash and cash equivalents $ 578 $ 1,107
Trade accounts receivable, net 30,333 26,864
Other receivables 2,822 1,590
Operating supplies - inventory 1,117 1,196
Deferred income tax benefit 4,057 3,474
Prepaid expenses 2,805 1,801
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Total current assets 41,712 36,032
Property and equipment:
Land, buildings, and improvements 17,624 17,860
Revenue equipment 204,163 227,149
Other equipment 24,100 24,162
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Total property and equipment 245,887 269,171
Less accumulated depreciation (101,512) (100,203)
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Property and equipment, net 144,375 168,968
Other assets
Other assets, net 2,736 2,030
Goodwill, net 0 24,366
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Total other assets, net 2,736 26,396
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Total assets $ 188,823 $ 231,396
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 15,989 $ 14,111
Current maturities of capital lease obligations 5,821 4,244
Accounts payable 5,821 5,873
Checks issued in excess of cash balances 794 1,118
Due to independent contractors 2,433 1,496
Accrued accident and claim liability 6,286 5,288
Accrued expenses 9,377 9,207
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Total current liabilities 46,521 41,337
Long-term debt, less current maturities 35,749 51,077
Capital lease obligations, less current maturities 18,267 23,019
Deferred income taxes 26,597 35,516
Shareholders' equity:
Common stock 72 72
Additional paid-in capital 30,502 30,205
Retained earnings 31,115 50,170
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Total shareholders' equity 61,689 80,447
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Total liabilities and shareholders' equity $ 188,823 $ 231,396
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DRIVING TO EXCEED EXPECTATIONS 7 TRANSPORT CORP OF AMERICA
NASADAQ: TCAM WINTER 2002
[LOGO] TRANSPORT AMERICA
DRIVING TO EXCEED EXPECTATIONS
CONTACT INFORMATION
KEITH KLEIN
Transport America
Chief Financial Officer
651.686.2558
SAFE HARBOR
STATEMENTS INCLUDED IN THIS PROFILE, ELSEWHERE IN FUTURE FILINGS BY THE COMPANY
WITH THE SEC, IN THE COMPANY'S PRESS RELEASES, AND IN ORAL STATEMENTS MADE WITH
THE APPROVAL OF AN AUTHORIZED EXECUTIVE OFFICER WHICH ARE NOT HISTORICAL OR
CURRENT FACTS, ARE FORWARD-LOOKING STATEMENTS MADE PURSUANT TO SAFE HARBOR
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM HISTORICAL RESULTS AND
THOSE PRESENTLY ANTICIPATED OR PROJECTED. THE COMPANY WISHES TO CAUTION READERS
NOT TO PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY
AS OF THE DATE MADE. THE FOLLOWING IMPORTANT FACTORS, AMONG OTHER THINGS, IN
SOME CASES HAVE AFFECTED AND IN THE FUTURE COULD AFFECT THE COMPANY'S ACTUAL
RESULTS AND COULD CAUSE THE COMPANY'S ACTUAL FINANCIAL PERFORMANCE TO DIFFER
MATERIALLY FROM THAT EXPRESSED IN ANY FORWARD-LOOKING STATEMENT: (1) THE HIGHLY
COMPETITIVE CONDITIONS THAT CURRENTLY EXIST IN THE COMPANY'S MARKET AND THE
COMPANY'S ABILITY TO COMPETE, (2) THE COMPANY'S ABILITY TO RECRUIT, TRAIN, AND
RETAIN QUALIFIED DRIVERS, (3) INCREASES IN FUEL PRICES, AND THE COMPANY'S
ABILITY TO RECOVER THESE COSTS FROM ITS CUSTOMERS, (4) CHANGES IN GOVERNMENTAL
REGULATIONS APPLICABLE TO THE COMPANY'S OPERATIONS, (5) ADVERSE WEATHER
CONDITIONS, (6) ACCIDENTS, (7) THE MARKET FOR USED REVENUE EQUIPMENT, (8)
CHANGES IN INTEREST RATES, (9) COST OF LIABILITY INSURANCE COVERAGE, AND (10)
DOWNTURNS IN GENERAL ECONOMIC CONDITIONS AFFECTING THE COMPANY AND ITS
CUSTOMERS. THE FOREGOING LIST SHOULD NOT BE CONSTRUED AS EXHAUSTIVE, AND THE
COMPANY DISCLAIMS ANY OBLIGATION SUBSEQUENTLY TO REVISE OR UPDATE ANY PREVIOUSLY
MADE FORWARD-LOOKING STATEMENTS. UNANTICIPATED EVENTS ARE LIKELY TO OCCUR.