TRANSPORT CORPORATION OF AMERICA, INC.
1715 YANKEE DOODLE ROAD
EAGAN, MN 55121
Traded: Nasdaq: TCAM
COMPANY CONTACTS:
Michael Paxton Keith Klein
Chairman, President and CEO Chief Financial Officer
(651) 686-2500 (651) 686-2500
FOR IMMEDIATE RELEASE
THURSDAY, JULY 17, 2003
TRANSPORT CORPORATION OF AMERICA
REPORTS SECOND QUARTER RESULTS
MINNEAPOLIS, MINNESOTA, JULY 17, 2003 - TRANSPORT CORPORATION OF AMERICA, INC.
(NASDAQ: TCAM), today announced revenues for the second quarter 2003 of $65.6
million, compared with 2002 second-quarter revenues of $69.0 million, a decrease
of 4.9 percent. Second quarter's net loss was $837,000 or $0.12 per diluted
share, compared with 2002 second quarter net income of $208,000, or $0.03 per
diluted share.
Michael Paxton, Chairman, President and Chief Executive Officer, commented, "We
are clearly disappointed with our second quarter results. A soft freight
environment during much of the second quarter, especially in a number of our key
geographical markets, significantly reduced available miles. Despite these
challenges, we continued our efforts to drive productivity and network balance,
reducing our deadhead miles from 11.8 percent in 2002 to 10.6 percent in 2003.
Our administrative productivity improved, with our revenue per non-driver
employee increasing by 7.4 percent in the second quarter over the previous year.
In addition, our revenue per loaded mile improved for the second consecutive
quarter as a result of rate increases and improvement in freight mix."
"The soft freight environment negatively impacted our utilization during the
quarter," Paxton continued, "reducing miles per tractor by 1.9 percent and
revenue per tractor by 1.4 percent over 2002 levels. In addition, we experienced
increased insurance and claims costs in the quarter relating to claims
settlements. Our accident frequency rate remains at historically low levels, and
we continue to implement programs to improve safety and reduce claims expense."
"We also maintained our focus on improving the balance sheet," Paxton noted.
"For the thirteenth straight quarter, Transport America has reduced its overall
debt position. During the second quarter of 2003, we paid down $6.7 million of
debt, bringing our total outstanding debt balance to $60.0 million."
YEAR-TO-DATE RESULTS
For the six-month period ended June 30, 2003, Transport America announced
revenues of $132.7 million, compared with 2002 year-to-date revenues of $135.1
million. Net loss for the six-month period was $1.4 million, or $0.19 per
diluted share, compared with a 2002 net loss of $19.3 million, or $2.67 per
diluted share.
Results in 2003 include a non-cash benefit of $167,000 after taxes, or $0.02 per
share, for a change in estimate related to the impairment of revenue equipment
recorded in 2002 and non-cash charge of $64,000 after taxes, or $0.01 per share,
for a change in accounting principle relating to environmental disposal costs on
tires. Results in 2002 include a non-cash asset impairment charge of $2.5
million after taxes, or $0.35 per share, for asset
impairment charges related to plans to dispose of approximately 260 tractors
without guaranteed residual values and 500 trailers in excess of the Company's
needs. Results in 2002 also include a non-cash goodwill impairment charge of
$16.7 million after taxes, or $2.31 per share.
OUTLOOK
Looking ahead, Paxton commented, "While the first half of 2003 has seen soft
demand for freight, we are cautiously optimistic that we will see increased
demand during the second half of 2003. In addition, we are aggressively pursuing
new freight opportunities. During the second quarter, we were awarded over $8
million in annualized new business from one customer that we expect will ramp up
early in the third quarter. We also believe we will be able to maintain some of
the early success we have experienced in achieving rate increases. In addition,
we recently initiated a new cost reduction program we expect will allow us to
identify and achieve significant cost savings as we go through the second half
of 2003."
The Company will host a conference call and webcast today, July 17, 2003 at
10:00 a.m. Central Time. The Internet broadcast can be accessed at the Company's
website, www.transportamerica.com, or at www.companyboardroom.com.
ABOUT TRANSPORT AMERICA
Transport Corporation of America, Inc., based in the Minneapolis - St. Paul
metropolitan area, provides a wide range of truckload freight carriage and
logistics services to customers in the United States and Canada. Transport
America 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.
This news release contains forward-looking statements regarding the Company. 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) the impact of environmental standards and regulations on new
revenue equipment, (5)changes in governmental regulations applicable to the
Company's operations, (6) adverse weather conditions, (7) accidents, (8) the
financing and resale market for used revenue equipment, (9) changes in interest
rates, (10) cost of liability insurance coverage, and (11) 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.
TRANSPORT CORPORATION OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Six Months ended June 30, 2003 and 2002
(In thousands, except share and per share amounts)
THREE MONTHS
(UNAUDITED)
-------------------------------------------
2003 2002
-------------------- ---------------------
AMOUNT % AMOUNT %
-------------------- ---------------------
Operating revenues $ 65,638 100.0 $ 69,004 100.0
OPERATING EXPENSES:
Salaries, wages, and benefits 18,281 27.9 20,161 29.2
Fuel, maintenance, and other expense 9,650 14.7 9,779 14.2
Purchased transportation 23,771 36.2 23,110 33.5
Revenue equipment leases 263 0.4 268 0.4
Depreciation and amortization 6,287 9.6 6,933 10.1
Insurance, claims, and damage 3,478 5.3 2,768 4.0
Taxes and licenses 1,111 1.7 1,205 1.7
Communication 559 0.9 684 1.0
Other general and administrative expenses 2,590 3.9 2,289 3.3
Impairment of revenue equipment 0 0.0 0 0.0
Gain (Loss) on disposition of equipment (3) 0.0 (9) 0.0
-------------------- -------------------
Total operating expenses 65,987 100.5 67,188 97.4
-------------------- -------------------
OPERATING INCOME (LOSS) (349) (0.5) 1,816 2.6
Interest expense, net 1,045 1.6 1,431 2.0
-------------------- -------------------
EARNINGS (LOSS) BEFORE INCOME TAXES (1,394) (2.1) 385 0.6
Income tax provision (benefit) (557) (0.8) 177 0.3
-------------------- -------------------
EARNINGS (LOSS) BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE (837) (1.3) 208 0.3
Cumulative effect of change in accounting
principle, net of tax effect 0 0.0 0 0.0
-------------------- -------------------
NET EARNINGS (LOSS) $ (837) (1.3) $ 208 0.3
==================== ===================
EARNINGS (LOSS) PER COMMON SHARE - BASIC
Before cumulative effect of change
in accounting principles $ (0.12) $ 0.03
Net earnings (loss) per share $ (0.12) $ 0.03
Earnings (loss) per common share - diluted
Before cumulative effect of change
in accounting principles $ (0.12) $ 0.03
Net earnings (loss) per share $ (0.12) $ 0.03
Average common shares outstanding
Basic 7,185,776 7,251,013
Diluted 7,185,776 7,315,138
[WIDE TABLE CONTINUED FROM ABOVE]
SIX MONTHS
(UNAUDITED)
------------------------------------------------
2003 2002
------------------------ ----------------------
AMOUNT % AMOUNT %
------------------------ ----------------------
Operating revenues $ 132,739 100.0 $ 135,052 100.0
OPERATING EXPENSES:
Salaries, wages, and benefits 36,946 27.8 40,658 30.2
Fuel, maintenance, and other expense 20,533 15.5 19,110 14.2
Purchased transportation 47,538 35.8 43,677 32.3
Revenue equipment leases 523 0.4 331 0.2
Depreciation and amortization 12,625 9.5 14,110 10.4
Insurance, claims, and damage 6,397 4.8 6,095 4.5
Taxes and licenses 2,315 1.7 2,586 1.9
Communication 1,096 0.8 1,379 1.0
Other general and administrative expenses 5,070 3.8 4,273 3.2
Impairment of revenue equipment (278) (0.2) 4,741 3.5
Gain (Loss) on disposition of equipment 4 0.0 (8) 0.0
------------------------ ----------------------
Total operating expenses 132,769 100.0 136,952 101.4
------------------------ ----------------------
OPERATING INCOME (LOSS) (30) (0.0) (1,900) (1.4)
Interest expense, net 2,120 1.6 2,922 2.2
------------------------ ----------------------
EARNINGS (LOSS) BEFORE INCOME TAXES (2,150) (1.6) (4,822) (3.6)
Income tax provision (benefit) (859) (0.6) (2,207) (1.7)
------------------------ ----------------------
EARNINGS (LOSS) BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE (1,291) (1.0) (2,615) (1.9)
Cumulative effect of change in accounting
principle, net of tax effect (64) (0.0) (16,694) (12.4)
------------------------ ----------------------
NET EARNINGS (LOSS) $ (1,355) (1.0) $ (19,309) (14.3)
======================== ======================
EARNINGS (LOSS) PER COMMON SHARE - BASIC
Before cumulative effect of change
in accounting principles $ (0.18) $ (0.36)
Net earnings (loss) per share $ (0.19) $ (2.67)
Earnings (loss) per common share - diluted
Before cumulative effect of change
in accounting principles $ (0.18) $ (0.36)
Net earnings (loss) per share $ (0.19) $ (2.67)
Average common shares outstanding
Basic 7,201,498 7,239,232
Diluted 7,201,498 7,239,232
TRANSPORT CORPORATION OF AMERICA, INC.
BALANCE SHEET
JUNE 30, 2003 AND 2002
(IN THOUSANDS)
UNAUDITED
ASSETS
------
2003 2002
-------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 123 $ 165
Trade receivables, net of allowances 27,750 31,746
Other receivables 2,209 3,396
Operating supplies 881 1,180
Deferred income taxes 4,903 4,070
Prepaid expenses 3,772 3,859
-------------------------
TOTAL CURRENT ASSETS 39,638 44,416
REVENUE EQUIPMENT, AT COST 187,948 211,690
Less: accumulated depreciation (84,817) (91,309)
-------------------------
REVENUE EQUIPMENT, NET 103,131 120,381
PROPERTY AND OTHER EQUIPMENT:
Land, buildings, and improvements 17,674 17,890
Other equipment and leasehold improvements 22,910 24,883
Less: accumulated depreciation (17,131) (16,669)
-------------------------
PROPERTY AND OTHER EQUIPMENT, NET 23,453 26,104
-------------------------
REVENUE, PROPERTY AND OTHER EQUIPMENT, NET 126,584 146,485
OTHER ASSETS, NET 2,850 2,501
-------------------------
TOTAL ASSETS $ 169,072 $ 193,402
=========================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
2003 2002
-------------------------
CURRENT LIABILITIES:
Current maturities of Long Term Debt $ 15,563 $ 10,322
Current maturities of Capital Lease Obligations 4,076 5,896
Accounts payable 4,044 5,591
Checks issued in excess of cash balances 981 2,542
Due to independent contractors 2,539 1,813
Accrued expenses 17,515 15,552
-------------------------
TOTAL CURRENT LIABILITIES 44,718 41,716
LONG-TERM DEBT & CAPITAL LEASE OBLIGATIONS
Long-term debt less current maturities 25,203 44,479
Capital lease obligations less current maturities 15,139 19,266
-------------------------
TOTAL LONG-TERM DEBT
& CAPITAL LEASE OBLIGATIONS 40,342 63,745
DEFERRED INCOME TAXES 25,598 26,532
SHAREHOLDERS' EQUITY:
Common stock 72 72
Additional paid-in capital 29,877 30,476
Retained earnings 28,465 30,861
-------------------------
TOTAL SHAREHOLDERS' EQUITY 58,414 61,409
-------------------------
TOTAL LIABILITIES AND EQUITY $ 169,072 $ 193,402
=========================
TRANSPORT CORPORATION OF AMERICA, INC.
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
THREE MONTHS
------------------------- SIX MONTHS
2003 2002 2003 2002
------------------------- -------------------------
OPERATING STATISTICS
Company tractors, seated 908 1,026 908 1,026
Company tractors, other 81 151 81 151
Independent contractor 855 798 855 798
------------------------- -------------------------
Total tractors (at end of period) 1,844 1,975 1,844 1,975
Trailers (at end of period) 5,269 5,740 5,269 5,740
Average company tractors in service 926 1,078 948 1,115
Total loaded miles (000's) 44,587 47,040 89,894 92,432
Total miles (000's) 49,859 53,340 100,201 105,329
Trucking revenue per tractor per week* $ 2,652 $ 2,689 $ 2,670 $ 2,641
Trucking revenues per loaded mile* $ 1.399 $ 1.411 $ 1.394 $ 1.418
Trucking revenues per mile* $ 1.251 $ 1.245 $ 1.250 $ 1.244
Average empty mile percentage 10.6% 11.8% 10.3% 12.2%
Average length of haul, all miles 722 705 730 707
Average annual revenues per non-
driver employee (000's) $ 641 $ 597 $ 636 $ 579
FINANCIAL DATA (000's)
Trucking revenue $ 62,389 $ 66,392 $ 125,284 $ 131,040
Fuel surcharge revenue 2,665 1,116 6,165 1,431
Logistics 584 1,496 1,290 2,581
------------------------- -------------------------
Total revenue $ 65,638 $ 69,004 $ 132,739 $ 135,052
Capital expenditures, net of proceeds $ 14 $ (551) $ 386 $ (2,474)
Total debt and capital lease obligations $ 59,981 $ 79,963 $ 59,981 $ 79,963
* Excluding fuel surcharge