Exhibit 99.1
CONTACT:
John M. Hyre
Roadway Corporation
330-258-6080
ROADWAY AGREES TO ACQUIRE ARNOLD INDUSTRIES
All Cash Acquisition Will Be Immediately Accretive
Enhances Growth Strategy by Addition of Next Day Service
Combines Two Best-of-Class Transportation Operations
AKRON, Ohio - August 22, 2001 -- Roadway Corporation (NASDAQ: ROAD) and Arnold
Industries, Inc. (NASDAQ: AIND), today jointly announced that they have entered
into an agreement for Roadway Corporation to acquire Arnold Industries of
Lebanon, Pennsylvania, for $21.75 per share in cash.
Under terms of the agreement, Arnold Industries, and its subsidiaries New Penn
Motor Express and Arnold Transportation Services, will become subsidiaries of
Roadway Corporation. In addition, Roadway has entered into an agreement with the
management team at Arnold Logistics, a division of Arnold Transportation, and E.
H. Arnold, Chairman, President and CEO of Arnold Industries, Inc., granting them
the exclusive right to enter into an agreement to purchase Arnold's logistics
operations for $105 million in cash from Roadway after the acquisition of Arnold
Industries is completed. The total value of the transaction will be
approximately $475 million, net of the anticipated sale of the logistics
operations.
Both boards of directors have approved the transaction, which is subject to the
approval of Arnold shareholders and customary regulatory approvals. The
acquisition is expected to be completed before the end of the year. E. H. Arnold
has entered into an agreement with Roadway to vote his shares of Arnold common
stock, approximately sixteen percent of Arnold's current outstanding common
stock, in favor of the merger.
The acquisition is expected to be immediately accretive to Roadway Corporation's
earnings. Credit Suisse First Boston has provided Roadway Corporation a
commitment of up to $700 million to finance the acquisition, and to provide for
future working capital needs, subject to customary conditions.
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Roadway Corporation Acquires Arnold Industries Page 2
Roadway Corporation, with revenues of $3.05 billion, is the parent of Roadway
Express, one of the nation's largest transportation companies providing
less-than-truckload (LTL) and truckload freight services throughout North
America that includes export services to 66 countries.
New Penn Motor Express, headquartered in Lebanon, PA, is a next-day,
less-than-truckload (LTL), ground carrier serving twelve Northeastern states and
parts of the Southeast, Midwest and Canada through relationships with other
high-quality regional carriers. New Penn is widely regarded as a superior
service company and has historically led the industry with the best operating
profit margins. New Penn revenues totaled $236 million in 2000. Kenneth F.
Leedy, President of New Penn, will become President of the newly formed Next-day
Group at Roadway Corporation. Stephen M. O'Kane, currently New Penn's Executive
Vice President, will become President of New Penn Motor Express.
Arnold Transportation Services, headquartered in Jacksonville, FL, provides
high-quality irregular route and dedicated truckload services. The company
specializes in short-haul operations in the Northeast, Southeast, Midwest and
Southwest regions of the United States for its largely Fortune 500 customer
base. Revenues totaled $179 million in 2000. Michael S. Walters will continue in
his role as President & CEO of Arnold Transportation Services, and will report
to Robert L. Stull, Vice President - New Venture Commerce at Roadway
Corporation.
Roadway Express, New Penn Motor Express, and Arnold Transportation Services will
operate independently under their respective brand names. Each company's
management team and headquarters location will remain the same.
Michael W. Wickham, Chairman of the Board and CEO of Roadway Corporation stated,
"We are very pleased with this acquisition. Roadway Express' North American
transportation network covers the U.S., Canada and Mexico. It is designed to
serve two-day and beyond transportation needs. As a part of our overall
strategy, we were looking for an opportunity to enter the next-day, ground
market. Arnold Industries' New Penn Motor Express provides us with a
well-developed and proven model to accomplish our immediate objectives and begin
a new stage in our growth strategy."
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Roadway Corporation Acquires Arnold Industries Page 3
Arnold Industries Chairman and CEO, E. H. Arnold stated, "This transaction
brings together two industry leaders in a way that allows each operating unit to
continue to focus on what it does best. The Roadway Corporation acquisition
provides a fair value to Arnold Industries shareholders while protecting the
employees of our companies and ensuring the continued high-quality service our
customers have come to expect from the Arnold family of companies. It is with
these thoughts in mind that I wholeheartedly support this transaction."
Wickham further stated that, "Next Day is the fastest growing segment in the
surface transportation industry. It also provides attractive, sustainable
yields. There will be no additional capacity created by this acquisition. It is
a combination that should benefit both shippers and shareholders. Under this
acquisition, we will be operating two distinct networks with no duplication of
service. We recognize New Penn to be the most efficient and best operating
company in our industry. We don't intend to interfere with that or to help them
manage what they already do best."
"We welcome the opportunity to expand our presence in the truckload market with
the addition of Arnold Transportation Services. Again, we recognize the
importance of having a distinct business model tailored to meet customer
requirements to penetrate each segment within the transportation industry.
Arnold Transportation provides a solid business base in the truckload arena
focusing on the faster growing regional markets with much of their business
requiring next-day delivery," noted Wickham.
"Roadway and Arnold are well established transportation companies that are
'best-of-class' in their respective market segments. Each remains committed to
the customers and market segments in which they currently operate. Each company
will retain its autonomy to operate successfully as it has in the past," Wickham
said.
A conference call with securities analysts to discuss this acquisition will be
held at 2:00 PM (Eastern Time) on Wednesday, August, 22. The call will be
simulcast live on Roadway Corporation's web site at www.roadwaycorp.com and
remain available for playback for the next three weeks. Those wishing to
participate by telephone should dial (719) 457-2617, the access code is 462363.
Callers should dial in 5 to 10 minutes prior to the start of the call. An audio
playback will be available for forty-eight hours following the call by dialing
(719) 457-0820 and then entering the access code, 462363.
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Roadway Corporation Acquires Arnold Industries Page 4
Note: While most of the information provided herein is historical, some of the
comments made are forward-looking statements. Roadway Corporation's actual
performance may differ from that forecast as a result of variable factors such
as the state of the national economy, capacity and rate levels in the motor
freight industry, fuel prices, the success of the Roadway Corporation's
operating plans, and the failure of the acquisition to be consummated. These
forward-looking statements reflect management's analysis only as of the date of
this release.
Roadway Corporation undertakes no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that arise after
the date hereof. In addition to the disclosure contained herein, readers should
carefully review risks and uncertainties contained in other documents that
Roadway Corporation files from time to time with the Securities and Exchange
Commission.
Arnold Industries, Inc. is a holding company of transportation and logistics
companies. Business units include New Penn Motor Express, a Northeast regional
next-day less-than-truckload carrier, Arnold Transportation Services, an
irregular route and dedicated truckload carrier and Arnold Logistics, which
provides distribution, order fulfillment, direct mail and printing, call center
management, reverse logistics and contract packaging services. Consolidated
revenues totaled $462 million in 2000.
Included in the Dow Jones Transportation Average, Roadway Corporation (NASDAQ:
ROAD), is a holding company dedicated to identifying opportunities to expand the
transportation related service offerings available to customers through the
Roadway portfolio of strategically linked transportation companies. Principal
among Roadway Corporation's holdings is Roadway Express, a leading transporter
of industrial, commercial and retail goods with a variety of innovative services
designed to meet customer needs. An ISO 9002 certified carrier, Roadway Express
provides seamless service between all 50 states, Canada, Mexico and Puerto Rico
including export services to 66 countries. For additional information, contact
the Company at www.roadwaycorp.com.
*****
Arnold Industries Inc. will file a proxy statement with the Securities and
Exchange Commission on Schedule 14A. THE PROXY STATEMENT WILL CONTAIN IMPORTANT
INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE MERGER. The proxy statement will be made available to all
shareholders of Arnold Industries Inc., at no expense to them. The proxy
statement will also be available for free at the Commission's website at
www.sec.gov.
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Roadway Corporation Acquires Arnold Industries Page 5
Arnold Industries and certain other persons named below may be deemed to be
participants in the solicitation of proxies of Arnold Industries stockholders to
approve the merger of Arnold Industries and Roadway Corporation.
The participants in the solicitation may include the directors and executive
officers of Arnold Industries, who may have an interest in the transaction,
including as a result of holding stock or options of Arnold Industries. A
detailed list of the names and interests of Arnold Industries's directors and
executive officers is contained in Arnold Industries's Proxy Statement for its
Annual Meeting, held on May 2, 2001, which may be obtained without charge at the
Commission's website at www.sec.gov.
Certain of the officers, directors, and employees of Arnold Industries named
above may become officers, directors, or employees of Roadway Corporation
following the merger. In addition, certain of the directors, officers, or
employees may have employment or severance agreements that will be modified or
affected as a result of the merger.
Except as discussed above, to the knowledge of Arnold Industries, none of the
directors, executive officers or employees of Arnold Industries named above has
any interest, direct or indirect, by security holdings or otherwise in the
solicitation.
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