SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-18605
SWIFT TRANSPORTATION CO., INC.
(Exact name of registrant as specified in its charter)
Nevada 86-0666860
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
2200 South 75th Avenue
Phoenix, AZ 85043
(602) 269-9700
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive office)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to the
filing requirements for at least the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date (November 3, 1998)
Common stock, $.001 par value: 42,345,481 shares
EXHIBIT INDEX AT PAGE 16
TOTAL PAGES 27
PART I
FINANCIAL INFORMATION
Page
Number
Item 1. Financial statements
Condensed consolidated balance sheets
as of September 30, 1998 (unaudited) and
December 31, 1997 3-4
Condensed consolidated statements of
earnings (unaudited) for the three and nine month
periods ended September 30, 1998 and 1997 5
Condensed consolidated statements of cash
flows (unaudited) for the nine month
periods ended September 30, 1998 and 1997 6-7
Notes to condensed consolidated financial statements 8-9
Item 2. Management's discussion and analysis of financial
condition and results of operations 10-15
PART II
OTHER INFORMATION
Items 1, 2,
3, 4 and 5. Not applicable
Item 6. Exhibits and Reports on Form 8-K 16
2
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
September 30, December 31,
1998 1997
---- ----
(unaudited)
ASSETS
Current assets:
Cash $ 4,308 $ 5,726
Accounts receivable, net 112,306 92,587
Equipment sales receivable 2,936 3,284
Inventories and supplies 2,975 4,509
Prepaid taxes, licenses and insurance 6,746 5,090
Assets held for sale 5,468 5,468
Deferred income taxes 7,472 5,280
-------- --------
Total current assets 142,211 121,944
-------- --------
Property and equipment, at cost:
Revenue and service equipment 441,595 366,223
Land 8,756 7,520
Facilities and improvements 76,254 62,760
Furniture and office equipment 15,476 13,949
-------- --------
Total property and equipment 542,081 450,452
Less accumulated depreciation and amortization 125,339 111,917
-------- --------
Net property and equipment 416,742 338,535
-------- --------
Other assets 1,897 1,976
Goodwill 8,111 8,679
-------- --------
$568,961 $471,134
======== ========
See accompanying notes to condensed consolidated financial statements.
3
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
September 30, December 31,
1998 1997
---- ----
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 31,490 $ 14,469
Accrued liabilities 32,738 20,177
Current portion of claims accruals 24,156 16,281
Current portion of long-term debt 1,198 6,849
-------- --------
Total current liabilities 89,582 57,776
-------- --------
Borrowings under line of credit 79,000 56,500
Long-term debt, less current portion 15,227 16,920
Claims accruals, less current portion 26,148 21,343
Deferred income taxes 53,273 44,420
Stockholders' equity:
Preferred stock, par value $.001 per share
Authorized 1,000,000 shares; none issued
Common stock, par value $.001 per share
Authorized 75,000,000 shares; issued
43,167,441 and 42,793,557 shares at
September 30,1998 and December 31, 1997,
respectively 43 43
Additional paid-in capital 118,187 116,141
Retained earnings 200,499 161,407
-------- --------
318,729 277,591
Less treasury stock, at cost (881,050 and
331,050 shares at September 30,1998 and
December 31, 1997, respectively.) 12,998 3,416
-------- --------
Total stockholders' equity 305,731 274,175
-------- --------
Commitments and contingencies
$568,961 $471,134
======== ========
See accompanying notes to condensed consolidated financial statements.
4
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(unaudited)
(In thousands, except share data)
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
Operating revenue $227,184 $188,071 $634,624 $524,999
Operating expenses:
Salaries, wages and employee
benefits 84,307 64,677 229,906 183,718
Operating supplies and expenses 20,602 17,652 59,010 46,807
Fuel 23,213 22,118 69,080 67,584
Purchased transportation 33,948 25,638 97,817 69,224
Rental expense 11,039 11,809 30,215 35,198
Insurance and claims 6,648 4,721 19,201 15,863
Depreciation and amortization 11,127 9,858 33,071 27,748
Communication and utilities 3,001 2,848 8,387 7,915
Operating taxes and licenses 5,990 5,921 18,606 18,036
-------- -------- -------- --------
Total operating expenses 199,875 165,242 565,293 472,093
-------- -------- -------- --------
Operating income 27,309 22,829 69,331 52,906
Other (income) expenses:
Interest expense 1,306 1,330 4,320 3,470
Interest income (90) (52) (213) (138)
Other (206) (101) (483) (271)
-------- -------- -------- --------
Other (income) expenses, net 1,010 1,177 3,624 3,061
-------- -------- -------- --------
Earnings before income taxes 26,299 21,652 65,707 49,845
Income taxes 10,655 8,770 26,615 20,200
-------- -------- -------- --------
Net earnings $ 15,644 $ 12,882 $ 39,092 $ 29,645
======== ======== ======== ========
Basic earnings per share $ .37 $ .30 $ .92 $ .70
======== ======== ======== ========
Diluted earnings per share $ .36 $ .30 $ .90 $ .69
======== ======== ======== ========
See accompanying notes to condensed consolidated financial statements.
5
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited)
(In thousands)
Nine Months
Ended September 30,
1998 1997
---- ----
Cash flows from operating activities:
Net earnings $ 39,092 $ 29,645
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 30,396 27,815
Deferred income taxes 6,661 3,600
Provision for losses on accounts receivable 770 180
Amortization of deferred compensation 152 90
Change in assets and liabilities:
Increase in accounts receivable (20,489) (16,835)
Decrease in inventories and supplies 1,534 417
Increase in prepaid expenses (1,656) (3,667)
Increase in other assets (17) (689)
Increase in accounts payable, accrued
liabilities and claims accruals 42,262 17,169
--------- --------
Net cash provided by operating activities 98,705 57,725
--------- --------
Cash flows from investing activities:
Proceeds from sale of property and equipment 48,117 17,727
Capital expenditures (158,556) (97,351)
Cash expended for purchase of DTI assets (3,749)
Treasury stock purchases (9,582)
Payments received on equipment sale receivables 3,284 390
--------- --------
Net cash used in investing activities (116,737) (82,983)
--------- --------
See accompanying notes to condensed consolidated financial statements.
6
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited)
(In thousands)
Nine Months
Ended September 30,
1998 1997
---- ----
Cash flows from financing activities:
Repayments of long-term debt $ (7,780) $(23,510)
Increase in borrowings under line of credit 22,500 56,000
Payment of stock split fractional shares (21)
Proceeds from issuance of common stock
under stock option and stock purchase plans 1,915 1,645
-------- --------
Net cash provided by financing activities 16,614 34,135
-------- --------
Net increase (decrease) in cash (1,418) 8,877
Cash at beginning of period 5,726 1,210
-------- --------
Cash at end of period $ 4,308 $ 10,087
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 4,147 $ 3,391
Income taxes $ 15,718 $ 13,079
Supplemental schedule of noncash investing and
Financing activities:
Equipment sales receivables $ 2,936 $ 5,324
Direct financing for purchase of equipment $ 436
See accompanying notes to condensed consolidated financial statements.
7
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 1. Basis of Presentation
The condensed consolidated financial statements include the accounts of
Swift Transportation Co., Inc., a Nevada holding company, and its
wholly-owned subsidiaries (the Company). All significant intercompany
balances and transactions have been eliminated.
The financial statements have been prepared in accordance with generally
accepted accounting principles, pursuant to rules and regulations of the
Securities and Exchange Commission. In the opinion of management, the
accompanying financial statements include all adjustments which are
necessary for a fair presentation of the results for the interim periods
presented. Certain information and footnote disclosures have been
condensed or omitted pursuant to such rules and regulations. These
condensed consolidated financial statements and notes thereto should be
read in conjunction with the consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997. Results of operations in interim periods
are not necessarily indicative of results to be expected for a full
year.
Note 2. Contingencies
The Company is involved in certain claims and pending litigation arising
from the normal course of business. Based on the knowledge of the facts
and, in certain cases, opinions of outside counsel, management believes
the resolution of claims and pending litigation will not have a material
adverse effect on the financial condition of the Company.
Note 3. Stock Split
On February 20, 1998, the Company's Board of Directors approved a
3-for-2 stock split effected in the form of a stock dividend and payable
on March 12, 1998 to the stockholders of record at the close of business
on March 2, 1998. All share amounts, share prices and earnings per share
have been retroactively adjusted to reflect this 3-for-2 stock split.
Note 4. Line of Credit
In August 1998, the Company modified its unsecured line of credit
agreement to increase the maximum available borrowings from $110 million
to $170 million and extend the maturity to January 16, 2003.
8
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 5. Stock Repurchase
The Company purchased 550,000 shares of its common stock during the
three months ended September 30, 1998 for a total cost of $9,582,000.
These shares are being held as treasury stock and may be used for
issuances under the Company's employee stock option and purchase plans
or for other general corporate purposes.
9
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Report on Form 10-Q contains forward-looking statements. The words
"believe," "expect," "anticipate," and "project," and similar expressions
identify forward-looking statements, which speak only as of the date the
statement was made. Such forward-looking statements are within the meaning of
that term in Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such statements may
include, but are not limited to, projections of revenues, income, or loss,
capital expenditures, plans for future operations, financing needs or plans, the
impact of inflation and plans relating to the foregoing.
Statements in Exhibit 99 to this Quarterly Report on Form 10-Q and in the
Company's Annual Report on Form 10-K, including Notes to the Consolidated
Financial Statements and Management's Discussion and Analysis of Financial
Condition and Results of Operations," describe factors, among others, that could
contribute to or cause such differences. Additional factors that could cause
actual results to differ materially from those expressed in such forward-looking
statements are set forth in "Business" and " Market for the Registrant's Common
Stock and Related Stockholder Matters" in the Company's Annual Report on Form
10-K.
YEAR 2000 ISSUE
The Company is in the process of performing a comprehensive review of its Year
2000 issues and has completed its initial review of internal systems
(information technology ("IT") and non-IT). The majority of the Company's
application software programs are purchased from and maintained by vendors.
Therefore, the Company is working with these software vendors to verify these
applications become Year 2000 compliant. The Company estimates the status of
progress of these internal systems as follows:
Vendor Modifications Testing Commenced
Being Performed
IT Systems 85% 20%
Non-IT Systems 70% 15%
The Company presently believes that with modifications and updates to existing
software, the cost of which is not expected to be material, the Year 2000
problem will not pose significant operational problems for the Company's
internal systems.
10
As part of the Company's comprehensive review, it is continuing to verify the
Year 2000 readiness of third parties (vendors and customers) with whom the
Company has material relationships. At present, the Company is not able to
determine the effect on the Company's results of operations, liquidity, and
financial condition in the event the Company's material vendors and customers
are not Year 2000 compliant. The Company will continue to monitor the progress
of its material vendors and customers and formulate a contingency plan at that
point in time when the Company does not believe a material vendor or customer
will be compliant.
OVERVIEW
Although the trend in the truckload segment of the motor carrier industry over
the past several years has been towards consolidation, the truckload industry
remains highly fragmented. Management believes the industry trend towards
financially stable "core carriers" will continue and result in continued
industry consolidation. In response to this trend, the Company continues to
expand its fleet with an increase of 788 tractors to 6,578 tractors as of
September 30, 1998 up from 5,790 tractors as of September 30, 1997. The owner
operator portion of the Company's fleet increased to 1,166 as of September 30,
1998 from 848 as of September 30, 1997.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO
THREE MONTHS ENDED SEPTEMBER 30, 1997
Operating revenue increased $39.1 million or 20.8% to $227.2 million for the
three months ended September 30, 1998 from $188.1 million for the corresponding
period of 1997. The increase in operating revenue is primarily the result of the
expansion of the Company's fleet as a result of strong shipper demand. The
Company's freight rates increased by approximately 2% in the third quarter of
1998 compared to the third quarter of 1997.
The Company's operating ratio (operating expenses expressed as a percentage of
operating revenue) for the third quarter of 1998 was 88.0% compared to 87.9% in
the comparable period of 1997. The Company's operating ratio for the three
months ended September 30, 1998 increased as a result of increases in certain
components of operating expenses as a percentage of operating revenue as
discussed below. The Company's empty mile factor for linehaul operations was
13.2% and 13.1% and average loaded linehaul revenue per mile was $ 1.32 and
$1.30 in the third quarter of 1998 and 1997, respectively.
Salaries, wages and employee benefits represented 37.1% of operating revenue for
the three months ended September 30, 1998 compared with 34.4% in 1997. The
increase is primarily due to an increase in workmen's compensation, the accrual
for the Company's profit sharing contribution, normal wage increases and
associated benefits and taxes.
From time to time the industry has experienced shortages of qualified drivers.
If such a shortage were to occur over a prolonged period and increases in driver
pay rates were to occur in order to attract and retain drivers, the Company's
11
results of operations would be negatively impacted to the extent that
corresponding rate increases were not obtained.
Fuel as a percentage of operating revenue was 10.2% for the third quarter of
1998 versus 11.8% in 1997. The decrease is partially due to an increase in the
number of owner operators who are responsible for their own fuel. In addition,
actual fuel cost per gallon decreased by approximately 13 cents per gallon in
the third quarter of 1998 versus the third quarter of 1997.
Increases in fuel costs, to the extent not offset by rate increases or fuel
surcharges, could have an adverse effect on the operations and profitability of
the Company. Management believes the most effective protection against fuel cost
increases is to maintain a fuel efficient fleet and to implement fuel surcharges
when such option is necessary and available. The Company currently does not use
derivative-type hedging products but is currently evaluating the possible use of
these products.
Purchased transportation as a percentage of operating revenue was 14.9% for the
three months ended September 30, 1998 compared to 13.6% in 1997. The increase is
due to the growth of the owner operator fleet to 1,166 as of September 30, 1998
from 848 as of September 30, 1997.
Rental expense as a percentage of operating revenue was 4.9% for the third
quarter of 1998 versus 6.3% in 1997. At September 30, 1998 and 1997, leased
tractors represented 54% and 63%, respectively, of the total fleet of Company
tractors. In addition to the reduction in the percentage of tractors which were
leased, rental expense was positively impacted by a reduction in the number of
leased trailers as well as a slight reduction in the average lease rate for
tractors in the third quarter of 1998 versus the third quarter of 1997. When it
is economically advantageous to do so, the Company will purchase then sell
tractors that it currently leases by exercising the purchase option contained in
the lease. Gains on these activities are recorded as a reduction of rent
expense. The Company recorded $223,000 in the third quarter of 1998 and no gain
during the third quarter of 1997 from the sale of leased tractors.
Depreciation and amortization expense as a percentage of operating revenue was
4.9% in the third quarter of 1998 versus 5.2% in 1997. The Company includes
gains and losses from the sale of owned revenue equipment in depreciation and
amortization expense. During the three month period ended September 30, 1998,
net gains from the sale of revenue equipment reduced depreciation and
amortization expense by approximately $2.1 million compared to approximately
$1.1 million in the third quarter of 1997. Exclusive of gains, which reduced
this expense, depreciation and amortization expense as a percentage of operating
revenue was 5.8% in the third quarter of 1998 and 1997.
Insurance and claims expense represented 2.9% and 2.5% of operating revenue in
the third quarter of 1998 and 1997, respectively. The Company's insurance
program for liability, physical damage and cargo damage involves self-insurance
with varying risk retention levels. Claims in excess of these risk retention
levels are covered by insurance in amounts which management considers adequate.
The Company accrues the estimated cost of the uninsured portion of pending
claims. These accruals are estimated based on management's evaluation of the
12
nature and severity of individual claims and an estimate of future claims
development based on historical claims development trends.
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO
NINE MONTHS ENDED SEPTEMBER 30, 1997
Operating revenue increased $109.6 million or 20.9% to $634.6 million for the
nine months ended September 30, 1998 from $525.0 million for the corresponding
period of 1997. The increase in operating revenue is primarily the result of the
expansion of the Company's fleet and rate increases.
The Company's operating ratio (operating expenses expressed as a percentage of
operating revenue) for the first nine months of 1998 was 89.1% compared to 89.9%
in the comparable period of 1997. The Company's operating ratio for the nine
months ended September 30, 1998 improved as a result of the aforementioned
increase in operating revenue combined with decreases in certain components of
operating expenses as a percentage of operating revenue as discussed below. The
Company's empty mile factor for linehaul operations was 13.6% and 13.9% and
average loaded linehaul revenue per mile was $1.32 and $1.30 in the first nine
months of 1998 and 1997, respectively.
Salaries, wages and employee benefits represented 36.2% of operating revenue for
the nine months ended September 30, 1998 compared with 35.0% in 1997. The
increase is primarily due to an increase in the accrual for the Company's profit
sharing contribution and normal wage increases and associated benefits and
taxes.
Fuel as a percentage of operating revenue was 10.9% for the first nine months of
1998 versus 12.9% in 1997. The decrease is due to an increase in the number of
owner operators who are responsible for their own fuel and the reduction in fuel
prices as discussed above.
Purchased transportation as a percentage of operating revenue was 15.4% for the
nine months ended September 30, 1998 compared to 13.2% in 1997. The increase is
due to the growth of the owner operator fleet to 1,166 as of September 30, 1998
from 848 as of September 30, 1997.
Rental expense as a percentage of operating revenue was 4.8% for the first nine
months of 1998 versus 6.7% in 1997. When it is economically advantageous to do
so, the Company will purchase then sell tractors that it currently leases by
exercising the purchase option contained in the lease. Gains on these activities
are recorded as a reduction of rent expense. The Company recorded $2.7 million
in 1998 and no gain during the first nine months of 1997 from the sale of leased
tractors. As discussed above, rental expense decreased in the first nine months
of 1998 versus 1997 as a result of a reduction in the percentage of leased
tractors, number of leased trailers and the average lease rate for tractors.
Depreciation and amortization expense as a percentage of operating revenue was
5.2% in the first nine months of 1998 versus 5.3% in 1997. The Company includes
gains and losses from the sale of owned revenue equipment in depreciation and
amortization expense. During the nine month period ended September 30, 1998, net
gains from the sale of revenue equipment reduced depreciation and amortization
expense by approximately $4.6 million compared to approximately $2.9 million in
the first nine months of 1997. Exclusive of gains, which reduced this expense,
13
depreciation and amortization expense as a percentage of operating revenue was
5.9% and 5.8% in the first nine months of 1998 and 1997, respectively.
Insurance and claims expense represented 3.0% of operating revenue in the first
nine months of 1998 and 1997. The Company's insurance program for liability,
physical damage and cargo damage involves self-insurance with varying risk
retention levels. Claims in excess of these risk retention levels are covered by
insurance in amounts which management considers adequate. The Company accrues
the estimated cost of the uninsured portion of pending claims. These accruals
are estimated based on management's evaluation of the nature and severity of
individual claims and an estimate of future claims development based on
historical claims development trends.
LIQUIDITY AND CAPITAL RESOURCES
The continued growth in the Company's business requires significant investment
in new revenue equipment, upgraded and expanded facilities, and enhanced
computer hardware and software. The funding for this expansion has been from
cash provided by operating activities, proceeds from the sale of revenue
equipment, long-term debt, borrowings on the Company's line of credit, the use
of operating leases to finance the acquisition of revenue equipment and from
periodic public offerings of common stock.
Net cash provided by operating activities was $98.7 million in the first nine
months of 1998 compared to $57.7 million in 1997. The increase is primarily
attributable to an increase in net earnings and accounts payable, accrued
liabilities and claims accruals.
Prepaid expenses increased by $1.7 million from December 31, 1997 to September
30, 1998. The increase is primarily due to significant annual license fees which
are prepaid in the first quarter of each year and amortized over the remainder
of the year.
Net cash used in investing activities increased to $116.7 million in the first
nine months of 1998 from $83.0 million in 1997. The increase is due primarily to
greater capital expenditures and treasury stock purchases in 1998 offset by
increased proceeds from the sale of property and equipment and payments received
on equipment sales receivable in 1998 along with a reduction in cash expended
for Direct Transit, Inc. assets in 1997.
As of September 30, 1998, the Company had commitments outstanding to acquire
replacement and additional revenue equipment for approximately $243 million. The
Company has the option to cancel such commitments upon 60 days notice. The
Company believes it has the ability to obtain debt and lease financing and
generate sufficient cash flows from operating activities to support these
acquisitions of revenue equipment.
During the first nine months of 1998, the Company incurred approximately $18.5
million of non-revenue equipment capital expenditures. These expenditures were
primarily for facilities and equipment.
14
The Company anticipates that it will expend approximately $10 million during the
remainder of the year for various facilities upgrades and acquisition and
development of terminal facilities. Factors such as costs and opportunities for
future terminal expansions may change the amount of such expenditures.
The funding for capital expenditures has been and is anticipated to continue to
be from a combination of cash provided by operating activities, amounts
available under the Company's line of credit and debt and lease financing. The
availability of capital for revenue equipment and other capital expenditures
will be affected by prevailing market conditions and the Company's financial
condition and results of operations.
Net cash provided by financing activities amounted to $16.6 million in the first
nine months of 1998 compared to $34.1 million in 1997. This decrease is
primarily due to reduced borrowings under the line of credit.
Management believes it will be able to finance its needs for working capital,
facilities improvements and expansion, as well as anticipated fleet growth
through a combination of revenue equipment purchases and strategic acquisitions,
as opportunities become available, with cash flows from future operations,
borrowings available under the line of credit and with long-term debt and
operating lease financing believed to be available to finance revenue equipment
purchases. Over the long term, the Company will continue to have significant
capital requirements, which may require the Company to seek additional
borrowings or equity capital. The availability of debt financing or equity
capital will depend upon the Company's financial condition and results of
operations as well as prevailing market conditions, the market price of the
Company's common stock and other factors over which the Company has little or no
control.
INFLATION
Inflation can be expected to have an impact on the Company's operating costs. A
prolonged period of inflation would cause interest rates, fuel, wages and other
costs to increase and would adversely affect the Company's results of operations
unless freight rates could be increased correspondingly. However, the effect of
inflation has been minimal over the past three years.
SEASONALITY
In the transportation industry, results of operations generally show a seasonal
pattern as customers reduce shipments after the winter holiday season. The
Company's operating expenses also tend to be higher in the winter months
primarily due to colder weather which causes higher fuel consumption from
increased idle time.
15
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
PART II OTHER INFORMATION
Items 1, 2, 3, 4 and 5. Not applicable
Item 6. Exhibits and reports on Form 8-K
(a) Exhibit 10.13 - First Modification Agreement to Note Agreement
dated January 16, 1997 by and between Swift Transportation Co.,
Inc. and Wells Fargo Bank, N.A., ABN Amro Bank N.V., The Chase
Manhattan Bank and The First National Bank of Chicago.
Exhibit 10.14 - Second Modification Agreement to Note Agreement
dated January 16, 1997 by and between Swift Transportation Co.,
Inc. and Wells Fargo Bank, N.A., ABN Amro Bank N.V., The First
National Bank of Chicago, Norwest Bank Arizona, N.A., Keybank
National Association and Union Bank of California, N.A.
Exhibit 11 - Schedule of Computation of Net Earnings Per Share
Exhibit 27 - Financial Data Schedule
Exhibit 99 - Private Securities Litigation Reform Act of 1995
Safe Harbor Compliance Statement for Forward-Looking Statements
(b) No Current Reports on Form 8-K were filed during the three
months ended September 30, 1998.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SWIFT TRANSPORTATION CO., INC.
Date: November 9, 1998 /s/ William F. Riley III
--------------------------------
(Signature)
William F. Riley III
Chief Financial Officer
16