Exhibit 99.2
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Roadway Next Day Corporation
Quarters ended June 21, 2003 and June 15, 2002
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Roadway Next Day Corporation
Condensed Consolidated Balance Sheets (Unaudited)
JUNE 21, 2003 December 31, 2002
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(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 11,703 $ 12,992
Accounts receivable, net 20,058 24,785
Assets of discontinued operation - 87,431
Other current assets 7,028 6,618
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Total current assets 38,789 131,826
Carrier operating property, at cost 101,723 100,854
Less allowance for depreciation 14,959 10,240
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Net carrier operating property 86,764 90,614
Goodwill, net 269,093 269,093
Other assets 20,934 22,511
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Total assets $ 415,580 $ 514,044
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Liabilities and shareholders' equity Current liabilities:
Accounts payable $ 11,839 $ 14,209
Salaries and wages 9,066 8,522
Payable to Roadway Corporation 11,732 33,703
Liabilities of discontinued operation - 32,407
Other current liabilities 5,008 4,209
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Total current liabilities 37,645 93,050
Long-term liabilities:
Casualty claims and other 8,553 8,456
Deferred income taxes 10,476 10,666
Payable to Roadway Corporation 270,279 273,513
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Total long-term liabilities 289,308 292,635
Parent company investment 88,627 128,359
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Total liabilities and shareholders' equity $ 415,580 $ 514,044
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Note: The balance sheet at December 31, 2002 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed consolidated financial statements.
2
Roadway Next Day Corporation
Condensed Statements of Consolidated Income (Unaudited)
Twelve Weeks Ended
(Second Quarter)
JUNE 21, 2003 June 15, 2002
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(in thousands)
Revenue $ 50,372 $ 49,594
Operating expenses:
Salaries, wages and benefits 33,217 33,329
Operating supplies and expenses 6,298 4,974
Purchased transportation 449 458
Operating taxes and licenses 1,445 1,401
Insurance and claims 885 1,164
Provision for depreciation 2,399 2,736
Loss (gain) on sale of property 51 (20)
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Total operating expenses 44,744 44,042
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Operating income from continuing operations 5,628 5,552
Other (expense), net (5,759) (5,873)
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(Loss) from continuing operations before income taxes (131) (321)
Income tax expense (benefit) 75 (251)
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(Loss) from continuing operations (206) (70)
(Loss) income from discontinued operations (302) 1,038
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Net (loss) income $ (508) $ 969
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Twenty-Four Weeks Ended
(Two Quarters)
JUNE 21, 2003 June 15, 2002
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(in thousands)
Revenue $ 99,198 $ 95,003
Operating expenses:
Salaries, wages and benefits 67,284 64,647
Operating supplies and expenses 12,937 10,183
Purchased transportation 991 841
Operating taxes and licenses 2,852 2,778
Insurance and claims 2,060 2,207
Provision for depreciation 4,773 5,555
Loss (gain) on sale of property 60 (71)
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Total operating expenses 90,957 86,140
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Operating income from continuing operations 8,241 8,863
Other (expense), net (12,053) (11,810)
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(Loss) from continuing operations before income taxes (3,812) (2,947)
Income tax (benefit) (1,327) (1,146)
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(Loss) from continuing operations (2,485) (1,801)
(Loss) income from discontinued operations (155) 1,162
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Net (loss) income $ (2,640) $ (639)
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See notes to condensed consolidated financial statements.
3
Roadway Next Day Corporation
Condensed Statements of Consolidated Cash Flows (Unaudited)
Twenty-four Weeks Ended
(Two Quarters)
JUNE 21, 2003 June 15, 2002
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(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) from continuing operations $ (2,485) $ (1,801)
Depreciation and amortization 6,454 6,489
Other operating adjustments 3,064 25,970
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Net cash provided by operating activities 7,033 30,658
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of carrier operating property (1,232) (3,912)
Sales of carrier operating property 248 348
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Net cash (used) by investing activities (984) (3,564)
CASH FLOWS FROM FINANCING ACTIVITIES
Transfer to parent (7,300) (39,086)
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Net cash (used) by financing activities (7,300) (39,086)
Net (decrease) in cash and cash equivalents from
continuing operations (1,251) (11,992)
Net (decrease) in cash and cash equivalents from
discontinued operations (38) (5,163)
Cash and cash equivalents at beginning of period 12,992 29,469
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Cash and cash equivalents at end of period $ 11,703 $ 12,314
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See notes to condensed consolidated financial statements.
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Roadway Next Day Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
Note 1--Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the twelve and twenty four weeks ending
June 21, 2003 are not necessarily indicative of the results that may be expected
for the year ended December 31, 2003. For further information, refer to the
consolidated financial statements and footnotes thereto included in the Roadway
Corporation Annual Report on Form 10-K for the year ended December 31, 2002.
The Company completed the required transitional goodwill impairment test under
SFAS No. 142 for all reporting units effective June 21, 2003 which did not
indicate any impairment. The Company expects to perform the required annual
goodwill impairment assessment on a recurring basis at the end of the second
quarter each year, or more frequently should any indicators of possible
impairment be identified.
The Company operates in one business segment, New Penn Motor Express, Inc.,
which provides regional next-day LTL service primarily in New England and the
Middle Atlantic states.
Note 2--Accounting Period
The Company operates on 13 four-week accounting periods with 12 weeks in each of
the first three quarters and 16 weeks in the fourth quarter.
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Note 3 - Discontinued operations
On December 26, 2002, the Company entered into an agreement to sell Arnold
Transportation Services (ATS) to a management group led by the unit's president
and a private equity firm, for approximately $55,000,000. The ATS business
segment was acquired as part of the Company's purchase of Roadway Next Day in
November 2001, but did not fit the Company's strategic focus of being a LTL
carrier. The transaction was completed on January 23, 2003. The Company did not
recognize a significant gain or loss as a result of this transaction.
The Company has reported the ATS results as a discontinued operation in the
accompanying financial statements and, unless otherwise stated, the notes to the
financial statements for all periods presented exclude the amounts related to
this discontinued operation.
The following table presents revenue and income from the discontinued operations
for the two quarters ended June 21, 2003 and June 15, 2002. The two quarters
ended June 21, 2003 includes results of operations only through the disposal
date, January 23, 2003.
TWELVE WEEKS ENDED TWENTY-FOUR WEEKS ENDED
(SECOND QUARTER) (TWO QUARTERS)
JUNE 21, 2003 June 15, 2002 JUNE 21, 2003 June 15, 2002
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(in thousands)
Revenue $ - $ 41,146 $ 9,267 $ 79,347
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Pre-tax income from discontinued operations (461) 1,713 (263) 1,925
Income tax (benefit) expense (159) 675 (108) 763
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(Loss) income from discontinued operations $ (302) $ 1,038 $ (155) $ 1,162
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