Exhibit 99.2
(ROADWAY CORPORATION LOGO)
CONTACT:
John M. Hyre
Investor and Public Relations
330-258-6080
ROADWAY'S THIRD QUARTER 2003 EPS $0.71 BEFORE ACQUISITION-RELATED CHARGES
CORRECTED PROFORMA INCOME STATEMENT (3 QUARTERS) ON PAGE 8
AKRON, Ohio - September 30, 2003 - Roadway Corporation (Nasdaq: ROAD) today
reported that revenues for its third quarter, which ended September 13, 2003,
were $751,594,000, up 10% when compared to revenues of $681,696,000 for the
third quarter of 2002. The Company reported a net loss of $3,401,000, or $0.18
per share (diluted), compared to net income of $6,936,000, or $0.36 per share
(diluted), for the third quarter of 2002. Before charges related to the pending
acquisition of Roadway Corporation by Yellow Corporation and effective tax-rate
adjustments, net income for the quarter would have been $13,482,000 or $0.71 per
share (diluted).
For the 36 weeks constituting the Company's first three quarters, net income was
$10,917,000, or $0.57 per share (diluted), compared to net income of
$10,861,000, or $0.57 per share (diluted), for the same period in 2002. For the
first three quarters of 2003, revenues were $2,247,192,000, up 16% when compared
to revenues of $1,936,666,000 for the first three quarters of last year. The
first three quarters of 2003 contained four more working days than the same
period in 2002.
James D. Staley, President and CEO of Roadway Corporation stated: "We are
pleased to report that our operating subsidiaries performed quite well. The 10%
rise in revenues, combined with effective expense control, resulted in a 64%
increase in operating income, before the recognition of $24.3 million in
acquisition-related charges. These charges resulted primarily from the vesting
of restricted stock awards, other compensation expense and transaction costs.
The Company's effective tax rate has shifted from 42% to 53.6% as a result of
these acquisition-related costs."
"Roadway Express implemented a 5.9% general freight rate increase on
non-contract freight effective July 13. During the quarter, Roadway Express
increased its yield per ton by 4.3% while increasing tonnage levels 6.4% above
the same period last year. Roadway Express has not experienced any meaningful
diversion of freight or customer flight due to the planned Yellow/Roadway
acquisition. Overall, our customers seem to be more positive about the direction
of the economy, although real economic growth is coming slowly," Staley said.
"New Penn's revenue grew by approximately one percent and their rates rose by
3.3%, even though they experienced a 2.5% tonnage decline for the quarter. While
operating in the highly competitive and economically difficult Northeast market,
New Penn improved its operating margins, excluding acquisition-related charges,
and finished the quarter with an operating ratio of 89. As a next-day carrier,
New Penn did not benefit from the freight added to the market when Consolidated
Freightways ceased operations," Staley concluded.
Looking forward, the Company anticipates full-year 2003 revenue to increase
approximately 7% to 8%, and earnings-per-share from continuing operations,
excluding the impact of acquisition-related charges, to be consistent with
previously provided guidance of between $2.36 and $2.60 compared to $1.85 in
2002. Including acquisition-related charges and the higher effective tax rate,
the Company expects earnings-per-share for full-year 2003 to be in the range of
$1.36 to $1.60 excluding any future acquisition-related charges. Fourth quarter
year-over-year comparisons will be more difficult, as the impact of Consolidated
Freightways' closure was already included in the fourth quarter of 2002, and the
period will have four less working days than the same period in 2002.
-more-
ROADWAY CORPORATION PAGE 2
THIRD QUARTER 2003
Roadway declared October 16, 2003 as the record date for Roadway stockholders in
connection with the pending Yellow/Roadway transaction. Stockholders of Roadway
common stock as of the close of trading on October 16, 2003, will have the right
to participate in a special meeting of stockholders to approve matters related
to the acquisition of Roadway by Yellow. The shareholder meeting date has not
been set, but is expected to occur in December 2003.
As a result of the sale of Arnold Transportation Services (ATS) on January 23,
2003, ATS has been accounted for as a discontinued operation for all periods
presented. Assets and liabilities of ATS are included in the current section of
the Condensed Consolidated Balance Sheet at December 31, 2002.
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
ROADWAY CORPORATION AND SUBSIDIARIES
Twelve Weeks Ended
(Third Quarter)
September 13, 2003 September 7, 2002
------------------ -----------------
(in thousands, except per share data)
Revenue $ 751,594 $ 681,696
Operating expenses:
Salaries, wages and benefits 477,174 438,017
Operating supplies and expenses 122,412 108,176
Purchased transportation 77,246 63,850
Operating taxes and licenses 18,515 17,966
Insurance and claims 15,133 16,483
Provision for depreciation 16,658 18,079
Net (gain) loss on sale of operating property (5,068) 1,075
Compensation and other expense related to the acquisition
by Yellow 24,337 --
--------- ---------
Total operating expenses 746,407 663,646
--------- ---------
Operating income from continuing operations 5,187 18,050
Other (expense), net (6,279) (6,650)
--------- ---------
(Loss) income from continuing operations before income taxes (1,092) 11,400
Provision for income taxes 2,309 4,944
--------- ---------
(Loss) income from continuing operations (3,401) 6,456
Income from discontinued operations -- 480
--------- ---------
Net (loss) income $ (3,401) $ 6,936
========= =========
Earnings (loss) per share - basic:
Continuing operations $ (0.18) $ 0.35
Discontinued operations -- 0.03
--------- ---------
Total earnings per share - basic $ (0.18) $ 0.38
Earnings (loss) per share - diluted:
Continuing operations $ (0.18) $ 0.33
Discontinued operations -- 0.03
--------- ---------
Total earnings per share - diluted $ (0.18) $ 0.36
Average shares outstanding - basic 19,460 18,478
Average shares outstanding - diluted 19,460 18,914
Operating ratio 99.3% 97.4%
(Loss) profit margin from continuing operations (0.5)% 0.9%
-more-
ROADWAY CORPORATION PAGE 3
THIRD QUARTER 2003
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
ROADWAY CORPORATION AND SUBSIDIARIES
Thirty-six Weeks Ended
(Three Quarters)
September 13, 2003 September 7, 2002
------------------ -----------------
(in thousands, except per share data)
Revenue $ 2,247,192 $ 1,936,666
Operating expenses:
Salaries, wages and benefits 1,420,832 1,264,454
Operating supplies and expenses 382,846 314,489
Purchased transportation 227,755 173,134
Operating taxes and licenses 57,069 51,011
Insurance and claims 44,774 41,043
Provision for depreciation 50,827 54,319
Net (gain) loss on sale of operating property (4,227) 1,653
Compensation and other expense related to the acquisition
by Yellow 24,337 --
----------- -----------
Total operating expenses 2,204,213 1,900,103
----------- -----------
Operating income from continuing operations 42,979 36,563
Other (expense), net (19,117) (20,297)
----------- -----------
Income from continuing operations before income taxes 23,862 16,266
Provision for income taxes 12,790 7,047
----------- -----------
Income from continuing operations 11,072 9,219
(Loss) Income from discontinued operations (155) 1,642
----------- -----------
Net income $ 10,917 $ 10,861
=========== ===========
Earnings (loss) per share - basic:
Continuing operations $ 0.58 $ 0.50
Discontinued operations (0.01) 0.09
----------- -----------
Total earnings per share - basic $ 0.57 $ 0.59
Earnings (loss) per share - diluted:
Continuing operations $ 0.58 $ 0.48
Discontinued operations (0.01) 0.09
----------- -----------
Total earnings per share - diluted $ 0.57 $ 0.57
Average shares outstanding - basic 19,018 18,502
Average shares outstanding - diluted 19,038 18,982
Operating ratio 98.1% 98.1%
Profit margin from continuing operations 0.5% 0.5%
-more-
ROADWAY CORPORATION PAGE 4
THIRD QUARTER 2003
CONDENSED CONSOLIDATED BALANCE SHEETS
ROADWAY CORPORATION AND SUBSIDIARIES
September 13, 2003 December 31, 2002
------------------ -----------------
(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 132,894 $ 106,929
Other current assets 290,100 356,143
---------- ----------
Total current assets 422,994 463,072
Net carrier operating property 491,344 509,183
Goodwill, net 285,874 283,910
Deferred income taxes 37,015 39,941
Other assets 46,186 39,767
---------- ----------
Total assets $1,283,413 $1,335,873
========== ==========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 187,924 $ 193,501
Other current liabilities 184,814 267,389
---------- ----------
Total current liabilities 372,738 460,890
Long-term liabilities 218,166 213,601
Long-term debt 248,924 273,513
Shareholders' equity 443,585 387,869
---------- ----------
Total liabilities and equity $1,283,413 $1,335,873
========== ==========
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
ROADWAY CORPORATION AND SUBSIDIARIES
Thirty-six Weeks Ended
(Three Quarters)
September 13, 2003 September 7, 2002
------------------ -----------------
(in thousands)
Cash flows from operating activities:
Income from continuing operations $ 11,072 $ 9,219
Adjustments 43,176 34,911
--------- ---------
Net cash provided by continuing operating activities 54,248 44,130
Net cash provided (used) by investing activities 19,519 (69,120)
Net cash (used) by financing activities (48,068) (15,920)
Effect of exchange rate changes on cash 305 (200)
--------- ---------
Net increase (decrease) in cash and cash equivalents from
continuing operations 26,004 (41,110)
Net (decrease) in cash and cash equivalents from discontinued
operations (39) (4,080)
--------- ---------
Cash and cash equivalents at beginning of period 106,929 110,432
--------- ---------
Cash and cash equivalents at end of period $ 132,894 $ 65,242
========= =========
-more-
ROADWAY CORPORATION PAGE 5
THIRD QUARTER 2003
REPORTABLE SEGMENTS AND RELATED OPERATING DATA
Twelve Weeks Ended September 13, 2003
# of working days - 58 (Third Quarter 2003)
(Dollars in thousands,
except per ton data) Roadway Express New Penn Segment Total
--------------- -------- -------------
Revenue $ 700,668 $ 50,926 $751,594
Salaries, wages & benefits 441,446 33,412 474,858
Operating supplies 117,826 7,247 125,073
Purchased transportation 76,729 517 77,246
Other operating expense 40,736 4,157 44,893
Acquisition expenses 23,374 963 24,337
---------- -------- --------
Operating expense 700,111 46,296 746,407
---------- -------- --------
Operating income $ 557 $ 4,630 $ 5,187
========== ======== ========
Operating ratio 99.9% 90.9% 99.3%
LTL tons 1,458,899 190,771
Truckload tons 306,635 29,052
---------- --------
Total tons 1,765,534 219,823
LTL shipments 3,027,865 430,019
Truckload shipments 37,826 3,601
---------- --------
Total shipments 3,065,691 433,620
Revenue per LTL ton $ 441.31 $ 250.86
Revenue per truckload ton $ 171.07 $ 105.62
Revenue per ton $ 396.86 $ 231.67
Expense per ton $ 396.54 $ 210.61
Twelve Weeks Ended September 7, 2002
# of working days - 58 (Third Quarter 2002)
(Dollars in thousands,
except per ton data) Roadway Express New Penn Segment Total
--------------- -------- -------------
Revenue $ 631,158 $ 50,538 $681,696
Salaries, wages & benefits 402,918 33,171 436,089
Operating supplies 104,540 5,929 110,469
Purchased transportation 63,318 532 63,850
Other operating expense 48,636 4,602 53,238
---------- -------- --------
Operating expense 619,412 44,234 663,646
---------- -------- --------
Operating income $ 11,746 $ 6,304 $ 18,050
========== ======== ========
Operating ratio 98.1% 87.5% 97.4%
LTL tons 1,347,193 195,791
Truckload tons 312,130 29,651
---------- --------
Total tons 1,659,323 225,442
LTL shipments 2,810,263 432,803
Truckload shipments 37,585 3,653
---------- --------
Total shipments 2,847,848 436,456
Revenue per LTL ton $ 432.20 $ 242.01
Revenue per truckload ton $ 156.68 $ 106.36
Revenue per ton $ 380.37 $ 224.17
Expense per ton $ 373.29 $ 196.21
-more-
ROADWAY CORPORATION PAGE 6
THIRD QUARTER 2003
REPORTABLE SEGMENTS AND RELATED OPERATING DATA
Thirty-six Weeks Ended September 13, 2003
# of working days - 179 (Three Quarters 2003)
(Dollars in thousands,
except per ton data) Roadway Express New Penn Segment Total
--------------- ---------- -------------
Revenue $2,097,068 $ 150,124 $2,247,192
Salaries, wages & benefits 1,313,985 99,512 1,413,497
Operating supplies 369,386 22,158 391,544
Purchased transportation 226,247 1,508 227,755
Other operating expense 133,968 13,112 147,080
Acquisition expenses 23,374 963 24,337
---------- ---------- ----------
Operating expense 2,066,960 137,253 2,204,213
---------- ---------- ----------
Operating income $ 30,108 $ 12,871 $ 42,979
========== ========== ==========
Operating ratio 98.6% 91.4% 98.1%
LTL tons 4,384,783 566,921
Truckload tons 910,013 86,723
---------- ----------
Total tons 5,294,796 653,644
LTL shipments 9,223,684 1,283,363
Truckload shipments 112,445 10,639
---------- ----------
Total shipments 9,336,129 1,294,002
Revenue per LTL ton $ 443.52 $ 248.45
Revenue per truckload ton $ 167.41 $ 106.92
Revenue per ton $ 396.06 $ 229.67
Expense per ton $ 390.38 $ 209.98
Thirty-six Weeks Ended September 7, 2002
# of working days - 175 (Three Quarters 2002)
(Dollars in thousands,
except per ton data) Roadway Express New Penn Segment Total
--------------- ---------- -------------
Revenue $1,791,125 $ 145,541 $1,936,666
Salaries, wages & benefits 1,161,888 96,602 1,258,490
Operating supplies 303,527 17,980 321,507
Purchased transportation 171,761 1,373 173,134
Other operating expense 132,553 14,419 146,972
---------- ---------- ----------
Operating expense 1,769,729 130,374 1,900,103
---------- ---------- ----------
Operating income $ 21,396 $ 15,167 $ 36,563
========== ========== ==========
Operating ratio 98.8% 89.6% 98.1%
LTL tons 3,866,001 566,946
Truckload tons 862,135 81,499
---------- ----------
Total tons 4,728,136 648,445
LTL shipments 8,151,571 1,256,504
Truckload shipments 104,486 10,136
---------- ----------
Total shipments 8,256,057 1,266,640
Revenue per LTL ton $ 428.85 $ 241.43
Revenue per truckload ton $ 154.49 $ 106.28
Revenue per ton $ 378.82 $ 224.45
Expense per ton $ 374.30 $ 201.05
-more-
ROADWAY CORPORATION PAGE 7
THIRD QUARTER 2003
The following tables show the charges related to the pending acquisition of
Roadway Corporation by Yellow Corporation, and their impact on operating income,
operating ratio, income taxes, and earnings per share. These charges resulted
primarily from the vesting of restricted stock awards, other compensation
expense and transaction costs. The Company's effective tax rate has shifted from
42.0% to 53.6% as a result of these acquisition-related costs.
Twelve Weeks Ended September 13, 2003
(Third quarter)
Acquisition
As reported Charges Pro forma
----------- ------------ ---------
Roadway Corporation
Revenue $ 751,594 $ -- $ 751,594
Operating expenses 746,407 (24,337) 722,070
--------- -------- ---------
Operating Income 5,187 24,337 29,524
Other (expense), net (6,279) -- (6,279)
--------- -------- ---------
Pretax (loss) income (1,092) 24,337 23,245
Income tax expense 2,309 7,454 9,763
--------- -------- ---------
Net (loss) income $ (3,401) $ 16,883 $ 13,482
========= ======== =========
(Loss) earnings per share
(diluted) $ (0.18) $ 0.89 $ 0.71
Operating ratio 99.3% 96.1%
Roadway Express
Revenue $ 700,668 $ -- $ 700,668
Operating expenses 700,111 (23,374) 676,737
--------- -------- ---------
Operating income $ 557 $ 23,374 $ 23,931
========= ======== =========
Operating ratio 99.9% 96.6%
New Penn
Revenue $ 50,926 $ -- $ $50,926
Operating expenses 46,296 (963) 45,333
--------- -------- ---------
Operating income $ 4,630 $ 963 $ 5,593
========= ======== =========
Operating ratio 90.9% 89.0%
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ROADWAY CORPORATION PAGE 8
THIRD QUARTER 2003
Thirty-six Weeks Ended September 13, 2003
(Three Quarters)
Acquisition
As reported Charges Pro forma
----------- ------------ -----------
Roadway Corporation
Revenue $ 2,247,192 $ -- $ 2,247,192
Operating expenses 2,204,213 (24,337) 2,179,876
----------- -------- -----------
Operating income 42,979 24,337 67,316
Other (expense), net (19,117) -- (19,117)
----------- -------- -----------
Pretax income 23,862 24,337 48,199
Income tax expense 12,790 7,454 20,244
----------- -------- -----------
Operating income from
continuing operations 11,072 16,883 27,955
Discontinued operations (155) -- (155)
----------- -------- -----------
Net income $ 10,917 $ 16,883 $ 27,800
=========== ======== ===========
Earnings per share (diluted) $ 0.57 $ 0.89 $ 1.46
Operating ratio 98.1% 97.0%
Roadway Express
Revenue $ 2,097,068 $ -- $ 2,097,068
Operating expenses 2,066,960 (23,374) 2,043,586
----------- -------- -----------
Operating income $ 30,108 $ 23,374 $ 53,482
=========== ======== ===========
Operating ratio 98.6% 97.4%
New Penn
Revenue $ 150,124 $ -- $ 150,124
Operating expenses 137,253 (963) 136,290
----------- -------- -----------
Operating income $ 12,871 $ 963 $ 13,834
=========== ======== ===========
Operating ratio 91.4% 90.8%
-more-
ROADWAY CORPORATION PAGE 9
THIRD QUARTER 2003
Roadway Corporation operates with 12 weeks in each of the first three quarters
and 16 weeks in the fourth quarter.
A conference call discussing this quarter's performance with securities analysts
will be simulcast live on the Company's Web site at www.roadwaycorp.com
beginning at 11:00 a.m. (Eastern time) on Tuesday, September 30, 2003. The call
will remain available for the next three weeks.
Note: This release contains, and other statements that we may make may contain,
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act with respect to the outlook for expectations for revenue,
earnings or other future financial or business performance, strategies,
expectations and goals. All statements that are not historical statements of
fact are "forward-looking statements" and are subject to numerous risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in the forward-looking statements. Forward-looking
statements include all comments relating to our beliefs and expectations as to
future events and trends affecting our business, results of operations and
financial condition. We intend for the words "believes," "anticipates,"
"expects," "intends," "plans," "continues," "projects," and similar expressions
to identify forward-looking statements. The risks and uncertainties include,
among others, variable factors such as capacity and rate levels in the motor
freight industry; fuel prices; the impact of competition; the state of the
national economy; the success of our operating plans, including our ability to
manage growth and control costs; labor relations matters; uncertainties
concerning the impact terrorist activities may have on the economy and the motor
freight industry; and the timely completion of Yellow Corporation's plan to
acquire Roadway Corporation and its subsidiaries. We have based these
forward-looking statements on management's analysis about future events only as
of the date of this press release. We undertake no obligation to publicly revise
these forward-looking statements to reflect events or circumstances that arise
after the date of this press release. These forward-looking statements are
subject to risks, uncertainties and assumptions about us and our subsidiaries.
In addition to the disclosure contained in this document, you should carefully
review the risks and uncertainties contained in other documents Roadway
Corporation files from time to time with the Securities and Exchange Commission.
Those documents are accessible on the SEC's Web site at www.sec.gov and through
our Web site at www.roadwaycorp.com.
Included in the Dow Jones Transportation Average, ROADWAY CORPORATION (NASDAQ:
ROAD) is a holding company dedicated to leveraging opportunities to expand the
transportation-related service offerings available to customers through the
Roadway portfolio of strategically linked transportation companies. Roadway
Corporation's principal subsidiaries include ROADWAY EXPRESS and ROADWAY NEXT
DAY CORPORATION. Roadway Express is a leading ISO 9001 and C-TPAT/PIP and FAST
certified transporter of industrial, commercial and retail goods in the two- to
five-day regional and long-haul markets. Roadway Express provides seamless
service throughout all 50 states, Canada, Mexico and Puerto Rico including
export/import services for more than 100 countries worldwide. Roadway Express
owns REIMER EXPRESS LINES in Canada and Mexican-based ROADWAY EXPRESS, S.A. DE
C.V. Roadway Next Day Corporation is a holding company focused on business
opportunities in the shorter-haul regional and next-day markets. Roadway Next
Day Corporation owns NEW PENN MOTOR EXPRESS, a next-day, ground
less-than-truckload carrier of general commodities serving twelve states in the
Northeastern United States, Quebec, Canada and Puerto Rico, with links to the
Midwest and Southeast United States and Ontario, Canada. For additional
information, contact Roadway Corporation at www.roadwaycorp.com.
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