Exhibit 99.2
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Roadway Next Day Corporation
Quarters ended September 13, 2003 and September 7, 2002
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Roadway Next Day Corporation
Condensed Consolidated Balance Sheets (Unaudited)
September 13, 2003 December 31, 2002
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(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 13,254 $ 12,992
Accounts receivable, net 21,315 24,785
Assets of discontinued operation - 87,431
Other current assets 6,934 6,618
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Total current assets 41,503 131,826
Carrier operating property, at cost 101,740 100,854
Less allowance for depreciation 17,308 10,240
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Net carrier operating property 84,432 90,614
Goodwill, net 269,093 269,093
Other assets 20,214 22,511
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Total assets $415,242 $514,044
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Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 13,560 $ 14,209
Salaries and wages 8,733 8,522
Payable to Roadway Corporation 8,076 33,703
Liabilities of discontinued operation - 32,407
Other current liabilities 5,926 4,209
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Total current liabilities 36,295 93,050
Long-term liabilities:
Casualty claims and other 9,954 8,456
Deferred income taxes 10,393 10,666
Payable to Roadway Corporation 248,924 273,513
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Total long-term liabilities 269,271 292,635
Parent company investment 109,676 128,359
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Total liabilities and shareholders' equity $415,242 $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.
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Roadway Next Day Corporation
Condensed Statements of Consolidated Income (Unaudited)
Twelve Weeks Ended
(Third Quarter)
September 13, 2003 September 7, 2002
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(in thousands)
Revenue $ 50,926 $ 50,538
Operating expenses:
Salaries, wages and benefits 33,987 33,780
Operating supplies and expenses 6,458 4,971
Purchased transportation 517 532
Operating taxes and licenses 1,407 1,438
Insurance and claims 555 995
Provision for depreciation 2,407 2,572
Loss (gain) on sale of property 2 (54)
Compensation and other expense related to the Yellow
acquisition 963 -
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Total operating expenses 46,296 44,234
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Operating income from continuing operations 4,630 6,304
Other (expense), net (5,632) (5,966)
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(Loss) income from continuing operations before income taxes (1,002) 338
Income tax expense (benefit) (469) 106
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(Loss) income from continuing operations (533) 232
(Loss) income from discontinued operations - 480
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Net (loss) income $ (533) $ 712
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Roadway Next Day Corporation
Condensed Statements of Consolidated Income (Unaudited)
Thirty-six Weeks Ended
(Three Quarters)
September 13, 2003 September 7, 2002
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(in thousands)
Revenue $ 150,124 $ 145,541
Operating expenses:
Salaries, wages and benefits 101,271 98,427
Operating supplies and expenses 19,395 15,154
Purchased transportation 1,508 1,373
Operating taxes and licenses 4,260 4,216
Insurance and claims 2,615 3,202
Provision for depreciation 7,180 8,127
Loss (gain) on sale of property 61 (125)
Compensation and other expense related to the Yellow acquisition 963 -
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Total operating expenses 137,253 130,374
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Operating income from continuing operations 12,871 15,167
Other (expense), net (17,685) (17,776)
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(Loss) from continuing operations before income taxes (4,814) (2,609)
Income tax (benefit) (1,796) (1,040)
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(Loss) from continuing operations (3,018) (1,569)
(Loss) income from discontinued operations (155) 1,641
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Net (loss) income $ (3,173) $ 72
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See notes to condensed consolidated financial statements.
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Roadway Next Day Corporation
Condensed Statements of Consolidated Cash Flows (Unaudited)
Thirty-six Weeks Ended
(Three Quarters)
September 13, 2003 September 7, 2002
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(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) from continuing operations $ (3,018) $ (1,570)
Depreciation and amortization 9,580 9,372
Other operating adjustments 5,098 32,398
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Net cash provided by operating activities 11,660 40,200
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of carrier operating property (1,578) (6,931)
Sales of carrier operating property 518 125
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Net cash (used) by investing activities (1,060) (6,806)
CASH FLOWS FROM FINANCING ACTIVITIES
Transfer to parent (10,300) (42,086)
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Net cash (used) by financing activities (10,300) (42,086)
Net increase (decrease) in cash and cash equivalents from
continuing operations 300 (8,692)
Net (decrease) in cash and cash equivalents from
discontinued operations (38) (4,081)
Cash and cash equivalents at beginning of period 12,992 29,469
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Cash and cash equivalents at end of period $ 13,254 $ 16,696
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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 Thirty-six weeks ending
September 13, 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, consisting of $47
million in cash and an $8 million note. 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 recognized a $150,000 gain 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 three quarters ended September 13, 2003 and September 7, 2002. The three
quarters ended September 13, 2003 includes results of operations only through
the disposal date, January 23, 2003.
Twelve Weeks Ended Thirty-six Weeks Ended
(Third Quarter) (Three Quarters)
Sept 13, 2003 Sept 7, 2002 Sept 13, 2003 Sept 7, 2002
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(in thousands)
Revenue $ - $ 39,613 $ 9,267 $118,961
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Pre-tax income from discontinued operations - 797 (263) 2,722
Income tax (benefit) expense - 317 (108) 1,080
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(Loss) income from discontinued operations $ - $ 480 $ (155) $ 1,642
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