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Exhibit 99
INVESTOR CONTACT: Investor Relations
(330) 665-8814
MEDIA CONTACT: David Edmonds
(330) 665-8847
FOR IMMEDIATE RELEASE
OCTOBER 7, 1997
CALIBER SYSTEM REPORTS STRONG THIRD QUARTER RESULTS
OPERATING INCOME AT RPS UP 52%
AKRON, OHIO - Caliber System, Inc. (NYSE: CBB) today reported net
earnings from its ongoing businesses for the third quarter ended September 13,
1997, of $35.3 million or $.90 per share. These earnings exclude $4.3 million of
transition costs attributable to operating losses at the former Central Freight
Lines and other non-recurring costs related to the closing of the former Coles
and Spartan Divisions of Viking Freight. Including the transition costs, the
Company's net income for the quarter was $32.4 million or $.83 per share,
compared to a net loss of $1.97 million or $.05 per share for the third quarter
of 1996.
Combined revenue for RPS, Caliber Logistics and Roberts Express
increased 26% for the quarter, from $399.4 million in 1996 to $503.1 million in
1997. Third quarter 1997 revenue from Viking's ongoing operations in the West
amounted to $84.4 million. Caliber's total revenue decreased from $627.2 million
in the third quarter last year to $592.5 million in 1997 as a result of the
Viking restructuring announced on March 27, 1997. RPS, Viking Freight and
Roberts Express were positively impacted by the 12-day work stoppage at United
Parcel Service (UPS).
"We are pleased with our results," said Daniel J. Sullivan, Chairman,
President and CEO of Caliber System. "These third quarter earnings, our best
performance since the company was formed in 1996, represent continuing
improvement over our first half numbers. We have realized significant increases
in profits, operating margins and revenue from our ongoing operations." Sullivan
added that the company has reduced its debt by half, from $430 million on
January 1 to approximately $213 million at the close of the third quarter.
For the first three quarters of 1997, net income from ongoing
operations was $66.8 million or $1.70 per share. First quarter restructuring
costs for Viking of $1.43 per share, discussed in Caliber's first quarter
earnings release, and transition expenses of $.35 per share reduced year-to-date
earnings per share to a loss of $.08, compared to earnings of $.20 per share for
the first three quarters of 1996. Revenues from ongoing operations of $1.75
billion for the first three quarters are slightly below the $1.83 billion
realized a year ago because of the restructuring.
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Third Quarter Results
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RPS's Year-Over-Year Operating Income Rises by 52%
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Operating income at RPS for the quarter rose 52% to $44.8 million from
$29.5 million for the same period in 1996. Revenue was $388.4 million, up 28%
from $304.3 million a year ago as RPS continued its trend of double-digit
growth.
Daily package volume topped 1.5 million during the UPS work stoppage,
compared to pre-strike levels of approximately 1.2 million.
"RPS's terminal network is still operating near capacity in the
aftermath of the new UPS labor agreement, and we expect that to be the case at
least through the end of the year," said Sullivan. "We have maintained package
quotas for our customers so that we can continue to preserve our on-time service
record throughout the traditional peak season."
Sullivan added that RPS's first priority remains servicing existing
customers and that the carrier will add new customers only as capacity allows.
The 12-day impact of the UPS strike amounted to approximately $21
million in revenue and $6 million of operating income. Our analysis indicates
that RPS has retained more than 15% of the incremental business enjoyed during
the work stoppage.
Viking's Ongoing Operations Show Significant Improvement
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Viking's ongoing operations earned an operating profit of $5.8 million
in the third quarter, compared to $1.4 million posted in the second quarter. In
1996, Viking reported third quarter operating losses of $38.2 million.
"Viking is outperforming our post-restructuring expectations," stated
Sullivan. "Both our yields and operating ratio are steadily improving as volume
continues to grow, and on-time service is consistently exceeding 98%."
Caliber Logistics and Roberts Express Record Strong Performances
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Caliber Logistics experienced a 32% increase in gross revenue and a
27% gain in net revenue and also improved its operating income over the same
quarter last year. Critical-shipment carrier Roberts Express recorded
year-over-year revenue and operating income growth of 14% and 30%, respectively,
while continuing to post a strong operating ratio.
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Third Quarter Results
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Consolidated Results
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Unaudited revenue and earnings for the third quarter of 1997 and year
to date, with comparable figures for 1996, are as follows:
Third Quarter Year to Date
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Sept. 13, 1997 Sept. 7, 1996 Sept. 13, 1997 Sept. 7, 1996
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(dollars in thousands, except per share data)
Revenue:
RPS $ 388,399 $ 304,253 $ 1,066,249 $ 894,404
Viking 84,379 227,864 366,869 665,429
Other 114,231 95,109 319,891 265,368
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587,009 627,226 1,753,009 1,825,201
Transition Revenue 5,479 -- 55,351 --
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Net Revenue 592,488 627,226 1,808,360 1,825,201
Operating Expenses 534,066 627,002 1,796,452 1,805,382
----------- ----------- ----------- -----------
Operating Income (Loss):
RPS 44,821 29,447 115,869 85,382
Viking 5,841 (38,217) (25,817) (85,458)
Other 12,065 8,994 27,297 19,895
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62,727 224 117,349 19,819
Transition Operating Loss (4,305) -- (20,441) --
Restructuring Charge -- -- (85,000) --
----------- ----------- ----------- -----------
Operating Income 58,422 224 11,908 19,819
Other Expense, Net (3,039) (2,965) (5,567) (5,567)
----------- ----------- ----------- -----------
Income (Loss) Before Income Taxes 55,383 (2,741) 6,341 14,252
Provision (Benefit) For Income Taxes 22,934 (771) 9,531 6,381
----------- ----------- ----------- -----------
Net Income (Loss) $ 32,449 $ (1,970) $ (3,190) $ 7,871
=========== =========== =========== ===========
Earnings (Loss) Per Share $ 0.83 $ (0.05) $ (0.08) $ 0.20
=========== =========== =========== ===========
Average Shares Outstanding 39,207 39,505 39,221 39,512
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<FN>
Note: The gain on the sale of investments decreased other expense, net by
$7.6 million or $.12 per share year to date. The Company operates in 13
four-week periods. Each of the first three quarters contain 12 weeks and
the fourth quarter contains 16 weeks.
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Third Quarter Results
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Caliber System is a leading provider of value-added transportation,
logistics and related information services. Its operating companies include RPS,
a business-to-business small-package carrier; Viking Freight, a supplier of
regional freight service in the West; Caliber Logistics, a contract logistics
provider; Roberts Express, a critical-shipment carrier; and Caliber Technology,
a producer of systemwide information services.
As announced on October 6, 1997, Caliber System has entered into a
definitive agreement with Federal Express Corporation. FDX Corporation, a new
holding company to be formed as part of the transaction, will acquire Caliber
and its operating units. The transaction, which is subject to approval by the
shareholders of both companies and other customary conditions, is expected to
close in early 1998.
This release contains forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially. These risks and uncertainties are detailed from time to time in
reports filed by the Company with the Securities and Exchange Commission,
including Forms 8-K, 10-Q and 10-K.
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