Exhibit 99.1
OVERNITE REPORTS RECORD REVENUE FOR 2003
Richmond, VA, January 29, 2004 - Overnite Corporation (NASDAQ: OVNT)
today reported financial results for the fourth quarter and year ended December
31, 2003. Results are shown both as reported on a generally accepted accounting
principles basis (GAAP) and on a pro forma basis (a non-GAAP measure defined
below) which removes certain non-recurring costs associated with Union Pacific
Corporation's (UPC) divestiture of Overnite and adds the incremental costs
associated with Overnite becoming an independent company.
Fourth Quarter
- --------------
Operating revenue for the quarter was $378.1 million, an increase of
$26.9 million, or 7.7%, from $351.2 million in the fourth quarter of 2002.
Net income was $3.1 million in the fourth quarter of 2003. Pro forma
net income for the fourth quarter of 2003 was $10.5 million, an increase of
20.8%, compared to pro forma net income of $8.7 million for the fourth quarter
of 2002. Pro forma fourth quarter diluted earnings per share were $0.38 per
share.
Pro forma operating income for the fourth quarter 2003 was $18.8
million, an increase of 22.8%, as compared to pro forma operating income of
$15.3 million in the fourth quarter of 2002. Operating income for the fourth
quarter of 2003 was $4.9 million compared to $16.7 million for the comparable
period of 2002.
The Corporation's operating ratio (total operating expenses divided by
operating revenue) on a pro forma basis was 95.0% in the fourth quarter of 2003
compared to 95.6% for the fourth quarter of 2002. The operating ratio was 98.7%
for the fourth quarter of 2003, compared to 95.2% for the fourth quarter of
2002.
"We had a good fourth quarter to cap off a positive year. Revenue for
the quarter increased 7.7% as our LTL tonnage benefited from continued
strengthening in the economy. With our continuing focus on productivity and cost
controls, and record revenue, we improved operating income by 22.8% on a pro
forma basis," said Leo Suggs, Chairman, Chief Executive Officer and President of
Overnite Corporation.
Year End
- --------
Operating revenue for the year was $1.476 billion, an increase of
$123.7 million, or 9.1%, from $1.352 billion in the year of 2002.
Net income for the year was $46.9 million. Pro forma net income for the
year of 2003 was $41.3 million, or $1.49 per diluted share, an increase of $6.3
million, or 17.9%, as compared to pro forma net income of $35.0 million for the
year of 2002. Pro forma net income for 2002 also excluded the one-time tax
benefit of $33.7 million as a result of the resolution of issues that permitted
a portion of UPC's 1986 Overnite acquisition costs to become tax deductible,
resulting in a decrease in the Corporation's income tax expense.
Pro forma operating income for the year of 2003 was $74.3 million, an
increase of 18.4%, as compared to pro forma operating income of $62.7 million in
the year of 2002. Operating income for the year 2003 was $67.4 million.
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The Corporation's operating ratio on a pro forma basis was 95.0% for
the year of 2003 compared to 95.4% for the year of 2002. The operating ratio was
95.4% for the year of 2003.
Business Outlook
- ----------------
The Corporation expects to continue to incur incremental operating
expenses as the organization develops as a stand-alone entity. The Corporation
anticipates that the full incremental stand-alone costs will be approximately
$8.3 million on an annual basis. Including these assumed incremental costs, the
Corporation anticipates first quarter 2004 earnings per diluted share to be
between $0.19 and $0.24, and earnings per diluted share for the full year of
2004 to be between $1.58 and $1.68. For 2004, the Corporation plans to invest
between $75 million and $85 million in capital expenditures.
"Our fourth quarter results were better than expected. The stronger
economic growth that began in the third quarter continued, albeit at a more
modest pace, in the fourth quarter. The Company benefited from this growth and
expects to continue benefiting from improvements in the economy in 2004," said
Mr. Suggs.
Pro Forma Results
- -----------------
Overnite Corporation became a stand-alone company on November 5, 2003,
as a result of a divestiture by UPC. Pro forma results have been provided to
present results as if the Corporation were a public entity for the entire fourth
quarter and 12 months of 2002 and 2003.
The Corporation has included pro forma net income, pro forma operating
income and pro forma operating ratio, including applicable pro forma earnings
per share amounts for 2003 and 2002. These pro forma financial measures are
alternatives to measures determined in accordance with GAAP. They should not be
considered in isolation or as an alternative to measures determined in
accordance with GAAP. Set forth below is a reconciliation of these pro forma
non-GAAP financial measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP.
The Corporation has included these non-GAAP financial measures to
reflect the operations and financial performance of the Corporation as an
independent, stand-alone entity. Management believes that these non-GAAP
financial measures are more reflective of the Corporation's continuing
operations as they present investors with information about the impact of the
divestiture from UPC and the IPO on the Corporation's operations and, in doing
so, improve transparency to investors and enhance period-to-period comparability
of operations and financial performance.
Pro forma operating income for the fourth quarter and full-year periods
excludes the effects of $14.1 million in non-recurring expenses related to the
vesting of awards granted under UPC compensation plans and the IPO-related grant
of shares of the Corporation's stock to employees, and includes the estimated
effects of the incremental stand-alone operating expenses, as shown below. For
the fourth quarter, the effects are calculated as of October 1 of the respective
period. For the full year, the effects are calculated as of January 1 of the
respective year.
Pro forma net income for the fourth quarter of 2003 excludes the
estimated after-tax effects of $1.4 million of intercompany interest income
previously received from UPC, as well as the after-tax effects of the $14.1
million non-recurring expenses. This measure also includes the after-tax effects
of the incremental stand-alone operating expenses and includes the after-tax
impact of interest expense as if the divestiture had occurred on October 1,
2003. Pro forma net income for the fourth quarter of 2002 includes the estimated
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after-tax effect of the stand-alone operating expenses, the after-tax impact of
interest expense and the after-tax elimination of intercompany income as if the
divestiture had occurred on October 1, 2002. A reconciliation of the most
comparable measures reported in accordance with GAAP to these pro forma measures
is as follows:
Three Months Three Months Twelve Months Twelve Months
Ended Ended Ended December Ended
31, 2003 December 31,
(amounts in thousands, except share, per December 31, December 31, 2002
share and operating ratio data) 2003 2002
- --------------------------------------------- --------------- ---------------- ---------------- ---------------
Operating income as reported $ 4,929 $16,693 $ 67,352 $71,046
Add: pre-tax non-recurring expenses for UPC
compensation plans, IPO-related stock grant
and other 14,146 - 14,146 -
Less: pro forma calculation of three months
and twelve months of stand-alone expenses 322 1,417 7,238 8,333
--------------- ---------------- ---------------- ---------------
Pro forma operating income $ 18,753 $ 15,276 $ 74,260 $62,713
=============== ================ ================ ===============
Pro forma operating ratio 95.0% 95.6% 95.0% 95.4%
- --------------------------------------------- --------------- ---------------- ---------------- ---------------
Net Income as reported $ 3,110 $ 13,097 $ 46,859 $88,789
Add: after-tax non-recurring expenses for
UPC compensation plans, IPO-related stock
grant and other 8,629 - 8,629 -
Less: pro forma calculation of three months
and twelve months of stand-alone expenses 196 861 4,340 5,080
Less: elimination of intercompany interest
income 847 2,862 7,442 11,614
Less: pro forma calculation of three months
and twelve months of interest expense 219 701 2,394 3,363
Less: one-time tax benefit from settlement
with IRS - - - 33,700
--------------- ---------------- ---------------- ---------------
Pro forma net income $ 10,477 $ 8,673 $ 41,312 $35,032
=============== ================ ================ ===============
Pro forma earnings per share:
Basic $ 0.38 $ 1.49
Diluted $ 0.38 $ 1.49
Pro forma shares outstanding:
Basic 27,760,690 27,760,690
Diluted 27,807,887 27,807,887
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All earnings per share calculations have been presented assuming all
basic and diluted shares were outstanding as of January 1, 2003. Earnings per
share on a GAAP basis have not been presented as the calculation would not be
meaningful.
Investor Conference Call and Web Simulcast
- ------------------------------------------
The Corporation will conduct a conference call on Friday, January 30,
2004, at 8:30 a.m. Eastern Standard Time to discuss the fourth quarter and
annual results of 2003, guidance for 2004 and other developments. The number to
call for this teleconference is (800) 901-5231 and (617)786-2961 for
international calls. The passcode will be 62221717.
The call also will be webcast live via the Corporation's Web site at
www.ovnt.com and will be archived there for future playback. The webcast is also
being distributed through CCBN's individual investor center at
www.companyboardroom.com or by visiting any of the investor sites in CCBN's
Individual Investor Network. Institutional investors can access the call via
CCBN's password-protected event management site, StreetEvents
(www.streetevents.com).
Supplemental financial information is attached, including a separate
table that reconciles the Consolidated Condensed Statements of Income for the
three months ended December 31, 2003 and 2002 to the pro forma amounts.
Additional information is available at our Web site: www.ovnt.com.
Overnite's contact for investors is Paul Hoelting, (804) 231-8455. Overnite's
media contact is Ira Rosenfeld, (804) 291-5362.
Overnite Corporation is one of America's leading less-than-truckload
transportation companies. Its principal operating company, Overnite
Transportation Company operates in all 50 states, Canada, Puerto Rico, Guam, the
U.S. Virgin Islands and Mexico. Motor Cargo is a regional less-than-truckload
carrier primarily serving the western United States, Canada and Mexico.
Together, they form one of the largest less-than-truckload carriers in the
United States with 207 service centers and a fleet of over 6,000 tractors and
more than 22,000 trailers. The Corporation's Web site is www.ovnt.com.
**********
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
This press release contains "forward-looking statements" within the
meaning of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements include information
relating to future events, future financial performance, strategy, expectations,
competitive environment, regulation and availability of resources.
Forward-looking statements should not be read as a guarantee of future
performance or results. Forward-looking statements are based on information
available at the time and/or management's good faith belief with respect to
future events, and are subject to risks and uncertainties that could cause the
Corporation's actual performance or results to differ materially from those
expressed in the statements. Important factors that could cause such differences
include, but are not limited to: whether the Corporation is fully successful in
implementing its financial and operational initiatives; industry competition,
conditions, performance and consolidation; legislative and/or regulatory
developments; the effects of adverse general economic conditions, both within
the United States and globally; any adverse economic or operational
repercussions from recent terrorist activities, any government response thereto
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and any future terrorist activities, war or other armed conflicts; changes in
fuel prices; changes in labor costs; labor stoppages; the outcome of claims and
litigation; natural events such as severe weather, floods and earthquakes; and
other factors detailed from time to time in the reports that the Corporation
files with the Securities and Exchange Commission.
The Corporation assumes no obligation to update forward-looking
statements to reflect actual results, changes in assumptions or changes in other
factors affecting forward-looking information except to the extent required by
applicable securities laws.
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OVERNITE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
(Thousands of Dollars)
For the three months ended For the twelve ended
December 31, December 31,
------------------------------ ---------------------------------
2003 2002 2003 2002
---- ---- ---- ----
Operating Revenue $ 378,073 $ 351,162 $1,475,463 $ 1,351,788
Operating Expenses:
Salaries, wages and employee benefits 236,595 203,374 884,053 807,105
Supplies and expenses 33,354 28,963 124,887 101,985
Operating taxes 13,039 12,586 52,738 50,047
Claims and insurance 10,247 14,746 54,706 43,248
Rents and purchased transportation 44,554 41,010 157,513 145,274
Communication and utilities 5,034 5,190 20,937 20,696
Depreciation 14,382 14,697 57,169 58,526
Other 15,939 13,903 56,108 53,861
--------- --------- ---------- -----------
Total operating expenses 373,144 $ 334,469 1,408,111 1,280,742
--------- --------- ---------- -----------
Operating Income 4,929 16,693 67,352 71,046
Other Income and Expense:
Interest income from parent 1,389 4,709 12,411 19,052
Interest expense 1,045 279 2,077 1,183
Other income 179 425 467 1,456
--------- --------- ---------- -----------
Income before Income Taxes 5,452 21,548 78,153 90,371
Income tax expense 2,342 8,451 31,294 1,582
--------- --------- ---------- -----------
Net Income $ 3,110 $ 13,097 $ 46,859 $ 88,789
========= ========= ========== ===========
Operating Ratio 98.7% 95.2% 95.4% 94.7%
Selected Operating Data:
Gross Weight hauled (millions of pounds):
LTL 2,337.6 2,176.2 9,172.1 8,693.2
Truckload 216.0 209.9 840.6 839.0
--------- --------- ---------- -----------
Total 2,553.6 2,386.1 10,012.7 9,532.2
========= ========= ========== ===========
Shipments (000's)
LTL 2,393.8 2,288.9 9,599.4 9,416.5
Truckload 15.9 16.5 62.3 65.8
Dedicated truckload 19.5 19.1 78.4 69.3
--------- --------- ---------- -----------
Total 2,429.2 2,324.5 9,740.1 9,551.6
========= ========= ========== ===========
LTL Weight per LTL shipment (pounds) 977 951 955 923
LTL revenue per LTL hundredweight,
(excluding fuel surcharge) $ 14.33 $ 14.43 $ 14.27 $ 14.01
OVERNITE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION (Unaudited)
(Thousands of Dollars)
As of December 31,
Assets 2003 2002
---- ----
Current Assets:
Cash and cash equivalents $ 11,068 $ 2,086
Accounts receivable 152,285 136,340
Advances to parent - 163,173
Other current assets 28,190 106,174
---------- ------------
Total current assets 191,543 407,773
Net properties 499,446 499,558
Total other assets 139,741 123,361
---------- ------------
Total assets $ 830,730 $ 1,030,692
========== ============
Liabilities and Common Shareholder's Equity
Current liabilities $ 201,846 $ 176,195
Non-current Liabilities:
Long term debt 115,500 -
Other non-current liabilities 132,316 223,416
---------- ------------
Total non-current liabilities 247,816 223,416
Common Shareholder's Equity 381,068 631,081
---------- ------------
Total liabilities and common shareholder's equity $ 830,730 $ 1,030,692
========== ============
OVERNITE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Thousands of Dollars)
for the twelve months ended December 31,
2003 2002
--------- --------
Cash provided by operating activities:
Net income 46,859 88,789
Depreciation 57,169 58,526
Change in current assets and liabilities 26,129 (31,207)
Other 9,675 (109,496)
--------- --------
Cash provided by operating activites 139,832 6,612
Cash used in investing activities:
Capital investment, net of sales proceeds (56,900) (56,617)
Purchase of Motor Cargo - (542)
--------- --------
Cash used in investing activities (56,900) (57,159)
Cash provided by (used in) financing activities:
Proceeds from debt 128,000 -
Dividends paid to parent (140,000) (16,000)
Advances to parent, net (58,882) 56,271
Cash overdraft (3,068) 3,023
--------- --------
Cash provided by (used in) financing activities (73,950) 43,294
Net Change in Cash: 8,982 (7,253)
Cash at beginning of year 2,086 9,339
--------- --------
Cash at end of year $ 11,068 $ 2,086
========= ========
OVERNITE CORPORATION
PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
(Thousands of Dollars)
For the three months ended December 31,2003
-------------------------------------------
Pro Forma
Actual Adjustments (a) Pro Forma
--------- --------------- ---------
Operating Revenue $ 378,073 $ - $ 378,073
--------- -------- ---------
Operating Expenses:
Salaries, wages and employee benefits 236,595 (14,039) (b) 222,556
Supplies and expenses 33,354 33,354
Operating taxes 13,039 13,039
Claims and insurance 10,247 181 (c) 10,428
Rents and purchased transportation 44,554 44,554
Communication and utilities 5,034 5,034
Depreciation 14,382 14,382
Other 15,939 34 (d) 15,973
--------- -------- ---------
Total operating expenses 373,144 (13,824) 359,320
Operating Income 4,929 13,824 18,753
Other Income and Expense:
Interest income from parent 1,389 (1,389) (e) -
Interest expense 1,045 359 (f) 1,404
Other income 179 - 179
---- -- ----
Income before Income Taxes 5,452 12,076 17,528
Income tax expense 2,342 4,709 7,051
--------- -------- ---------
Net Income $ 3,110 $ 7,367 $ 10,477
========= ======== =========
Operating Ratio 98.7% 95.0%
Net income per share:
Basic $ 0.11 (g) $ 0.38
Diluted $ 0.11 (g) $ 0.38
Weighted average number of shares
Outstanding :
Basic 27,760,690 (g) 27,760,690
Diluted 27,807,887 (g) 27,807,887
For the three months ended December 31, 2002
--------------------------------------------
Operating Revenue Pro Forma
Operating Expenses: Actual Adjustments (a) Pro Forma
Salaries, wages and employee benefits --------- --------------- ---------
Supplies and expenses
Operating taxes $ 351,162 $ - $ 351,162
Claims and insurance
Rents and purchased transportation 203,374 321 (b) 203,695
Communication and utilities 28,963 28,963
Depreciation 12,586 12,586
Other 14,746 545 (c) 15,291
41,010 41,010
Total operating expenses 5,190 5,190
14,697 14,697
Operating Income 13,903 551 (d) 14,454
--------- ------- ---------
Other Income and Expense: 334,469 1,417 335,886
Interest income from parent
Interest expense 16,693 (1,417) 15,276
Other income
Income before Income Taxes 4,709 (4,709) (e) -
Income tax expense 279 1,153 (f) 1,432
425 - 425
--------- ------- ---------
Net Income 21,548 (7,279) 14,269
8,451 (2,855) 5,596
--------- ------- ---------
$ 13,097 $ (4,424) $ 8,673
========= ========= ========
Operating Ratio 95.2% 95.6%
Notes:
(a) Overnite Corporation became a stand-alone company on November 5, 2003.
Pro forma adjustments are included and calculated to provide
information as if Overnite Corporation had been a stand-alone company
for the entire three months of the fourth quarter in both 2003 and
2002.
(b) Adjustment reflects $14,146,000 of non-recurring expenses related to
the vesting of awards granted under UPC compensation plans and the
IPO-related grant of shares of the Company's stock to employees and
$107,000 of salaries and wages in the fourth quarter of 2003. The
fourth quarter of 2002 includes $321,000 of salaries and wages
(c) Adjustment to reflect incremental costs for directors and officers
insurance coverage and various other insurance coverages.
(d) Adjustment to reflect incremental legal fees and other professional
fees
(e) Intercompany interest from parent was earned on a monthly basis in
periods prior to November 5, 2003. This intercompany interest is no
longer earned and will not be earned in future periods.
(f) Adjustment to reflect interest expense related to $115.5 million of
long term debt and $13.5 million of short term debt incurred as part
of the divestiture from UPC.
(g) All earnings per share calculations have been presented assuming all
basic and diluted shares were outstanding as of January 1, 2003.
Earnings per share, on a GAAP basis have not been presented as the
calculation would not be meaningful.