Fleet Financials
Improvement: despite a wobbly economy and skyrocketing fuel prices.
Patricia Smith
Senior Editor
First quarter 2003 was a rough one for most trucking companies. War and supply worries drove fuel prices to a 20-year high - and did it so quickly that fuel surcharges couldn't keep up. Weather idled equipment and terminals in many parts of the country. And a stalled economic recovery hampered the hoped for boost in freight.
Still, many companies managed to show profit and revenue gains from a year ago. Less-than-truckload carriers continue to see year-to-year gains from the shutdown of Consolidated Freightways last September. Consolidation in the truckload segment has meant growth for healthy fleets and, in many cases, higher truckload rates.
Arkansas Best
ABF Freight Systems, Arkansas Best's LTL subsidiary, had a first quarter operating ratio of 96.6%, compared to 98.1% a year ago. Operating income was $11.1 million versus $5.5 million. Revenues were $324.2 million versus $288.6 million. Revenue per hundredweight, with fuel surcharges, was $20.79 for the quarter, up 11.6% from a year ago. ABF LTL tonnage was up 2.7%. Average daily shipments moving in two-day transit time lanes rose 1.2% while the carrier's longer-haul business improved 9.4%.
The company estimates that it lost some $2 million in revenues due to delays and closures caused by bad weather. Arkansas Best President and CEO Robert Young III, said it's difficult to differentiate the impact of changes in the economy and the impact of freight from Consolidate Freightways, but "it does appear that the economy declined during the past few months."
Arkansas Best's Clipper intermodal marketing company had first quarter revenues of $28.5 million versus $25.9 million for first quarter 2002. Its operating ratio was 101.7% compared to 102.9%. In March, Arkansas Best sold its interest in Wingfoot Commercial Tire Systems to Goodyear for $71.3 million. The company said it will use the cash to reduce some $85 million in outstanding debt.
CNF
CNF Inc., Palo Alto, Calif., reported first quarter net income of $15.9 million, after one-time items, and $41 million operating income on revenues of $1.21 billion. This compares to $18.3 million net income and $40.4 million operating income on revenues of $1.07 billion for the same period a year ago.
Con-Way Transportation Services had operating income of $37.2 million, up 10% from first quarter 2002. First quarter 2003 results include an $8.7 million gain from the sale of excess property. Revenues were $519.1 million, up 14% from a year ago. Regional carrier tonnage per day was up 1%.
Menlo Worldwide had revenues of $687.1 million, up 12% from a year ago. Operating income was $3.6 million, up 7%.
Old Dominion
Old Dominion Freight Line posted first quarter operating revenues of $152.9 million, up 20.2% from first quarter 2002. Net income was $4.4 million, up 89.4%. The Thomasville, N.C.-based LTL carrier's operating ratio was 94.3% versus 96% a year earlier.
LTL shipments for the quarter were up 12.6%, tonnage was up 10.7%. Revenue per hundredweight was up 10.3% or 6.8%, excluding fuel surcharges. The company said the additional volume was primarily the result of the CF bankruptcy.
Soft business conditions due to economic uncertainty "have been evident in the persistent decline in LTL weight per LTL shipment for the last four quarters," noted Chairman and CEO Earl Congdon. "While we remain somewhat optimistic regarding prospects for a firming in the economic environment in the second half of 2003, conditions remain rather flat to date in the second quarter," he said.
Overnite
Overnite Holding reported first quarter operating income of $12.6 million on revenues of $341 million for Overnite Transportation and Motor Cargo Industries. This compares with $10.5 million on $308.8 million for first quarter 2002. Net income was $9.3 million versus $9 million a year ago. LTL tonnage was up 5.4%, due mainly to business from CF plus a late quarter improvement in the economy.
Roadway
Roadway posted an $8 million first quarter profit from continuing operations. Revenues were $754.1 million. For the same period a year ago Roadway had a $1.9 million loss on revenues of $599 million. Consolidated operating margin was 97.3% versus 99.4% in fourth quarter 2002.
Roadway Express revenues for the quarter were $705.2 million versus $553.6 million a year ago. Average daily tonnage was up 11.5%. Revenue per ton, net of fuel surcharge, was up 3.3%. Operating margin was 97.5% versus 99.9%.
New Penn Motor Express, Roadway's next-day LTL carrier, had revenues of $48.8 million, a 7.5% increase over first quarter 2002. Daily tonnage was about the same as last year, which the company said was due to continuing economic softness, a highly competitive northeast market, and severe weather that affected most of New Penn's primary service areas. Operating margin was 94.6% versus 92.7%.
SCS Transportation
Multi-regional LTL carrier SCS Transportation had first quarter combined revenues of $200.1 million, up 9% from first quarter 2002. Operating income was $4.5 million, down slightly from $4.9 million. Net income was $1.3 million, compared with $1.9 million.
Saia revenues totaled $123.6 million, up 7.5% from a year earlier. Excluding fuel surcharges, revenue was up 4.2%. Operating income was $4.3 million, up 18%. Its first quarter operating ratio was 96.5%, versus 96.8% a year ago. LTL revenue per hundredweight, excluding fuel charges, was $954, down slightly from a year ago. LTL tonnage was up 5.6%; truckload tonnage down 5.4%. LTL shipments were up 6.1%; truckload shipments up 1.9%.
Jevic revenues totaled $76.5 million, up 11.7% or 5.9% excluding fuel surcharges. Operating income was $1.1 million versus $1 million a year earlier. Operating ratio held at 98.6%. LTL revenue per hundredweight, excluding surcharges, was $9.18, up 2.2%. LTL tonnage was up 6.5%; truckload down 3%. LTL shipments were up 8.5%, truckload 1.3%.
Yellow Corp.
Yellow Transportation reported first quarter revenues of $660 million, up 16.9% from first quarter 2002, and operating income of $19.5 million, up from $6.7 million a year ago. Operating ratio was 97%, compared to 98.9% a year earlier.
LTL revenue per day was up 17%, LTL tonnage per day was up 9.2%, LTL revenue per hundredweight improved 7.1%. The company said higher first quarter volumes were due mainly to the addition of Consolidated Freightways business plus "continued penetration of premium services."
Meridian IQ, Yellow's global freight management service, had operating revenues of $22 million, up 43% from first quarter 2002, and a $900,000 operating loss versus a $1.5 million loss a year ago.
Yellow Corp. consolidated revenue was $681 million, up 17.7% from a year ago. Operating income was $11.8 million, versus $2.7 million first quarter last year.
Celadon Group
Celadon reported a $454,000 net profit for its third fiscal quarter ending March 31, up from $278,000 for the same period a year ago. Consolidated revenues for the quarter were $90.7 million, up 15.2% from third quarter 2002. Operating income was $1 million versus $2.2 million.
Revenues from trucking were $89.3 million versus $77 million a year earlier. Operating income was $1.8 million versus $1.9 million. Average revenue per loaded mile was $1.275, compared with $1.244 third quarter 2002. Deadhead mileage was 7.6% versus 8.2%. Operating ratio was 97.8% versus 97.2%. The company said its automotive business has been reduced significantly and replaced with consumer non-durables.
TruckersB2B operating income was $200,000 on revenues of $1.4 million, compared with $300,000 on $1.7 million a year ago. Celadon said the number of fleets using the Internet purchasing site has increased but, due to difficult economic conditions, the amount of goods purchased has declined.
Heartland Express
First quarter revenues for the Coralville, Iowa, truckload carrier were $94.8 million, up 29.4% from first quarter 2002. Net income increased 15.9%, to $11 million. Operating ratio was 82.9%, compared with 81.3% a year earlier.
During the quarter Heartland acquired facilities in Columbus, Ohio, and Olive Branch, Miss.
J.B. Hunt
J.B. Hunt Transport Services reported net earnings of $11.2 million, up from $4.9 million a year earlier. Total operating revenue was $571 million, including fuel surcharge, compared with $510 million.
Hunt's truck business had revenues of $199.5 million, compared with $187.7 million first quarter 2002. Operating income was $1.3 million versus a $2.2 million loss for the same period last year. Operating ratio was 99.3% versus 101.2%. Revenue per tractor per week, excluding fuel surcharges, was $2,595 versus $2,477. Revenue per loaded mile was $1.449 versus $1.394. Empty mile factor was 9.5% versus 10.1%. At the end of March Hunt's truck business had 4,794 company owned vehicles in service and 798 independent contractor trucks. That compares to 5,487 company owned trucks and 451 contractor vehicles.
Intermodal revenues were $214.6 million versus $185.5 million a year ago. Operating income was $18.9 million versus $10.5 million. Revenue per loaded mile was $1.7, compared with $1.6.
Dedicated carriage revenues were $161.6 million versus $142.9 million. Operating income was $3.7 million versus $5.3 million. Revenue per tractor per week was $2,640 versus $2,580.
Knight Transportation
Knight Transportation had first quarter revenues, before fuel surcharges, of $73.6 million, up 18.8% from a year earlier. Net income was $7.08 million, up 27.4%. Operating ratio was 83.9%, its best first quarter since 1999.
The Phoenix-based carrier's average revenue per loaded mile was $1.431, up 6% from first quarter last year. Empty mile factor was 11.1% versus 11.6%. Tractors in the fleet, including company and owner-operator equipment, totaled 2,168 at the end of quarter versus 1,897 a year ago.
Landstar System
Landstar reported record first quarter net income of $10.2 million, compared with $8.5 million a year earlier. Revenue was a record $366 million, compared with $336 million. Operating margin was 4.7% versus 4.5%.
Landstar's carrier group generated revenues of $290 million, compared with $270 million the same period last year. Revenue per loaded mile was $1.74 versus $1.68. Revenues for the multimodal services group were $69 million versus $59 million. Revenue per load averaged $1,250, up from $1,058 a year ago.
Revenue generated through brokers increased more than 37% from a year ago. Revenue generated through rail and air carriers was up nearly 18%. Revenue hauled by independent contractors was up 2%. At the end of the quarter Landstar had 7,272 independent contractors under lease and 5,840 approved brokers. Revenue from the U.S. government was up some $21 million from a year ago.
Marten Transport
Wisconsin based Marten Transport had first quarter revenues of $79.3 million, compared with $68 million a year ago. Revenues net of fuel surcharges were up 10.8%. Net income was $1.4 million versus $689,000. Operating income was $2.6 million, compared with $1.8 million.
The company, which specializes in temperature-controlled freight, operated 2,116 tractors and 2,769 53-foot trailers at the end of March.
Swift Transportation
Swift's first quarter revenues were $551.3 million, up 15.9% from a year earlier or 11.7% excluding fuel surcharges. Net earnings were $8.9 million compared to $9.4 million. Operating income was $18.4 million versus $17.8 million. Operating ratio was 96.7% versus 96.3%.
Average revenue per loaded mile was $1.424, up slightly from $1.417 last year. Deadhead percentage was 13.77% versus 14.95% a year ago. Swift had 16,006 tractors in service at the end of the quarter, including company and owner-operator equipment. At the same time a year ago there were 15,486 tractors in the fleet. The company said its average fuel cost in the first quarter was 45-cents per gallon higher than the same period last year. Had fuel prices remained the same, Swift's operating ratio would have been 94.7%.
Transport Corp. of America
Minneapolis-based Transport Corp. of America posted a first quarter net loss of $454,000 on revenues of $67.1 million, compared to a $19.5 million loss on $66 million for the first quarter 2002.
Like others, the company was hurt by bad weather and high fuel costs. But Chairman, President and CEO Michael Paxton noted that a focus on improving asset utilization continues to pay off. Deadhead miles dropped to 10%, from 12.7% a year ago. Revenue per tractor per week was $2,688, up 3.6%. Revenue per loaded mile was $1.388 versus $1.424. On the administrative side, revenue per non-driver employee increased 12.6%. Also during the quarter Transport paid down $2.8 million of debt, the 12th straight quarter it has reduced overall debt.
USA Truck
USA Truck, Van Buren, Ark., posted a first quarter loss of $1.15 million compared to net income of $73,853 for the same period a year ago. Operating revenues, before fuel surcharge, were $65.7 million, up 6.6% from the same period last year.
Chairman and CEO Robert Powell said they "continue to experience ups and downs as we execute our long-term recovery plan." First quarter performance was hurt by harsh late-winter weather, record high fuel prices, and unfavorable insurance claims activity. "Over the past six months, we have litigated accident claims that occurred two to three years ago, and have experienced an unusually high amount of adverse verdicts and settlements," Powell said.
Maintenance costs were higher than a year ago, mainly because the company stopped replacing older equipment 15 months ago when resale values plummeted. Young said they'll resume normal trade cycles in second quarter. USA Truck reduced driver pay late in 2002, which resulted in higher recruiting costs early this year, but Powell said the pay reduction, coupled with a per diem program implemented a year ago, has been a success. "Not only has it yielded significant savings," he said, "but we have also successfully managed the unmanned tractors associated with it."
The company's empty mile factor was 9.17% during the quarter, versus 10.20% a year ago. Revenue per mile, before fuel surcharge, was $1.214 versus $1.161. Average number of tractors was 1,898 versus 1,795. Operating ratio was 100.8% versus 98.4%.
U.S. Xpress
Chattanooga, Tenn.-based U.S. Xpress Enterprises posted first quarter 2003 operating revenues of $220.7 million, up 11.9% from first quarter 2002. Net income was $121,000 versus a $1.4 million loss, including non-cash charges, a year earlier. First quarter revenues were $221 million, versus $197.2 million. Operating ratio was 98.6%, compared to 99.5% a year ago.
Co-chairman Patrick Quinn noted that the company has improved year-over-year earnings for five consecutive quarters; but difficult weather conditions, the rapid spike in fuel prices, and a sluggish freight environment served to lessen improvements in the truckload operation. The higher fuel prices, net of fuel surcharges, reduced truckload operating income by about $3 million, he added.
Truckload segment operating revenues, net of fuel surcharges, were $189.9 million, up 7.3% from first quarter 2002. Operating income was $3 million, up 8.8%. Quinn said income would have been nearly twice as much without the dramatic increase in fuel costs. Revenue per mile was $1.27, up 2.8%. Total tractors at the end of the period, including company owned and owner-operator equipment, was 5,576, up 5%. Empty mile percentage was 10.33% versus 10.06% a year ago.
Xpress Global Systems had operating revenues of $29.1 million, up 17.8%; and operating income of $126,000 compared to $41,000 a year ago.
Werner Enterprises
Despite a lackluster freight environment and record high fuel prices Werner Enterprises posted first quarter net income of $11.8 million, up 11% from first quarter 2002, and operating revenues of $347.2 million, also up 11%.
The company said freight demand in January and much of February was no better than the weaker demand experienced during the same period a year ago, but the normal seasonal freight pickup in March was a bit stronger. Werner's average revenue per loaded mile in first quarter was $1.395, five cents higher than first quarter 2002.
Werner choose to boost its normal truck buying last year because it was concerned about the untested 2002 engines. Thus the average age of trucks in the fleet went from 1.5 years on Dec. 21, 2001 to 1.3 years on March 31, 2003. At the end of the first quarter, the company was operating 7,275 company trucks and 1,000 owner-operator trucks. That compares with 6,725 company trucks and 1,175 owner-operator trucks a year earlier. Werner said new truck purchases in the second quarter will be minimal. Buying in the second half will depend on testing and evaluation of the new engines.
The company noted that used truck value have improved significantly from the lows of 2001. Werner reported a $1.4 million gain on the sale of used equipment in first quarter 2003 compared to a $200,000 loss in first quarter 2002.
Allied Holdings
Decatur, Ga.-based Allied Holdings, which specializes in the distribution and transportation services of new and used vehicles, reported a $5.7 million loss on first quarter consolidated revenues of $213.6 million. That compares with a $5.3 million loss on $213.3 million for first quarter 2002.
U.S. automotive group operations had revenues of $168.8 million versus $171.6 million a year ago. Operating ratio was 102.05% versus 99.67%. Allied's Canadian group has first quarter revenues of $37.4 million versus $35 million. Its operating ratio was 97.15% versus 92.29% a year earlier.
The company said higher fuel costs, net of fuel surcharges, reduced pre-tax earnings by some $4 million compared to a year ago. Allied has fuel surcharge programs with its customers representing about 64% of revenue but the surcharges typically only reset at the beginning of each quarter, thus the sharp rise in diesel prices didn't adjust most fuel surcharges until the beginning of the second quarter.
First quarter wage and benefit costs were $3 million higher than a year ago in the U.S., due to a new Teamster contract that went into effect last June.
Patriot Transportation Holding
Patriot's transportation businesses, SunBelt Transport and Florida Rock & Tank Lines, posted combined revenues of $21.3 million for its second fiscal quarter. Revenues for the same period a year ago were $2.1 million. The company said about 60% of the increased revenues was the result of a 6.2% increase in miles hauled. Most of the additional mileage was attributed to the acquisition of the operating assets of Infinger Transportation last May. Transportation operating profit from current operations was $323,000 versus $1.1 million.
For the first six months of Patriot's fiscal year, transportation revenues were $42 million, up 7.7% from last year. Operating profit was $1 million versus $2.4 million.
The Jacksonville, Fla.-based company also owns and operates real estate. Consolidated revenues for all operations totaled $25.1 million for the second fiscal quarter, compared with $23 million a year earlier. Consolidated operating profit was $1.9 million versus $3.2 million.
