<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to _______________________
Commission file number 0-12255
YELLOW CORPORATION
-----------------
(Exact name of registrant as specified in its charter)
Delaware 48-0948788
- --------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10990 Roe Avenue, P.O. Box 7563, Overland Park, Kansas 66207
------------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
(913) 696-6100
--------------
(Registrant's telephone number, including area code)
No Changes
--------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 31, 1998
----- ----------------------------
Common Stock, $1 Par Value 26,076,917 shares
<PAGE> 2
YELLOW CORPORATION
INDEX
<TABLE>
<CAPTION>
Item Page
PART I
<S> <C>
1. Financial Statements
Consolidated Balance Sheets -
June 30, 1998 and December 31, 1997 3
Statements of Consolidated Operations -
Quarter and Six Months Ended June 30, 1998 and 1997 4
Statements of Consolidated Cash Flows -
Six Months Ended June 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II
6. Exhibits and Reports on Form 8-K 15
Signatures 16
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS (Unaudited)
Yellow Corporation and Subsidiaries
June 30, 1998 and December 31, 1997
(Amounts in thousands except share data)
<TABLE>
<CAPTION>
June 30 December 31
1998 1997
------------ -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 23,463 $ 17,703
Accounts receivable 281,452 293,300
Prepaid expenses and other 42,080 81,170
Current assets of discontinued operations - 66,588
----------- ----------
Total current assets 346,995 458,761
----------- ----------
PROPERTY AND EQUIPMENT:
Cost 1,849,690 1,833,606
Less - Accumulated depreciation 1,166,902 1,141,447
----------- ----------
Net property and equipment 682,788 692,159
----------- ----------
OTHER ASSETS 22,940 25,540
NONCURRENT ASSETS OF DISCONTINUED OPERATIONS, NET - 94,352
----------- ----------
$ 1,052,723 $1,270,812
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and checks outstanding $ 95,592 $ 148,432
Wages and employees' benefits 149,856 153,073
Other current liabilities 133,853 131,347
Current maturities of long-term debt 473 2,625
Current liabilities of discontinued operations - 45,358
----------- ----------
Total current liabilities 379,774 480,835
----------- ----------
OTHER LIABILITIES:
Long-term debt 157,547 163,080
Deferred income taxes 19,309 21,429
Claims, insurance and other 135,818 136,840
Noncurrent liabilities of discontinued operations - 22,777
----------- ----------
Total other liabilities 312,674 344,126
----------- ----------
SHAREHOLDERS' EQUITY:
Common stock, $1 par value 29,320 29,289
Capital surplus 14,450 13,868
Retained earnings 378,754 429,700
Treasury stock (62,249) (27,006)
----------- ----------
Total shareholders' equity 360,275 445,851
----------- ----------
$ 1,052,723 $1,270,812
============ ===========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
STATEMENTS OF CONSOLIDATED OPERATIONS (Unaudited)
Yellow Corporation and Subsidiaries
For the Quarter and Six Months Ended June 30
(Amounts in thousands except per share data)
<TABLE>
<CAPTION>
Second Quarter Six Months
------------------ ---------------------
1998 1997 1998 1997
-------- ------- --------- ---------
OPERATING REVENUE $727,419 $730,996 $1,419,879 $1,412,652
-------- ------- --------- ---------
<S> <C> <C> <C> <C>
OPERATING EXPENSES:
Salaries, wages and benefits 466,885 464,232 917,253 905,682
Operating expenses and supplies 111,454 115,394 226,653 228,936
Operating taxes and licenses 23,935 24,205 47,641 49,381
Claims and insurance 14,976 16,000 32,058 30,878
Depreciation 26,369 26,441 53,250 53,916
Purchased transportation 59,341 58,148 114,228 99,720
Property and equipment gains, net (725) (100) (5,297) (600)
-------- ------- --------- ---------
Total operating expenses 702,235 704,320 1,385,786 1,367,913
-------- ------- --------- ---------
INCOME FROM OPERATIONS 25,184 26,676 34,093 44,739
-------- ------- --------- ---------
NONOPERATING (INCOME) EXPENSES:
Interest expense 3,031 3,150 6,130 7,053
Other, net 169 (1,002) 401 (1,099)
-------- ------- --------- ---------
Nonoperating expenses, net 3,200 2,148 6,531 5,954
-------- ------- --------- ---------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 21,984 24,528 27,562 38,785
INCOME TAX PROVISION 9,705 10,663 11,520 16,589
-------- ------- --------- ---------
INCOME FROM CONTINUING OPERATIONS 12,279 13,865 16,042 22,196
DISCONTINUED OPERATIONS:
Income (loss) from operation of
discontinued operations, net (735) 110 (5,145) (1,720)
Loss on disposal of discontinued
operations, net (61,601) - (61,601) -
-------- ------- --------- ---------
NET INCOME (LOSS) $(50,057) $13,975 $ (50,704) $ 20,476
======== ======= ========= =========
AVERAGE SHARES OUTSTANDING- (BASIC) 27,198 28,115 27,555 28,113
======== ======= ========= =========
AVERAGE SHARES OUTSTANDING- (DILUTED) 27,426 28,516 27,784 28,514
======== ======= ========= =========
BASIC EARNINGS (LOSS) PER SHARE:
Income from continuing operations $ .45 $ .49 $ .58 $ .79
Income (loss) from operation of
discontinued operations (.03) .01 (.18) (.06)
Loss on disposal of
discontinued operations (2.26) - (2.24) -
-------- ------- --------- ---------
Net income (loss) $ (1.84) $ .50 $ (1.84) $ .73
======== ======= ========= =========
DILUTED EARNINGS (LOSS) PER SHARE:
Income from continuing operations $ .45 $ .48 $ .58 $ .78
Income (loss) from operation of
discontinued operations (.03) .01 (.19) (.06)
Loss on disposal of
discontinued operations (2.24) - (2.21) -
-------- -------- --------- ---------
Net income (loss) $ (1.82) $ .49 $ (1.82) $ .72
======== ======== ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited)
Yellow Corporation and Subsidiaries
For the Six Months Ended June 30, 1998 and 1997
(Amounts in thousands)
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net cash from operating activities $ 73,535 $ 36,940
-------- --------
INVESTING ACTIVITIES:
Acquisition of property and equipment (46,471) (22,701)
Proceeds from disposal of property and equipment 12,431 11,256
Net capital expenditures of discontinued operations 2,203 (3,236)
-------- --------
Net cash used in investing activities (31,837) (14,681)
-------- --------
FINANCING ACTIVITIES:
Treasury stock purchases (33,495) -
Commercial paper, net - (11,832)
Repayment of long-term debt, net (2,948) (10,420)
Proceeds from exercise of stock options, net 505 97
-------- --------
Net cash used in financing activities (35,938) (22,155)
-------- --------
NET INCREASE IN CASH 5,760 104
CASH, BEGINNING OF PERIOD 17,703 22,899
-------- --------
CASH, END OF PERIOD $ 23,463 $ 23,003
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
------------------------------------------------------
Income taxes (received) paid, net $ (4,298) $ 13,377
======== ========
Interest paid $ 4,898 $ 6,605
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Yellow Corporation and Subsidiaries
1. The accompanying consolidated financial statements include the accounts of
Yellow Corporation and its wholly-owned subsidiaries (the company) and have
been prepared by the company, without audit by independent public
accountants, pursuant to the rules and regulations of the Securities and
Exchange Commission. In the opinion of management, all normal recurring
adjustments necessary for a fair statement of the results of operations for
the interim periods included herein have been made. Certain information
and note disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted from these statements pursuant to such rules and
regulations. Accordingly, the accompanying consolidated financial
statements should be read in conjunction with the consolidated financial
statements included in the company's 1997 Annual Report to Shareholders.
2. The company provides freight transportation services primarily to the
less-than-truckload (LTL) market in North America through its subsidiaries,
Yellow Freight System, Inc. (Yellow Freight), Saia Motor Freight Line, Inc.
(Saia) and WestEx, Inc. (WestEx). Yellow Services, Inc. (Yellow Services),
is a subsidiary that provides information technology and other services to
the company and its subsidiaries. Yellow Freight comprises approximately
86 percent of total revenue while Saia comprises approximately 12 percent.
3. On June 1, 1998 the company reached agreement in principle to sell Preston
Trucking Company, Inc. (Preston Trucking) its Northeast regional LTL
segment to a management group of three senior officers of Preston Trucking.
Preston Trucking is a regional carrier serving the Northeast, Mid-Atlantic
and Central States. The sale has been completed and resulted in a second
quarter charge of $61.6 million net of anticipated tax benefits of
approximately $30.0 million, which has been reflected as discontinued
operations in the consolidated statement of operations. No interest
charges have been allocated to discontinued operations and the company does
not anticipate any change in the loss recorded on disposal of the
discontinued operations. The consolidated financial statements have been
restated to remove Preston Trucking from continuing operations and disclose
these amounts as discontinued operations in accordance with APB No. 30.
Operating revenue of Preston Trucking for the quarter and six months ended
June 30, 1998 were $106.7 million and $211.5 million and revenues for the
quarter and six months ended June 30, 1997 were $113.4 million and $216.9
million.
6
<PAGE> 7
4. The difference between average common shares outstanding used in the
computation of basic earnings per share and fully diluted earnings per
share is attributable to outstanding common stock options.
5. Effective January 1, 1998, the company prospectively adopted Statement of
Position 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use (the SOP). The statement requires capitalization
of certain costs associated with developing or obtaining internal-use
software, once the capitalization criteria of the SOP have been met.
Capitalizable costs include external direct costs of materials and services
consumed in developing or obtaining the software, payroll and
payroll-related costs for employees directly associated with the project,
and interest. Prior to adoption of the standard, the company had
capitalized only the external direct costs associated with internal-use
software. In the quarter and six months ended June 30, 1998, the company
capitalized $1.4 million and $2.4 million, primarily payroll and
payroll-related costs incurred since January 1, 1998, on eligible projects.
6. The company adopted FASB Statement No. 130, Reporting Comprehensive Income,
in first quarter 1998. This statement establishes standards for the
reporting and display of comprehensive income and its components in the
financial statements. The company's comprehensive income includes net
income and foreign currency translation adjustments. Comprehensive loss
for the second quarter and six months ended June 30, 1998 was $50.3 million
and $50.9 million and for the 1997 second quarter and six months ended June
30, 1997 comprehensive income was $14.0 million and $20.4 million.
7. The company adopted FASB Statement No. 131, Disclosures about Segments of
an Enterprise and Related Information, in first quarter 1998. This
statement requires the company report financial and descriptive information
about its reportable operating segments, on a basis consistent with that
used internally for evaluating segment performance and allocating resources
to segments.
Under the standard, consistent with the Business Segments disclosure in the
company's 1997 Annual Report to Shareholders, the company has two
reportable segments, strategic business units that offer different products
and services. The National segment is comprised primarily of the
operations of Yellow Freight, a carrier that provides comprehensive
national LTL service as well as international service to Mexico, Canada
and, via alliances, Europe, the Asia/Pacific region, South America and
Central America. The Southeast regional segment consists of the operations
of Saia, a regional LTL carrier that provides overnight and second-day
service in eleven southeastern states and Puerto Rico. The segments are
7
<PAGE> 8
managed separately because each requires different operating, technology
and marketing strategies. The company evaluates performance primarily on
operating income, net income, adjusted for tax-affected nonoperating
expenses, gains and losses, and return on capital.
The accounting policies of the segments are the same as those described in
the summary of significant accounting policies in the company's 1997 Annual
Report to Shareholders. The company also charges a tradename fee to Yellow
Freight (1% of revenue) for use of the company's trademark. Interest and
intersegment transactions are recorded at current market rates. Income
taxes are allocated in accordance with a tax sharing agreement in
proportion to each segment's contribution to the parent's consolidated tax
status.
8. As further described in the footnotes to the 1997 consolidated financial
statements, Yellow Freight recorded a special charge of $46.1 million, or
$28.3 million after taxes in the fourth quarter of 1996. The major
components of the charge and subsequent activity are as summarized below
(amounts in millions):
<TABLE>
<CAPTION>
Six Months Ended June 30, 1998
---------------------------------------
December Favorable Paid or Ending
31, 1997 Revisions Utilized Balance
-------- --------- -------- -------
<S> <C> <C> <C> <C>
Write down nonoperating
real estate $ 5.2 $ .7 $ 2.3 $ 2.2
Severance and organization
design .2 - .2 -
-------- -------- -------- -------
Total $ 5.4 $ .7 $ 2.5 $ 2.2
======== ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
Cumulative Through
June 30, 1998
Pre-tax -----------------------------
1996 Favorable Paid or Ending
Charge Revisions Utilized Balance
------- --------- --------- -------
<S> <C> <C> <C> <C>
Write down nonoperating
real estate $ 16.5 $ 1.7 $ 12.6 $ 2.2
Write off computer software 8.4 - 8.4 -
Early retirement program 13.7 - 13.7 -
Company car program reduction 3.6 - 3.6 -
Severance and organization
design 3.9 - 3.9 -
------- ------- -------- -------
Total $ 46.1 $ 1.7 $ 42.2 $ 2.2
======= ======= ======== =======
</TABLE>
Marketing efforts continue on nonoperating real estate. During the first
six months of 1998, nonoperating property written down in the charge to
$2.8 million was sold for $3.5 million utilizing portions of the write
down. Revisions to estimates of $.7 million during the first six months of
1998 were reflected in operating income.
8
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
FINANCIAL CONDITION
June 30, 1998 Compared to December 31, 1997
On June 1, 1998 the company reached agreement in principle to sell Preston
Trucking to a management group of three senior officers of Preston Trucking. The
sale has been completed and resulted in a second quarter charge of $61.6 million
net of anticipated tax benefits, which has been reflected as discontinued
operations in the consolidated statement of operations. No interest charges
have been allocated to discontinued operations and the company does not
anticipate any change in the loss on disposal of the discontinued operations.
The consolidated financial statements have been restated to remove Preston
Trucking from continuing operations and disclose these amounts as discontinued
operations in accordance with APB No. 30.
Working capital decreased slightly during the first six months of 1998,
resulting in a $32.8 million working capital deficit position at June 30, 1998
compared to a $22.1 million deficit position at December 31, 1997. The decrease
in working capital was primarily the result of discontinued operations,
decreased accounts receivable and prepaid expenses partially offset by
reductions in accounts payable and checks outstanding. The accounts receivable
decrease of $11.8 million is comprised of a $16.0 million decrease due to the
reduction in accounts receivable subject to Yellow Freight's asset-backed
securitization agreement and a $4.2 million increase due to other changes. The
company can operate with a deficit working capital position because of rapid
turnover of accounts receivable, effective cash management and ready access to
funding.
Total debt during the first six months of 1998 decreased $7.7 million. Net
capital expenditures for continuing operations for the first six months of 1998
were $34.0 million. Subject to ongoing review, total net capital spending for
1998 is expected to total approximately $130 million.
During the quarter ended June 30, 1998 the Company substantially completed a $25
million stock repurchase program approved by the Board of Directors in May 1998.
This program followed an earlier $25 million stock repurchase that was completed
between December 1997 and March 1998.
The company remains on plan to complete the system modifications and systems
replacements required in order to process transactions in the year 2000. Such
efforts are anticipated to be largely complete by the end of 1998. The company
expensed $1.7 million of modification costs in the second quarter of 1998 and
$3.5 million for six months ended June 30, 1998 compared with $1.5 million
expensed in the second quarter of 1997 and $3.1 for the six months ended June
30, 1997.
9
<PAGE> 10
RESULTS OF OPERATIONS
Comparison of Quarter Ended June 30, 1998 and 1997
Income from continuing operations for the second quarter was $12.3 million, or
$.45 earnings per share (diluted). Including the after-tax charge from
discontinued operations, the net loss was $50.1 million or $1.82 net loss per
share (diluted). For the quarter ending June 1997 income from continuing
operations of $13.9 million, or $.48 per share (diluted), and net income was
$14.0 million or $.49 net earnings per share (diluted). The 1997 quarter
included a non-recurring charge of $.12 per share for expenses related to a
change of operations at Yellow Freight.
Operating revenue in the second quarter of 1998 was $727.4 million, a .5 percent
decrease over 1997 second quarter revenue of $731.0 million. Operating income
for the Company in the 1998 second quarter was $25.2 million, compared with
operating income of $26.7 million in the 1997 second quarter.
During the second quarter, Yellow Freight reported operating income of $19.7
million. Operating income during the 1997 second quarter was $22.7 million.
Yellow Freight revenue for the 1998 second quarter was $624.9 million, versus
$640.9 million a year earlier. The Yellow Freight operating ratio was 96.8,
compared with 96.5 in the 1997 second quarter.
Negotiations on a new National Master Freight Agreement (NMFA) with the
Teamsters had a significant impact on business for Yellow Freight. Freight was
diverted to nonunion competitors in the first quarter due to customer fear that
failure to negotiate a settlement by March 31, 1998, could lead to a strike and
disrupt their product deliveries. The negotiation resulted in a five-year
contract with the Teamsters, which was ratified on April 7, and which greatly
stabilized customer concerns. As a result, business levels began improving in
the second quarter though they remained below second quarter 1997 levels.
Saia continued its strong growth, posting 1998 second quarter revenue of $86.6
million, up 11.6 percent from $77.6 million in the 1997 second quarter.
Operating income for Saia was $7.0 million for the second quarter of 1998,
compared with $4.8 million up 47 percent over the 1997 period. Saia's operating
ratio was 91.9 for the second quarter versus 93.8 in the 1997 second quarter.
Saia is an Atlanta-based regional carrier serving the southeastern U.S., and
continues to grow at double-digit rates.
WestEx, Yellow's regional carrier serving California, Colorado and much of the
southwestern U.S., reported revenue of $15.9 million for the 1998 second
quarter, up 27.2 percent from $12.5 million in the year-earlier quarter.
10
<PAGE> 11
The loss on operation of discontinued operations net of anticipated tax benefits
at Preston Trucking was $735 thousand for the quarter ended June 30, 1998
compared to income of $110 thousand for the quarter ended June 30, 1997. The
loss was principally due to freight diversion prior to the completion of union
negotiations in the second quarter of 1998.
The loss on disposal of discontinued operations of $61.6 million net of
anticipated income tax benefits is a result of the sale of Preston Trucking to a
management group of three senior officers of Preston Trucking.
Interest expense fell between years as a result of reduced debt levels. The
effective tax rate was 44.1 percent in the second quarter 1998 and 43.5 percent
in the second quarter 1997.
Comparison of Six Months Ended June 30, 1998 and 1997
Income from continuing operations for the six months was $16.0 million, or $.58
earnings per share (diluted). Including the after-tax charge from discontinued
operations, the net loss was $50.7 million, or $1.82 net loss per share
(diluted). For the six months ending June 1997 income from continuing
operations was $22.2 million, or $.78 per share (diluted), and net income was
$20.5 million, or $.72 net earnings per share (diluted).
Operating revenue in the six months ended 1998 was $1.4 billion, breakeven with
the first six months of 1997 revenue of $1.4 billion. Operating income for the
company for six months of 1998 was $34.1 million compared with operating income
of $44.7 million in the first six months of 1997.
During the six months ended June 30, 1998, Yellow Freight reported operating
income of $27.1 million. Operating income during the six months ended June 30,
1997, was $38.2 million. Yellow Freight revenue for the six months of 1998 was
$1.2 billion, versus $1.2 billion a year earlier. The Yellow Freight operating
ratio was 97.8, compared with 96.9 in the 1997 year.
Saia continued its strong growth, posting 1998 year to date revenue of $166.9
million, up 11.3 percent from $150.0 million in the first six months of 1997.
Operating income for Saia was $11.3 million for the six months of 1998,
compared with $8.4 million in the 1997 period. Saia's operating ratio was 93.2
for the six months in 1998 versus 94.4 in 1997.
WestEx, reported revenue of $30.4 million for the six months ended June 30,
1998 versus $22.9 million in the year-earlier period.
The loss on operation of discontinued operations at Preston Trucking increased
to $5.2 million, net of anticipated tax benefits of $2.8 million, for the six
months ended June 30, 1998, compared to a loss of $1.7 million, net of tax
benefits of $.7 million, for the six months ended June 30, 1997, principally
the result of two factors. The first
11
<PAGE> 12
was a one-time cost incurred mostly in 1998 pertaining to a change in operations
implemented in December 1997. Second, Preston Trucking like other union carriers
that bargain independently, was subject to freight diversion prior to completion
of its union negotiations late in the second quarter of 1998.
The loss on disposal of discontinued operations of $61.6 million net of
anticipated income tax benefits of $30.0 million is a result of the sale of
Preston Trucking to a management group of three senior officers of Preston
Trucking.
Interest expense fell between years as a result of reduced debt levels. The
effective tax rate was 41.8 percent year to date 1998 and 42.8 percent year to
date 1997.
Statements contained herein that are not purely historical are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding the company's expectations, hopes, beliefs
and intentions on strategies regarding the future. It is important to note that
the company's actual future results could differ materially from those projected
in such forward-looking statements because of a number of factors, including but
not limited to inflation, labor relations, inclement weather, competitor pricing
activity and a downturn in general economic activity.
12
<PAGE> 13
Yellow Freight System, Inc.
Financial Information
For the Quarter and Six Months Ended June 30
(Amounts in thousands)
<TABLE>
<CAPTION>
Second Quarter Six Months
------------------ ----------------------------
1998 1997(1) % 1998 1997(1) %
-------- -------- ----- --------- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
Operating revenue 624,897 640,909 (2.5) 1,222,615 1,239,736 (1.4)
Operating income 19,719 22,733 27,125 38,178
Operating ratio 96.8 96.5 97.8 96.9
Total assets at June 30 772,945 889,690
</TABLE>
<TABLE>
<CAPTION>
Second Quarter
Second Quarter Amount/Workday
------------------ --------------------------
1998 1997 % 1998 1997 %
-------- -------- ----- ---------- -------- -----
Workdays (64) (64)
<S> <C> <C> <C> <C> <C> <C> <C>
Financial statement LTL 571,061 585,861 (2.5) 8,922.8 9,154.1 (2.5)
revenue TL 55,306 56,617 (2.3) 864.2 884.6 (2.3)
Other (1,471) (1,569) 6.2 (23.0) (24.5) 6.2
Total 624,896 640,909 (2.5) 9,764.0 10,014.2 (2.5)
Revenue excluding LTL 571,061 585,861 (2.5) 8,922.8 9,154.1 (2.5)
revenue recognition TL 55,306 56,617 (2.3) 864.2 884.6 (2.3)
Adjustment Other (200) 495 NM (3.1) 7.7 NM
Total 626,167 642,973 (2.6) 9,783.9 10,046.4 (2.6)
Tonnage LTL 1,727 1,802 (4.2) 26.98 28.16 (4.2)
TL 396 402 (1.6) 6.18 6.28 (1.6)
Total 2,123 2,204 (3.7) 33.16 34.44 (3.7)
Shipments LTL 3,507 3,650 (3.9) 54.80 57.03 (3.9)
TL 53 54 (1.6) .83 .85 (1.6)
Total 3,560 3,704 (3.9) 55.63 57.88 (3.9)
Revenue/cwt. LTL 16.54 16.26 1.7
TL 6.99 7.04 (.7)
Total 14.76 14.57 1.3
Revenue/shipment LTL 162.84 160.51 1.5
TL 1,037.22 1,044.51 (.7)
Total 175.93 173.44 1.4
</TABLE>
(1) 1997 data includes a $5.6M pre-tax charge related to a major change of
operations.
13
<PAGE> 14
Saia Motor Freight Line, Inc.
Financial Information
For the Quarter and Six Months Ended June 30
(Amounts in thousands)
<TABLE>
<CAPTION>
Second Quarter Six Months
---------------- -----------------------
1998 1997 % 1998 1997 %
------- ------- ---- ------- -------------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Operating revenue 86,579 77,551 11.6 166,850 149,971 11.3
Operating income 7,044 4,777 11,268 8,372
Operating ratio 91.9 93.8 93.2 94.4
Total assets at June 30 205,196 157,750
</TABLE>
<TABLE>
<CAPTION>
Second Quarter
Second Quarter Amount/Workday
---------------- -----------------------
1998 1997 % 1998 1997 %
------- ------- ---- -------------- ------- ----
Workdays (64) (64)
<S> <C> <C> <C> <C> <C> <C> <C>
Financial statement LTL 77,572 69,623 11.4 1,212.1 1,087.9 11.4
revenue TL 9,007 7,928 13.6 140.7 123.9 13.6
Total 86,579 77,551 11.6 1,352.8 1,211.8 11.6
Revenue excluding LTL 77,531 69,904 10.9 1,211.4 1,092.3 10.9
revenue recognition TL 9,002 7,960 13.1 140.7 124.4 13.1
Adjustment Total 86,533 77,864 11.1 1,352.1 1,216.7 11.1
Tonnage LTL 439 413 6.3 6.86 6.46 6.3
TL 154 138 11.6 2.41 2.16 11.6
Total 593 551 7.6 9.27 8.62 7.6
Shipments LTL 830 786 5.6 12.97 12.28 5.6
TL 16 15 6.2 .24 .23 6.2
Total 846 801 5.6 13.21 12.51 5.6
Revenue/cwt. LTL 8.82 8.46 4.3
TL 2.92 2.88 1.4
Total 7.29 7.06 3.3
Revenue/shipment LTL 93.43 88.97 5.0
TL 579.99 544.80 6.5
Total 102.36 97.29 5.2
</TABLE>
Note: Prior year statistics restated for consistency.
14
<PAGE> 15
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
Yellow Corporation announced June 1, 1998, that it has reached agreement in
principle to sell Preston Trucking Company to a management group of three
senior officers of Preston Trucking. The sale of Preston Trucking was
completed on July 14, 1998.
Yellow Corporation announced June 1, 1998, that its Board of Directors has
authorized another repurchase of shares of the company's outstanding common
stock with an aggregate purchase price of up to $25 million. It is the
second stock repurchase program announced by Yellow since December 1997,
when the company was authorized to repurchase up to $25 million in common
stock.
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
YELLOW CORPORATION
-------------------------------------
Registrant
Date: August 12, 1998 /s/ A. Maurice Myers
--------------------------- -------------------------------------
A. Maurice Myers
Chairman of the Board of
Directors, President & Chief
Executive Officer
Date: August 12, 1998 /s/ H. A. Trucksess, III
--------------------------- -------------------------------------
H. A. Trucksess, III
Senior Vice President - Finance/
Chief Financial Officer &
Treasurer
16
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
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<SECURITIES> 0
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<PP&E> 1,849,690
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0
0
<COMMON> 29,320
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<SALES> 0
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<INCOME-TAX> 11,520
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<DISCONTINUED> (66,746)
<EXTRAORDINARY> 0
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