<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 September 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 November 10, 1998
----- --------------------------------
Common Stock, $1 Par Value 25,659,392 shares
<PAGE> 2
YELLOW CORPORATION
INDEX
Item Page
- ---- ----
PART I
------
1. Financial Statements
Consolidated Balance Sheets -
September 30, 1998 and December 31, 1997 3
Statements of Consolidated Operations -
Quarter and Nine Months Ended September 30, 1998 and 1997 4
Statements of Consolidated Cash Flows -
Nine Months Ended September 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
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6. Exhibits and Reports on Form 8-K 15
Signatures 16
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS (Unaudited)
Yellow Corporation and Subsidiaries
September 30, 1998 and December 31, 1997
(Amounts in thousands except share data)
September 30 December 31
1998 1997
------------ -----------
ASSETS
CURRENT ASSETS:
Cash $ 30,360 $ 17,703
Accounts receivable 259,348 293,300
Prepaid expenses and other 49,900 81,170
Current assets of discontinued operations - 66,588
----------- ----------
Total current assets 339,608 458,761
----------- ----------
PROPERTY AND EQUIPMENT:
Cost 1,870,169 1,833,606
Less - Accumulated depreciation 1,179,432 1,141,447
----------- ----------
Net property and equipment 690,737 692,159
----------- ----------
OTHER ASSETS 22,285 25,540
NONCURRENT ASSETS OF DISCONTINUED OPERATIONS, NET - 94,352
----------- ----------
$ 1,052,630 $1,270,812
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and checks outstanding $ 105,310 $ 148,432
Wages and employees' benefits 136,951 153,073
Other current liabilities 140,771 131,347
Current maturities of long-term debt 223 2,625
Current liabilities of discontinued operations - 45,358
----------- ----------
Total current liabilities 383,255 480,835
----------- ----------
OTHER LIABILITIES:
Long-term debt 157,025 163,080
Deferred income taxes 19,726 21,429
Claims, insurance and other 127,748 136,840
Noncurrent liabilities of discontinued operations - 22,777
----------- ----------
Total other liabilities 304,499 344,126
----------- ----------
SHAREHOLDERS' EQUITY:
Common stock, $1 par value 29,327 29,289
Capital surplus 14,532 13,868
Retained earnings 391,887 429,700
Treasury stock (70,870) (27,006)
----------- -----------
Total shareholders' equity 364,876 445,851
----------- -----------
$ 1,052,630 $1,270,812
=========== ===========
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 Nine Months Ended September 30
(Amounts in thousands except per share data)
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------------ ----------------------
1998 1997 1998 1997
-------- --------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATING REVENUE $744,873 $761,351 $2,164,752 $2,174,003
-------- -------- ---------- ----------
OPERATING EXPENSES:
Salaries, wages and benefits 468,103 484,321 1,385,356 1,390,003
Operating expenses and supplies 102,871 101,685 313,025 312,148
Operating taxes and licenses 23,346 23,593 70,986 72,974
Claims and insurance 22,622 16,344 54,680 47,222
Communications and utilities 8,962 8,608 25,460 27,081
Depreciation 25,767 27,184 79,018 81,100
Purchased transportation 67,021 65,071 181,249 164,791
Property and equipment gains, net (259) (480) (5,555) (1,080)
-------- -------- ---------- ----------
Total operating expenses 718,433 726,326 2,104,219 2,094,239
-------- -------- ---------- ----------
INCOME FROM OPERATIONS 26,440 35,025 60,533 79,764
-------- -------- ---------- ----------
NONOPERATING (INCOME) EXPENSES:
Interest expense 2 ,714 3,364 8,844 10,417
Other, net 276 553 677 (546)
-------- -------- ---------- ----------
Nonoperating expenses, net 2,990 3,917 9,521 9,871
-------- -------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 23,450 31,108 51,012 69,893
INCOME TAX PROVISION 9,905 11,990 21,425 28,579
-------- -------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS 13,545 19,118 29,587 41,314
DISCONTINUED OPERATIONS:
Income (loss) from operation of
discontinued operations, net - 940 (5,145) (780)
Loss on disposal of discontinued
operations, net - - (61,601) -
-------- -------- ---------- ----------
NET INCOME (LOSS) $ 13,545 $ 20,058 $ (37,159) $ 40,534
======== ======== ========== ==========
AVERAGE SHARES OUTSTANDING- (BASIC) 26,041 28,374 27,050 28,201
======== ======== ========== ==========
AVERAGE SHARES OUTSTANDING- (DILUTED) 26,151 28,919 27,290 28,596
======== ======== ========== ==========
BASIC EARNINGS (LOSS) PER SHARE:
Income from continuing operations $ .52 $ .68 $ 1.09 $ 1.47
Income (loss) from operation of
discontinued operations - .03 (.19) (.03)
Loss on disposal of
discontinued operations - - (2.27) -
-------- -------- ---------- ----------
Net income (loss) $ .52 $ .71 $ (1.37) $ 1.44
======== ======== ========== ==========
DILUTED EARNINGS (LOSS) PER SHARE:
Income from continuing operations $ .52 $ .66 $ 1.08 $ 1.45
Income (loss) from operation of
discontinued operations - .03 (.19) (.03)
Loss on disposal of
discontinued operations - - (2.25) -
-------- -------- ---------- ----------
Net income (loss) $ .52 $ .69 $ (1.36) $ 1.42
======== ======== ========== ==========
</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 Nine Months Ended September 30, 1998 and 1997
(Amounts in thousands)
1998 1997
--------- ---------
OPERATING ACTIVITIES:
Net cash from operating activities $ 120,917 $ 100,860
--------- ---------
INVESTING ACTIVITIES:
Acquisition of property and equipment (84,306) (61,399)
Proceeds from disposal of property and equipment 18,470 12,122
Net capital expenditures of discontinued operations 2,203 (9,603)
--------- ---------
Net cash used in investing activities (63,633) (58,880)
--------- ---------
FINANCING ACTIVITIES:
Treasury stock purchases (42,115) -
Repayment of long-term debt, net (3,132) (29,260)
Proceeds from exercise of stock options, net 620 4,630
--------- ---------
Net cash used in financing activities (44,627) (24,630)
--------- ---------
NET INCREASE IN CASH 12,657 17,350
CASH, BEGINNING OF PERIOD 17,703 22,899
--------- ---------
CASH, END OF PERIOD $ 30,360 $ 40,249
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
- -----------------------------------
Income taxes (received) paid, net $ (3,636) $ 13,377
========= =========
Interest paid $ 5,384 $ 6,605
========= =========
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. 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.
6
<PAGE> 7
The segments are 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.
4. 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 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.
5. 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.
6. 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 nine months ended September 30, 1998, the
company capitalized $1.0 million and $4.0 million, primarily payroll and
payroll-related costs incurred since January 1, 1998, on eligible projects.
7
<PAGE> 8
7. 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 income
for the third quarter and comprehensive loss for nine months ended
September 30, 1998 was $13.1 million and $37.8 million and for the 1997
third quarter and nine months ended September 30, 1997 comprehensive income
was $20.1 million and $40.4 million.
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):
Nine Months Ended September 30, 1998
------------------------------------------
December Favorable Paid or Ending
31, 1997 Revisions Utilized Balance
--------- --------- --------- -------
Write down nonoperating
real estate $ 5.2 $ .7 $ 3.9 $.6
Severance and organization
design .2 - .2 -
--------- --------- ------- -------
Total $ 5.4 $ .7 $ 4.1 $.6
========= ========= ======= =======
Cumulative Through
September 30, 1998
Pre-tax ------------------------------
1996 Favorable Paid or Ending
Charge Revisions Utilized Balance
-------- ---------- --------- -------
Write down nonoperating
real estate $ 16.5 $ 1.7 $ 14.2 $ .6
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 $ 43.8 $ .6
======== ======== ======= ======
Marketing efforts continue on nonoperating real estate. During the first
nine months of 1998, nonoperating property written down in the charge to
$3.8 million was sold for $4.7 million utilizing portions of the write
down. Revisions to estimates of $.7 million during the first nine 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
September 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 nine months of 1998,
resulting in a $43.6 million working capital deficit position at September 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 $34.0 million is comprised of a $49.0 million decrease due to the
reduction in accounts receivable subject to Yellow Freight's asset-backed
securitization agreement and a $15.0 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 nine months of 1998 decreased $8.5 million. Net
capital expenditures for continuing operations for the first nine months of 1998
were $65.8 million. Subject to ongoing review, total net capital spending for
1998 is expected to be approximately $110 million.
During the quarter ended September 30, 1998 the Company completed its second $25
million stock repurchase program approved by the Board of Directors in May 1998.
This program followed an earlier $25 million stock repurchase completed between
December 1997 and March 1998. On August 27, 1998, the Board of Directors
authorized a third $25 million stock repurchase program. The company has
purchased $5.4 million in treasury stock under the third stock repurchase
program.
9
<PAGE> 10
Year 2000
The company's year 2000 project is intended to minimize the business impact of
Year 2000 failures. Work efforts both to remediate and replace mainframe and
client/server business applications are on schedule to be ready for the
millennium change. The project will enter a phase of final verification testing
at the end of the first quarter of 1999 to revalidate Year 2000 readiness.
The Company's year 2000 strategy includes mainframe, mid-range, and
client/server applications, PCs, workstations, end user computing, vendor
software, equipment, environmental operations in terminals and offices,
suppliers and customers. Inventory and assessment of all areas have been
completed. The Company has inspected, remediated, tested and reinstalled the
majority of its code. Non-compliant vendor software and equipment determined to
be critical to the business is being repaired or replaced. PC hardware is
currently being replaced as needed through a systematic schedule of upgrades.
The Company's strategy also includes developing relationships with vendors who
are working toward compliance. The Company has material vendor relationships
with financial institutions, utilities and telecommunication companies. These
vendors indicate that they expect to achieve compliance and do not anticipate
business interruptions as the century changes. The Company is developing
contingency plans to address Year 2000 issues that may arise with these key
vendors. Steps are being taken to address the potential scenarios that may
occur with key vendors and customers.
The Company began its Year 2000 project in 1995 and has estimated total project
costs to be $17-18 million. Through September 30, 1998 the Company has incurred
approximately $12.8 million which represents approximately 7.5% of its
information technology budget over the project period. The Company expensed $4.9
million of modification costs in the nine months ended September 30, 1998.
RESULTS OF OPERATIONS
Comparison of Quarter Ended September 30, 1998 and 1997
Net income for the third quarter was $13.5 million, or $.52 per share (diluted).
For the quarter ending September 1997 income from continuing operations of $19.1
million, or $.66 per share (diluted), and net income was $20.1 million or $.69
per share (diluted).
Operating revenue in the third quarter of 1998 was $744.9 million, a 2.2 percent
decrease over 1997 third quarter revenue of $761.4 million. Operating income
was $26.4 million in the 1998 third quarter, compared with operating income of
$35.0 million in the 1997 third quarter.
10
<PAGE> 11
Yellow Freight reported operating income of $20.5 million for the third quarter
of 1998 compared to 1997 third quarter operating income of $30.3 million. Yellow
Freight revenue for the 1998 third quarter was $639.6 million, versus $666.2
million a year earlier. The Yellow Freight operating ratio was 96.8, compared
with 95.5 in the 1997 third quarter.
A strike at United Parcel Service (UPS) in the third quarter 1997 favorably
impacted Yellow Freight's revenue and operating income. Decreased tonnage and
shipments as well as higher casualty claims and expenses adversely impacted
financial results of the third quarter of 1998.
Saia's revenue grew to $87.9 million in the 1998 third quarter, up 6.7 percent
from $82.3 million in the 1997 third quarter. Operating income for Saia was
$6.7 million for the third quarter of 1998, compared with $6.2 million in the
1997 period. Saia's operating ratio was 92.3 for the third quarter versus 92.5
in the 1997 third quarter. Saia is an Atlanta-based regional carrier serving
the southeastern U.S., and continues to show strong growth rates.
WestEx, Yellow's regional carrier serving California, Colorado and much of the
southwestern U.S., reported revenue of $17.4 million for the 1998 third quarter,
up 35.6 percent from $12.8 million in the third quarter of 1997.
The company sold Preston Trucking, Inc. in the second quarter of 1998. The
income from operation of discontinued operations net of tax provision at Preston
Trucking was $940 thousand for the quarter ended September 30, 1997.
Interest expense fell between quarters as a result of reduced debt levels. The
effective tax rate was 42.2 percent in the third quarter 1998 compared to 38.5
percent in the third quarter 1997. The increased effective rate is largely due
to decreased income between quarters.
Comparison of Nine Months Ended September 30, 1998 and 1997
Income from continuing operations for the nine months ended September 30, 1998,
was $29.6 million, or $1.08 per share (diluted). Including the after-tax charge
from discontinued operations the net loss was $37.2 million, or $1.36 loss per
share (diluted). For the nine months ending September 30, 1997 income from
continuing operations was $41.3 million, or $1.45 per share (diluted), and net
income was $40.5 million, or $1.42 per share (diluted).
Operating revenue for the nine month period ended September 30, 1998 and 1997,
was $2.2 billion, no change between periods. The company's operating income for
the first nine months of 1998 was $60.5 million compared with operating income
of $79.8 million in the first nine months of 1997.
11
<PAGE> 12
Yellow Freight reported operating income of $47.6 million for the nine months
ended September 30, 1998, compared to $68.5 million for the nine months ended
September 30, 1997. Yellow Freight revenue was $1.9 billion for the nine month
period ended September 30,1998 and 1997. Yellow Freight's operating ratio was
97.4, compared with 96.4 in 1997.
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 improved in the
second and third quarter though they remained below 1997 levels.
Saia continued its strong growth, posting 1998 year to date revenue of $254.7
million, up 9.7 percent from $232.3 million in the first nine months of 1997.
Operating income for Saia was $18.0 million for the nine months of 1998,
compared with $14.5 million in the 1997 period. Saia's operating ratio was 92.9
for the first nine months in 1998 versus 93.7 in 1997.
WestEx, reported revenue of $47.8 million for the nine months ended September
30, 1998 versus $35.8 million for the same period in 1997.
The loss from operation of discontinued operations at Preston Trucking was $5.1
million, net of tax benefits of $2.8 million, for the nine months ended
September 30, 1998, compared to a loss of $.8 million, net of tax benefits of
$.7 million, for the nine months ended September 30, 1997. Preston was sold in
the second quarter of 1998. A one-time cost was incurred mostly in 1998
pertaining to a change in operations implemented in December 1997. Additionally,
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.
Interest expense fell between years as a result of reduced debt levels. The
effective tax rate was 42.0 percent year to date 1998 and 40.9 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, year 2000 issues, expense volatility and a downturn in general
economic activity.
12
<PAGE> 13
Yellow Freight System, Inc.
Financial Information
For the Quarter and Nine Months Ended September 30, 1998
(Amounts in thousands)
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------------ --------------
1998 1997 % 1998 1997 %
-------- -------- ---- ------ ------ ----
<S> <C> <C> <C> <C> <C> <C>
Operating revenue 639,627 666,217 (4.0) 1,862,242 1,905,953 (2.3)
Operating income 20,514 30,293 47,639 68,471
Operating ratio 96.8 95.5 97.4 96.4
Total assets at September 30 780,944 925,393
</TABLE>
<TABLE>
<CAPTION>
Third Quarter
Amount/Workday
Third Quarter --------------------------
1998 1997 % 1998 1997 %
-------- -------- ------ -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Workdays (64) (64)
Financial statement LTL 585,450 611,540 (4.3) 9,147.7 9,555.3 (4.3)
Revenue TL 54,310 55,237 (1.7) 848.6 863.1 (1.7)
Other (133) (560) (76.3) (2.1) (8.8) (76.3)
Total 639,627 666,217 (4.0) 9,994.2 10,409.6 (4.0)
Revenue excluding LTL 585,450 611,540 (4.3) 9,147.7 9,555.3 (4.3)
Revenue recognition TL 54,310 55,237 (1.7) 848.6 863.1 (1.7)
Adjustment Other 529 558 (5.2) 8.3 8.7 (5.2)
Total 640,289 667,335 (4.1) 10,004.6 10,427.1 (4.1)
Tonnage LTL 1,763 1,847 (4.6) 27.55 28.86 (4.6)
TL 379 383 (1.1) 5.91 5.98 (1.0)
Total 2,142 2,230 (4.0) 33.46 34.84 (4.0)
Shipments LTL 3,575 4,042 (11.5) 55.86 63.16 (11.5)
TL 51 52 (.9) .80 .81 (.9)
Total 3,626 4,094 (11.4) 56.66 63.97 (11.4)
Revenue/cwt. LTL 16.60 16.55 0.3
TL 7.17 7.22 (0.6)
Total 14.94 14.95 (0.1)
Revenue/shipment LTL 163.75 151.29 8.2
TL 1,058.20 1,066.49 (0.8)
Total 176.41 162.87 8.3
</TABLE>
13
<PAGE> 14
Saia Motor Freight Line, Inc.
Financial Information
For the Quarter and Nine Months Ended September 30, 1998
(Amounts in thousands)
<TABLE>
<CAPTION>
Third Quarter Nine Months
---------------- -------------------
1998 1997 % 1998 1997 %
------ ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
Operating revenue 87,852 82,307 6.7 254,702 232,278 9.7
Operating income 6,730 6,166 17,998 14,538
Operating ratio 92.3 92.5 92.9 93.7
Total assets at September 30 207,261 161,703
</TABLE>
<TABLE>
<CAPTION>
Third Quarter
Third Quarter Amount/Workday
---------------- -----------------------
1998 1997 % 1998 1997 %
------- ------- ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Workdays (64) (64)
Financial statement LTL 79,041 74,489 6.1 1,235.0 1,163.9 6.1
Revenue TL 8,811 7,818 12.7 137.7 122.2 12.7
Total 87,852 82,307 6.7 1,372.7 1,286.1 6.7
Revenue excluding LTL 79,054 74,577 6.0 1,235.2 1,165.3 6.0
Revenue recognition TL 8,812 7,827 12.6 137.7 122.3 12.6
Adjustment Total 87,866 82,404 6.6 1,372.9 1,287.6 6.6
Tonnage LTL 442 427 3.4 6.90 6.68 3.4
TL 145 135 6.9 2.26 2.11 6.9
Total 587 562 4.2 9.16 8.79 4.2
Shipments LTL 822 863 (4.8) 12.84 13.49 (4.8)
TL 15 14 5.5 .24 .22 5.5
Total 837 877 (4.6) 13.08 13.71 (4.6)
Revenue/cwt. LTL 8.95 8.72 2.6
TL 3.04 2.89 5.3
Total 7.49 7.32 2.3
Revenue/shipment LTL 96.21 86.40 11.4
TL 581.46 544.90 6.7
Total 105.00 93.90 11.8
</TABLE>
14
<PAGE> 15
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) - Financial Data Schedule (for SEC use only)
On November 4, 1998, the company announced that it will acquire Action Express,
Inc., a less-than-truck carrier serving the Pacific Northwest and West,
headquartered in Boise, Idaho. Action Express had 1997 revenue of $40.4 million
with operating income of $1.7 million.
(b) Reports on Form 8-K
The Company announced August 28, 1998 that its Board of Directors authorized a
repurchase of shares of the company's outstanding common stock with an aggregate
purchase price of up to $25 million. It is the third stock repurchase program
announced by the company since December 1997. The company's prior two $25
million stock repurchase programs involved the purchase of approximately 2.5
million shares.
The company announced, effective October 1, 1998, Yellow Freight System, Inc.,
the company's largest subsidiary, plans to increase rates on the approximate one
half of its revenue base not priced under term contracts.
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: November 12, 1998 /s/ A. Maurice Myers
-------------------------- -------------------------------------
A. Maurice Myers
Chairman of the Board of
Directors, President & Chief
Executive Officer
Date: November 12, 1998 /s/ H. A. Trucksess, III
-------------------------- --------------------------------------
H. A. Trucksess, III
Senior Vice President - Finance/
Chief Financial Officer &
Treasurer
16
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<FISCAL-YEAR-END> DEC-31-1998
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29,327
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