See notes to condensed consolidated financial statements.

See notes to condensed consolidated financial statements.

NOTE B - LONG-TERM DEBT

As of June 30, 2000, the Company has outstanding borrowings of $127,000,000 under its existing $160,000,000 unsecured revolving line of credit. The proceeds of these borrowings were used for the purchase of revenue equipment and for the purchase and construction of customer center facilities. This agreement matures April 2003. At June 30, 2000, the amount available for borrowing under the line of credit was $33,000,000. In addition to this credit facility, the Company has a short-term, $15,000,000 unsecured revolving line of credit. Proceeds from borrowings under this agreement are available for working capital and general corporate purposes. This agreement matures May 2001. There were no borrowings outstanding at June 30, 2000 on this line of credit. This line of credit is also used to obtain letters of credit for the Company's self-insurance plan. At June 30, 2000, the Company had obtained letters of credit totaling $2,382,000 for this purpose.

As of June 30, 2000, the Company has outstanding borrowings of $117,250,000 under an unsecured and uncommitted Master Shelf Agreement which provides for the issuance of up to $190,000,000 of senior promissory notes with an average life not to exceed twelve years. In addition, the Company has outstanding an unsecured senior note for $10,000,000 payable in equal annual installments of $5,000,000 through November 2001.

The Company also has $20,000,000 of available borrowings at June 30, 2000, under a separate unsecured revolving credit agreement. Proceeds from borrowings under this agreement are available for working capital and general corporate purposes. There were no borrowings outstanding at June 30, 2000.

NOTE C - COMMITMENTS

Commitments for the purchase of revenue equipment and the purchase or construction of customer centers aggregated approximately $84,417,000 at June 30, 2000.

Net income for purposes of basic earnings per share and earnings per share--assuming dilution was $18,640,000 and $13,122,000 for the three month periods ended June 30, 2000 and 1999, respectively. For the six month periods ended June 30, 2000 and 1999, net income for purposes of basic earnings per share and earnings per share - assuming dilution was $32,017,000 and $19,897,000, respectively. A reconciliation of average shares outstanding for the periods is presented below:

On March 13, 2000, the Company entered into a long-term interest rate swap agreement, maturing April 2012, with a notional amount of $50,000,000 to effectively convert fixed rate interest to variable rate interest based upon LIBOR. The differential to be paid or received as interest rates change will be accrued and recognized as an adjustment of interest expense related to the debt. The fair value of the swap agreement and changes in the fair value as a result of changes in market interest rates, are not

NOTE F - RECENT ACCOUNTING PRONOUNCEMENTS

In March 2000, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 44 (FIN 44), Accounting of Certain Transactions involving Stock Compensation an interpretation of APB Opinion No. 25. FIN 44 clarifies the application of Opinion 25 for (1) the definition of employee for purposes of applying Opinion 25, (b) the criteria for determining whether a plan qualifies as a noncompensatory plan, (c) the accounting consequence of various modifications to the terms of a previously fixed stock nting for an exchange of stock compensation awards in a business combination.

FIN 44 is effective July 1, 2000, but certain conclusions cover specific events that occur after either December 15, 1998 or January 12, 2000. Management believes that the impact of FIN 44 will not have a material effect on the financial position or results of operations of the Company.

In June 1998, the FASB issued Statement of Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." The Statement has been amended by SFAS No. 137 and 138. It is effective for all quarters of fiscal years beginning after June 15, 2000. It establishes accounting and reporting standards requiring that every derivative instrument be recorded in the balance sheet as either an asset or liability at its fair value. The Company is currently evaluating the requirement

The following table sets forth, for the periods indicated, the percentages of operating expenses and other items to operating revenue:

Operating revenue for the six months ended June 30, 2000 was $682,130,000, up 22.6%, compared to $556,577,000 for the six months ended June 30, 1999. Operating revenue for the three months ended June 30, 2000 was $356,938,000, up 22.6%, compared to $291,173,000 for the three months ended June 30, 1999. The growth in operating revenue was primarily the result of increased tonnage from new and existing customers and increased revenue per hundred weight.

Tonnage handled by the Company during the six and three months ended June 30, 2000 increased 15.1% and 14.1% respectively, over the same time periods of 1999. This increase in tonnage was mainly a result of the following:

• Effective April 17, 2000, the Company increased its all-points coverage to 39 states with the additions of the states of Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.
• 1999 expansions which added all-points coverage to the states of New Jersey, Pennsylvania, North Dakota and South Dakota.
• The Company continued to increase its market penetration into existing service territories, particularly those geographic areas added during recent years. During 1995, the Company expanded its all-points coverage to the states of Colorado, Florida, Iowa, Nebraska, North Carolina, South Carolina and Wisconsin. 1996 expansions included the states of Delaware, Maryland, Minnesota, Virginia and West Virginia. 1997 and 1998 expansions included the states of New Mexico and Michigan, respectively.
• The first six months of 2000 included 129 revenue days, 2 more than the first six months of 1999. Tonnage per revenue day increased by 13.3% over the first six months of 1999. The second quarter of 2000 included the same number of revenue days as the second quarter of 1999. Tonnage per revenue day for the second quarter 2000 increased by 14.1% over the second quarter of 1999.

Revenue per hundred weight for the six months ended June 30, 2000 was up 6.5% from levels experienced in the six months ended June 30, 1999. The factors which most impacted revenue per hundred weight were:

• A general rate increase averaging 5.2% went into effect on October 1, 1999. The increase applied to the Company's interstate and intrastate common carrier freight rates published in its 5000 series tariff. The Company derives approximately 50% of its revenue from the 5000 tariff. The remaining revenue is derived from contracts and guarantees, which are negotiated throughout the year.
• During the first six months of 2000, 12.2% of the total tonnage was derived from truckload shipments, a decrease from 13.3% during the first six months of 1999. Rates on truckload tonnage are generally lower than less than truckload rates.
• The average length of haul per shipment increased by 4.3% to 629 miles during the second quarter of 2000 from 603 miles for the same time period of 1999.

Management expects that growth in operating revenue is sustainable in the near term. The major source of growth in operating revenue in the near term should be the further penetration of existing markets which includes the recent expansion into Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. On July 17, 2000, the Company increased its direct, all-points coverage to 40 states with the addition of Arizona. The Company's success in realizing future growth will be partially dependent upon the continued strength of the U.S. economy and the LTL pricing environment, as well as the other factors discussed under the caption "Forward-Looking Statements."

Operating expenses as a percentage of operating revenue improved to 91.0% for the six months ended June 30, 2000 from 92.9% in the six months ended June 30, 1999. Operating expenses as a percentage of operating revenue improved to 90.1% for the three months ended June 30, 2000 from 91.5% in the three months ended June 30, 1999. This overall improvement was primarily attributable to:

• Salaries, wages and benefits as a percentage of operating revenue improved to 59.1% in the six months ended June 30, 2000 from 60.7% in the six months ended June 30, 1999. This improvement resulted from ongoing educational programs and changes in operations which have led to productivity gains in the form of improved pickup and delivery density, increased line haul load factor and more direct line haul schedules.
• Depreciation and amortization as a percentage of operating revenue improved to 4.6% in the six months ended June 30, 2000 from 5.4% in the six months ended June 30, 1999. This improvement was largely due to the increased usage of operating lease financing of revenue equipment.

These improvements in operating expenses as a percentage of operating revenue were partially offset by increases in the following areas:

• Operating supplies and expenses as a percentage of operating revenue increased to 7.9% in the six months ended June 30, 2000 from 7.6% in the six months ended June 30, 1999. This increase was primarily due to increased costs of maintaining equipment and facilities. The increased fuel costs was neutralized by the Company's fuel surcharge which remains in effect and is accounted for as an offset to fuel costs. The fuel surcharge is tied to the Department of Energy's National Diesel Fuel Index and is designed to suspend at the time this national index moves below $1.15 per gallon.
• Rents and purchased transportation as a percentage of operating revenue increased to 6.3% in the six months ended June 30, 2000 from 6.2% in the six months ended June 30, 1999. For the quarter ended June 30, 2000 rents and purchased transportation as a percentage of operating revenue increased to 6.7% from 5.9% for the quarter ended June 30, 1999. This increase is the result of two principal reasons: 1) the increased usage of purchased transportation in selected line-haul lanes relative to overall mileage and 2) the increased usage of operating lease financing of revenue equipment. Management expects rents and purchased transportation as a percentage of operating revenue to remain at current levels.

Interest expense as a percentage of operating revenue decreased to 1.2% in the six months ended June 30, 2000, compared to 1.3% in the six months ended June 30, 1999. This improvement is primarily the result of revenue growth rate exceeding increases in debt and interest rates.

The effective tax rate of the Company was 39.7% and 40.5% for the six months ended June 30, 2000 and 1999, respectively. The reduction in the overall tax rate primarily results from state income tax reductions and incentives generated by business expansions. Net income for the six months ended June 30, 2000, was $32,017,000, up 60.9%, from $19,897,000 for the six months ended June 30, 1999. Net income for the three months ended June 30, 2000, was $18,640,000, up 42.1%, from $13,122,000 for the three months ended June 30, 1999.

LIQUIDITY AND CAPITAL RESOURCES

Capital requirements during the six months ended June 30, 2000 consisted of $74,415,000 in investing activities and $1,255,000 of financing activities. The Company invested $77,023,000 in capital expenditures during the six months ended June 30, 2000 comprised of $19,295,000 in additional revenue equipment, $42,042,000 in new customer center facilities or the expansion of existing facilities and $15,686,000 in other equipment. Management expects capital expenditures for the full year of 2000 will be approximately $160,000,000, consisting primarily of anticipated investments in new and existing customer center facilities. However, the actual amount of capital expenditures required in 2000 will be dependent on: 1) the growth rate of the Company, 2) site selection and construction progress on numerous customer center projects and 3) economic benefits of operating lease financing versus ownership. At June 30, 2000, the Company had commitments for land, customer centers, revenue and other equipment of approximately $84,417,000.

The Company provided for its capital resource requirements in the six months ended June 30, 2000 with cash from operations. Cash from operations totaled $74,282,000 during the six months ended June 30, 2000 compared to $40,664,000 provided by operations during the six months ended June 30, 1999. Net financing activities required an additional $1,255,000 of cash flow in the six months ended June 30, 2000. The primary sources of credit financing for the Company are: revolving lines of credit and the Master Shelf facility described below.

Management expects that the Company's existing working capital and its available lines of credit are sufficient to meet the Company's commitments as of June 30, 2000, and to fund current operating and capital needs. However, if additional financing is required, management believes it will be available.

The Company uses off-balance sheet financing in the form of operating leases primarily in the following areas; land and structures, revenue equipment and other equipment. At June 30, 2000, future rental commitments on operating leases were $189,801,000. The Company prefers to utilize operating leases for these areas and plans to use them in the future when such financing is available and suitable.

The industry in which the Company operates is undergoing consolidation, and, as a result, the Company is from time to time presented with opportunities to acquire the operations of other carriers. Should the Company choose to pursue any of these opportunities, it may issue securities and/or incur debt.

Future rental commitments on operating leases are as follows:

*The fair value is an estimated amount the Company would have paid at June 30, 2000 to terminate the agreement.

**LIBOR plus 0.955%

At June 30, 2000, the Company had no material outstanding inquiries with any state or federal environmental agency.

RECENT EVENTS

On July 17, 2000, the Company increased its direct, all-points coverage to 40 states with the addition of Arizona.

FORWARD-LOOKING STATEMENTS

The Management's Discussion and Analysis Section of this report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding possible or assumed future results of operations, anticipated capital expenditures and competition, as well as any statement proceeded by, followed by or containing the words "expects," "should," "believes" or similar expressions. These forward-looking statements are based on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside of management's control, that could cause actual results to differ materially from such statements. These include, but are not limited to: general economic and industry conditions and demand for goods, particularly such competition on pricing, revenues, and margins; the acceptance of service offerings that offer higher margins than traditional service offerings, costs of fuel and equipment and interest costs.

Market Risk under Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations is incorporated herein by reference.

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements (unaudited)

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Item 6.  Exhibits and Reports on Form 8-K

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.