SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
----------------------------------
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 March 31, 1998
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-18605
Swift Transportation Co., Inc.
(Exact name of registrant as specified in its charter)
Nevada 86-0666860
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) number)
2200 South 75th Avenue
Phoenix, AZ 85043
(602) 269-9700
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive office)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 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 the
filing requirements for at least 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 (May 5, 1998)
Common stock, $.001 par value: 42,706,950 shares
Exhibit Index at page 14
Total pages 17
<PAGE>
PART I
FINANCIAL INFORMATION
Page
Number
Item 1. Financial statements
Condensed consolidated balance sheets
as of March 31, 1998 (unaudited) and
December 31, 1997 3 - 4
Condensed consolidated statements of
earnings (unaudited) for the three month
periods ended March 31, 1998 and 1997 5
Condensed consolidated statements of cash
flows (unaudited) for the three month
periods ended March 31, 1998 and 1997 6 - 7
Notes to condensed consolidated financial
statements 8
Item 2. Management's discussion and analysis of
financial condition and results of
operations 9 - 13
PART II
OTHER INFORMATION
Items 1, 2,
3, 4 and 5. Not applicable
Item 6. Exhibits and Reports on Form 8-K 14
2
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
March 31, December 31,
1998 1997
-------- --------
(unaudited)
Assets
------
Current assets:
Cash $ 9,165 $ 5,726
Accounts receivable, net 96,530 92,587
Equipment sales receivables 4,566 3,284
Inventories and supplies 4,478 4,509
Prepaid taxes, licenses and insurance 13,224 5,090
Assets held for sale 5,468 5,468
Deferred income taxes 5,639 5,280
-------- --------
Total current assets 139,070 121,944
-------- --------
Property and equipment, at cost:
Revenue and service equipment 393,858 366,223
Land 7,730 7,520
Facilities and improvements 68,468 62,760
Furniture and office equipment 15,171 13,949
-------- --------
Total property and equipment 485,227 450,452
Less accumulated depreciation and amortization 119,837 111,917
-------- --------
Net property and equipment 365,390 338,535
Other assets 2,039 1,976
Goodwill 8,490 8,679
-------- --------
$514,989 $471,134
======== ========
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Balance Sheets (continued)
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------- --------
(unaudited)
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 17,535 $ 14,469
Accrued liabilities 29,384 20,177
Current portion of claims accruals 17,359 16,281
Current portion of long-term debt 5,988 6,849
-------- --------
Total current liabilities 70,266 57,776
-------- --------
Borrowings under line of credit 76,000 56,500
Long-term debt, less current portion 16,175 16,920
Claims accruals, less current portion 22,663 21,343
Deferred income taxes 45,870 44,420
Stockholders' equity:
Preferred stock, par value $.001 per share
Authorized 1,000,000 shares; none issued -- --
Common stock, par value $.001 per share
Authorized 75,000,000 shares; issued
42,967,710 and 42,793,557 shares at
March 31, 1998 and December 31, 1997, respectively 43 43
Additional paid-in capital 116,569 116,141
Retained earnings 170,819 161,407
-------- --------
287,431 277,591
Less treasury stock, at cost (331,050 shares) 3,416 3,416
-------- --------
Net stockholders' equity 284,015 274,175
-------- --------
Commitments and contingencies -------- --------
$514,989 $471,134
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(unaudited)
(In thousands, except share data)
Three months
ended March 31,
1998 1997
--------- ---------
Operating revenue $ 191,608 $ 156,074
Operating expenses:
Salaries, wages and employee benefits 69,187 55,282
Operating supplies and expenses 17,522 14,271
Fuel 22,603 22,368
Purchased transportation 29,396 20,346
Rental expense 10,033 11,550
Insurance and claims 5,887 5,063
Depreciation and amortization 11,078 8,507
Communication and utilities 2,718 2,393
Operating taxes and licenses 6,248 5,171
--------- ---------
Total operating expenses 174,672 144,951
--------- ---------
Operating income 16,936 11,123
--------- ---------
Other (income) expenses:
Interest expense 1,338 813
Interest income (56) (65)
Other (163) (106)
--------- ---------
Other (income) expenses, net 1,119 642
--------- ---------
Earnings before income taxes 15,817 10,481
Income taxes 6,405 4,250
--------- ---------
Net earnings $ 9,412 $ 6,231
========= =========
Basic earnings per share $ .22 $ .15
========= =========
Diluted earnings per share $ .22 $ .14
========= =========
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three months
ended March 31,
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 9,412 $ 6,231
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 10,119 8,507
Deferred income taxes 1,091 754
Provision for losses on accounts receivable 90 60
Amortization of deferred compensation 48 9
Change in assets and liabilities:
Increase in accounts receivable (3,792) (4,543)
Decrease in inventories and supplies 31 422
Increase in prepaid expenses (8,134) (8,378)
Increase in other assets (94) (712)
Increase in accounts payable, accrued liabilities
and claims accruals 14,671 6,633
-------- --------
Net cash provided by operating activities 23,442 8,983
-------- --------
Cash flows from investing activities:
Proceeds from sale of property and equipment 10,175 1,150
Capital expenditures (51,059) (21,217)
Payments received on equipment sales receivables 3,284 390
-------- --------
Net cash used in investing activities (37,600) (19,677)
-------- --------
</TABLE>
See accompanying notes to condensed consolidated financial statements
6
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (continued)
(unaudited)
(In thousands)
Three months
ended March 31,
1998 1997
-------- --------
Cash flows from financing activities:
Repayments of long-term debt $ (2,042) $ (4,756)
Increase in borrowings under line of credit 19,500 19,000
Payment of stock split fractional shares (21)
Proceeds from issuance of common stock
under stock option plan 160 282
-------- --------
Net cash provided by financing activities 17,597 14,526
-------- --------
Net increase in cash 3,439 3,832
Cash at beginning of period 5,726 1,210
-------- --------
Cash at end of period $ 9,165 $ 5,042
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 1,291 $ 826
Income taxes $ 2,630 $ 4,633
Supplemental schedule of noncash investing and
financing activities:
Equipment sales receivables $ 4,566 $ 4,213
Direct financing for purchase of equipment $ 436
See accompanying notes to condensed consolidated financial statements
7
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 1. Basis of Presentation
The condensed consolidated financial statements include the
accounts of Swift Transportation Co., Inc., a Nevada holding
company, and its wholly-owned subsidiaries (the Company). All
significant intercompany balances and transactions have been
eliminated.
The financial statements have been prepared in accordance with
generally accepted accounting principles, pursuant to rules and
regulations of the Securities and Exchange Commission. In the
opinion of management, the accompanying financial statements
include all adjustments which are necessary for a fair
presentation of the results for the interim periods presented.
Certain information and footnote disclosures have been condensed
or omitted pursuant to such rules and regulations. These condensed
consolidated financial statements and notes thereto should be read
in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997. Results of operations in
interim periods are not necessarily indicative of results to be
expected for a full year.
Note 2. Contingencies
The Company is involved in certain claims and pending litigation
arising from the normal course of business. Based on the knowledge
of the facts and, in certain cases, opinions of outside counsel,
management believes the resolution of claims and pending
litigation will not have a material adverse effect on the
financial condition of the Company.
Note 3. Stock Split
On February 20, 1998, the Company's Board of Directors approved a
3-for-2 stock split effected in the form of a stock dividend and
payable on March 12, 1998 to the stockholders of record at the
close of business on March 2, 1998. All share amounts, share
prices and earnings per share have been retroactively adjusted to
reflect this 3-for-2 stock split.
8
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Report on Form 10-Q contains forward-looking statements. The words
"believe," "expect," "anticipate," and "project," and similar expressions
identify forward-looking statements, which speak only as of the date the
statement was made. Such forward-looking statements are within the meaning of
that term in Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such statements may
include, but are not limited to, projections of revenues, income, or loss,
capital expenditures, plans for future operations, financing needs or plans, the
impact of inflation and plans relating to the foregoing.
Statements in Exhibit 99 to this Quarterly Report on Form 10-Q and in the
Company's Annual Report on Form 10-K, including Notes to the Consolidated
Financial Statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations," describe factors, among others, that could
contribute to or cause such differences. Additional factors that could cause
actual results to differ materially from those expressed in such forward-looking
statements are set forth in "Business" and "Market for the Registrant's Common
Stock and Related Stockholder Matters" in the Company's Annual Report on Form
10-K.
Overview
Although the trend in the truckload segment of the motor carrier industry over
the past several years has been towards consolidation, the truckload industry
remains highly fragmented. Management believes the industry trend towards
financially stable "core carriers" will continue and result in continued
industry consolidation. In response to this trend, the Company continues to
expand its fleet with an increase of 1,081 tractors to 6,056 tractors as of
March 31, 1998, up from 4,975 tractors as of March 31, 1997. This net fleet
growth was accomplished through a combination of internal growth and the
acquisition in April 1997 of 565 tractors from various lessors of Direct
Transit, Inc. The owner operator portion of the Company's fleet increased to
1,028 as of March 31, 1998 from 721 as of March 31, 1997.
Results of Operations
Operating revenue increased $35.5 million or 22.8% to $191.6 million for the
three months ended March 31, 1998 from $156.1 million for the corresponding
period of 1997. The increase in operating revenue is primarily the result of the
expansion of the Company's fleet, including the Direct Transit, Inc. revenue
equipment acquired in April 1997. The Company's freight rates
9
<PAGE>
increased by approximately 2.5% in the first quarter of 1998 compared to the
first quarter of 1997.
The Company's operating ratio (operating expenses expressed as a percentage of
operating revenue) for the first quarter of 1998 was 91.2% compared to 92.9% in
the comparable period of 1997. The Company's operating revenue and operating
ratio for the three months ended March 31, 1998 improved as a result of stronger
shipper demand in January and February, improvement in driver recruiting and
turnover, and reduced fuel expenses. The Company's empty mile factor for
linehaul operations was 14.1% and 14.3% and average loaded linehaul revenue per
mile was $1.32 and $1.30 in the first quarter of 1998 and 1997, respectively.
Significant differences in the components of operating expenses as a percentage
of operating revenue are explained below.
Salaries, wages and employee benefits represented 36.1% of operating revenue for
the three months ended March 31, 1998 compared with 35.4% in 1997. The increase
is primarily due to an increase in the accrual for the Company's profit sharing
contribution and normal wage increases and associated benefits and taxes.
From time to time the industry has experienced shortages of qualified drivers.
If such a shortage were to occur over a prolonged period and increases in driver
pay rates were to occur in order to attract and retain drivers, the Company's
results of operations would be negatively impacted to the extent that
corresponding rate increases were not obtained.
Fuel as a percentage of operating revenue was 11.8% for the first quarter of
1998 versus 14.3% in 1997. This decrease is partially due to an increase in the
number of owner operators who are responsible for their own fuel. In addition,
actual fuel cost per gallon decreased by approximately 18 cents per gallon in
the first quarter of 1998 versus the first quarter of 1997. This decrease in
cost per gallon resulted in an approximately $2.0 million reduction in fuel
surcharge revenue in the first quarter of 1998 compared to the first quarter of
1997. This reduction in fuel surcharge revenue reduced the decrease in fuel as a
percentage of operating revenue.
Increases in fuel costs, to the extent not offset by rate increases or fuel
surcharges, could have an adverse effect on the operations and profitability of
the Company. Management believes the most effective protection against fuel cost
increases is to maintain a fuel efficient fleet and to implement fuel surcharges
when such option is necessary and available. The Company currently does not use
derivative-type hedging products but is currently evaluating the possible use of
these products.
Purchased transportation as a percentage of operating revenue was 15.3% for the
three months ended March 31, 1998 compared to 13.0% in 1997. The increase is due
to the growth of the owner operator fleet to 1,028 as of March 31, 1998 from 721
as of March 31, 1997.
Rental expense as a percentage of operating revenue was 5.2% for the first
quarter of 1998 versus 7.4% in 1997. At March 31, 1998 and 1997, leased tractors
represented 54% and 62%, respectively, of the total fleet of Company tractors.
When it is economically advantageous to do so, the Company will purchase then
sell tractors that it currently leases by exercising the purchase option
contained in the lease. Gains on these activities are recorded as a reduction of
rent expense. The Company
10
<PAGE>
recorded $971,000 in the first quarter of 1998 and no gain during the first
quarter of 1997 from the sale of leased tractors.
Depreciation and amortization expense as a percentage of operating revenue was
5.8% in the first quarter of 1998 versus 5.5% in 1997. The Company includes
gains and losses from the sale of owned revenue equipment in depreciation and
amortization expense. During the three month period ended March 31, 1998, net
gains from the sale of revenue equipment reduced depreciation and amortization
expense by approximately $809,000 compared to approximately $875,000 in the
first quarter of 1997. Exclusive of gains, which reduced depreciation and
amortization expense, the percentage in the first quarter of 1998 and 1997 to
operating revenue was 6.2% and 6.0%, respectively. The increase in 1998 is due
to an increase in the number of tractors and trailers owned.
Insurance and claims expense represented 3.1% and 3.2% of operating revenue in
the first quarter of 1998 and 1997, respectively. The Company's insurance
program for liability, physical damage and cargo damage involves self-insurance
with varying risk retention levels. Claims in excess of these risk retention
levels are covered by insurance in amounts which management considers adequate.
The Company accrues the estimated cost of the uninsured portion of pending
claims. These accruals are estimated based on management's evaluation of the
nature and severity of individual claims and an estimate of future claims
development based on historical claims development trends.
Interest expense increased to $1,338,000 in the first quarter of 1998 from
$813,000 in 1997. This increase is due to a higher debt level.
Liquidity and Capital Resources
The continued growth in the Company's business requires significant investment
in new revenue equipment, upgraded and expanded facilities, and enhanced
computer hardware and software. The funding for this expansion has been from
cash provided by operating activities, proceeds from the sale of revenue
equipment, long-term debt, borrowings on the Company's line of credit, the use
of operating leases to finance the acquisition of revenue equipment and from
periodic public offerings of common stock.
Net cash provided by operating activities was $23.4 million in the first three
months of 1998 compared to $9.0 million in 1997. The increase is primarily
attributable to increased earnings and depreciation and an increase in accounts
payable, accrued liabilities and claims accruals.
Prepaid expenses increased by $8.1 million from December 31, 1997 to March 31,
1998. The increase is primarily due to significant annual license fees which are
prepaid in the first quarter of each year and amortized over the remainder of
the year.
Net cash used in investing activities increased to $37.6 million in the first
three months of 1998 from $19.7 million in 1997. The increase is due primarily
to more capital expenditures in 1998 offset in part by greater proceeds from the
sale of property and equipment.
11
<PAGE>
As of March 31, 1998, the Company had commitments outstanding to acquire
replacement and additional revenue equipment for approximately $141 million. The
Company has the option to cancel such commitments upon 60 days notice. The
Company believes it has the ability to obtain debt and lease financing and
generate sufficient cash flows from operating activities to support these
acquisitions of revenue equipment.
During the first quarter of 1998, the Company incurred approximately $7.4
million of non-revenue equipment capital expenditures. These expenditures were
primarily for facilities and equipment.
The Company anticipates that it will expend approximately $28 million during the
remainder of the year for various facilities upgrades and acquisition and
development of terminal facilities. Factors such as costs and opportunities for
future terminal expansions may change the amount of such expenditures.
The funding for capital expenditures has been and will be from a combination of
cash provided by operating activities, amounts available under the Company's
line of credit and debt and lease financing. The availability of capital for
revenue equipment and other capital expenditures will be affected by prevailing
market conditions and the Company's financial condition and results of
operations.
Net cash provided by financing activities amounted to $17.6 million in the first
quarter of 1998 compared to $14.5 million in 1997. This increase is primarily
due to a decrease in repayments of long term debt.
Management believes it will be able to finance its needs for working capital,
facilities improvements and expansion, as well as anticipated fleet growth,
through a combination of revenue equipment purchases and strategic acquisitions,
as opportunities become available, with cash flows from future operations,
borrowings available under the line of credit and with long-term debt and
operating lease financing believed to be available to finance revenue equipment
purchases. Over the long term, the Company will continue to have significant
capital requirements, which may require the Company to seek additional
borrowings or equity capital. The availability of debt financing or equity
capital will depend upon the Company's financial condition and results of
operations as well as prevailing market conditions, the market price of the
Company's common stock and other factors over which the Company has little or no
control.
Inflation
Inflation can be expected to have an impact on the Company's operating costs. A
prolonged period of inflation would cause interest rates, fuel, wages and other
costs to increase and would adversely affect the Company's results of operations
unless freight rates could be increased correspondingly. However, the effect of
inflation has been minimal over the past three years.
12
<PAGE>
Seasonality
In the transportation industry, results of operations generally show a seasonal
pattern as customers reduce shipments after the winter holiday season. The
Company's operating expenses also tend to be higher in the winter months
primarily due to colder weather which causes higher fuel consumption from
increased idle time.
13
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
PART II OTHER INFORMATION
Items 1, 2, 3, 4 and 5. Not applicable
Item 6. Exhibits and reports on Form 8-K
(a) Exhibit 11 - Schedule of Computation of Net
Earnings Per Share
Exhibit 27 - Financial Data Schedule
Exhibit 99 - Private Securities Litigation
Reform Act of 1995 Safe Harbor Compliance
Statement for Forward-Looking Statements
(b) No Current Reports on Form 8-K were filed
during the three months ended March 31,
1998.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Swift Transportation Co., Inc.
Date: May 7, 1998 /s/ William F. Riley III
----------------------------------------
(Signature)
William F. Riley III
Chief Financial Officer
14
EXHIBIT 11
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Schedule of Computation of Net Earnings Per Share
(in thousands, except per share amounts)
Three months
ended March 31,
1998 1997
------- -------
Net earnings $ 9,412 $ 6,231
======= =======
Weighted average shares:
Common shares outstanding 42,498 41,918
Common equivalent shares issuable
upon exercise of employee stock
options (1) 938 1,063
------- -------
Total weighted average shares -diluted 43,436 42,981
======= =======
Basic earnings per share $ .22 $ .15
======= =======
Diluted earnings per share $ .22 $ .14
======= =======
Notes:
(1) Amount calculated using the treasury stock method and fair market values.
(2) The 1997 share amounts and earnings per share have been retroactively
adjusted to reflect the 3-for-2 stock split payable on March 12, 1998 to
shareholders of record at the close of business on March 2, 1998.
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS AS OF March 31,1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH STATEMENTS
</LEGEND>
<CIK> 863557
<NAME> SWIFT TRANSPORTATION CO., INC.
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 9,165
<SECURITIES> 0
<RECEIVABLES> 96,530
<ALLOWANCES> 0
<INVENTORY> 4,478
<CURRENT-ASSETS> 139,070
<PP&E> 485,227
<DEPRECIATION> 119,837
<TOTAL-ASSETS> 514,989
<CURRENT-LIABILITIES> 70,266
<BONDS> 0
0
0
<COMMON> 43
<OTHER-SE> 283,972
<TOTAL-LIABILITY-AND-EQUITY> 514,989
<SALES> 191,608
<TOTAL-REVENUES> 191,608
<CGS> 0
<TOTAL-COSTS> 174,672
<OTHER-EXPENSES> (219)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,338
<INCOME-PRETAX> 15,817
<INCOME-TAX> 6,405
<INCOME-CONTINUING> 9,412
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,412
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
EXHIBIT 99
Private Securities Litigation Reform Act of 1995
Safe Harbor Compliance Statement for Forward-Looking Statements
In passing the Private Securities Litigation Reform Act of 1995 (the
"PSLRA"), Congress encouraged public companies to make "forward-looking
statements" (1) by creating a safe-harbor to protect companies from securities
law liability in connection with forward-looking statements. Swift
Transportation Co., Inc. ("Swift") intends to qualify both its written and oral
forward-looking statements for protection under the PSLRA.
To qualify oral forward-looking statements for protection under the PSLRA,
a readily available written document must identify important factors that could
cause actual results to differ materially from those in the forward-looking
statements. Swift provides the following information in connection with its
continuing effort to qualify forward-looking statements for the safe harbor
protection of the PSLRA.
Important factors currently known to management that could cause actual
results to differ materially from those in forward-looking statements include,
but are not limited to, the following: (i) excess capacity in the trucking
industry; (ii) significant increases or rapid fluctuations in fuel prices,
interest rates, fuel taxes, tolls, license and registration fees and insurance
premiums, to the extent not offset by increases in freight rates or fuel
surcharges; (iii) difficulty in attracting and retaining qualified drivers and
owner operators, especially in light of the current shortage of qualified
drivers and owner operators; (iv) recessionary economic cycles and downturns in
customers' business cycles, particularly in market segments and industries (such
as retail and paper products) in which the Company has a significant
concentration of customers; (v) seasonal factors such as harsh weather
conditions that increase operating costs; (vi) increases in driver compensation
to the extent not offset by increases in freight rates; (vii) the inability of
the Company to continue to secure acceptable financing arrangements; (viii) the
ability of the Company to continue to identify acquisition candidates that will
result in successful combinations; (ix) an unanticipated increase in the number
of claims for which the Company is self insured; and (x) a significant reduction
in or termination of the Company's trucking services by a key customer.
Forward-looking statements express expectations of future events. All
forward-looking statements are inherently uncertain as they are based on various
expectations and assumptions concerning future events and they are subject to
numerous known and unknown risks and uncertainties which could cause actual
events or results to differ materially from those projected. Due to these
inherent uncertainties, the investment community is urged not to place undue
reliance on forward-looking statements. In addition, Swift undertakes no
obligation to update or revise forward-looking statements to reflect changed
assumptions, the occurrence of unanticipated events or changes to projections
over time.
- --------
(1) "Forward-looking statements" can be identified by use of words
such as "expect," "believe," "estimate," "project,"
"forecast," "anticipate," "plan," and similar expressions.
17
