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, 1999
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 4, 1999)
Common stock, $.001 par value: 63,991,420 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, 1999 (unaudited) and
December 31, 1998 3 - 4
Condensed consolidated statements of
earnings (unaudited) for the three month
periods ended March 31, 1999 and 1998 5
Condensed consolidated statements of cash
flows (unaudited) for the three month
periods ended March 31, 1999 and 1998 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, except share data)
March 31, December 31,
1999 1998
-------- --------
(unaudited)
Assets
------
Current assets:
Cash $ 4,531 $ 6,530
Accounts receivable, net 123,640 118,555
Equipment sales receivable 1,537 5,262
Inventories and supplies 3,408 4,866
Prepaid taxes, licenses and insurance 16,721 15,228
Assets held for sale 5,468 5,468
Deferred income taxes 4,277 4,010
-------- --------
Total current assets 159,582 159,919
-------- --------
Property and equipment, at cost:
Revenue and service equipment 513,438 487,928
Land 8,464 8,409
Facilities and improvements 91,822 85,919
Furniture and office equipment 17,429 15,566
-------- --------
Total property and equipment 631,153 597,822
Less accumulated depreciation and amortization 142,278 131,045
-------- --------
Net property and equipment 488,875 466,777
-------- --------
Other assets 1,805 1,770
Goodwill 7,631 7,817
-------- --------
$657,893 $636,283
======== ========
See accompanying notes to condensed consolidated financial statements.
Continued
3
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
-------- --------
(unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 27,395 $ 27,100
Accrued liabilities 38,933 27,273
Current portion of claims accruals 27,018 23,788
Current portion of long-term debt 670 710
-------- --------
Total current liabilities 94,016 78,871
-------- --------
Borrowings under line of credit 118,500 128,000
Long-term debt, less current portion 15,890 15,208
Claims accruals, less current portion 27,715 28,091
Deferred income taxes 61,938 58,760
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
65,187,696 and 65,044,275 shares at
March 31, 1999 and December 31, 1998,
respectively 65 65
Additional paid-in capital 123,764 123,386
Retained earnings 229,021 216,918
-------- --------
352,850 340,369
Less treasury stock, at cost (1,323,075 shares at
March 31, 1999 and December 31, 1998.) 13,016 13,016
-------- --------
Total stockholders' equity 339,834 327,353
-------- --------
Commitments and contingencies
-------- --------
$657,893 $636,283
======== ========
</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,
1999 1998
----------- ----------
Operating revenue $ 234,944 $ 191,608
Operating expenses:
Salaries, wages and employee benefits 89,047 69,187
Operating supplies and expenses 21,008 17,522
Fuel 24,134 22,603
Purchased transportation 36,566 29,396
Rental expense 11,133 10,033
Insurance and claims 6,870 5,887
Depreciation and amortization 14,025 11,078
Communication and utilities 3,289 2,718
Operating taxes and licenses 7,040 6,248
----------- ----------
Total operating expenses 213,112 174,672
----------- ----------
Operating income 21,832 16,936
Other (income) expenses:
Interest expense 2,068 1,338
Interest income (130) (56)
Other (149) (163)
----------- ----------
Other (income) expenses, net 1,789 1,119
----------- ----------
Earnings before income taxes 20,043 15,817
Income taxes 7,940 6,405
----------- ----------
Net earnings $ 12,103 $ 9,412
=========== ==========
Basic earnings per share $ .19 $ .15
=========== ==========
Diluted earnings per share $ .19 $ .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,
1999 1998
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 12,103 $ 9,412
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 13,581 10,119
Deferred income taxes 2,911 1,091
Provision for losses on accounts receivable 300 90
Amortization of deferred compensation 68 48
Increase (decrease) in cash resulting from
changes in:
Accounts receivable (5,249) (3,792)
Inventories and supplies 1,458 31
Prepaid expenses (1,493) (8,134)
Other assets (35) (94)
Accounts payable, accrued liabilities
and claims accruals 14,809 14,671
--------- ---------
Net cash provided by operating activities 38,453 23,442
--------- ---------
Cash flows from investing activities:
Proceeds from sale of property and equipment 6,669 10,175
Capital expenditures (42,726) (51,059)
Payments received on equipment sale receivables 5,262 3,284
--------- ---------
Net cash used in investing activities (30,795) (37,600)
--------- ---------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Continued
6
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three months ended
March 31,
1999 1998
--------- ---------
<S> <C> <C>
Cash flows from financing activities:
Repayments of long-term debt (331) (2,042)
Increase (decrease) in borrowings under
line of credit (9,500) 19,500
Payment of stock split fractional shares (21)
Proceeds from issuance of common stock
under stock option plan 174 160
--------- ---------
Net cash provided by (used in) financing
activities (9,657) 17,597
--------- ---------
Net increase (decrease) in cash (1,999) 3,439
Cash at beginning of period 6,530 5,726
--------- ---------
Cash at end of period $ 4,531 $ 9,165
========= ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 2,068 $ 1,291
Income taxes $ 147 $ 2,630
Supplemental schedule of noncash investing
and financing activities:
Equipment sales receivables $ 1,537 $ 4,566
Direct financing for purchase of equipment $ 973 $ 436
</TABLE>
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 condensed consolidated
financial statements include all adjustments that 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, 1998. 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 March 15, 1999, the Company's Board of Directors approved a
3-for-2 stock split effected in the form of a stock dividend and
payable on April 10, 1999 to the stockholders of record at the
close of business on March 31, 1999. 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.
Year 2000 Issue
The Company has completed its comprehensive review of its Year 2000 issues and
has completed its initial review of internal systems (information technology
("IT") and non-IT). The majority of the Company's application software programs
are purchased from and maintained by vendors. Therefore, the Company is working
with these software vendors to verify that these applications become Year 2000
ready. The Company estimates the status of progress of these internal systems as
follows:
Vendor Modifications Testing Commenced
Being Performed
IT Systems 99% 95%
Non-IT Systems 95% 75%
The Company presently believes that with modifications and updates to existing
software, the cost
9
<PAGE>
of which is not expected to be material, the Year 2000 issue will not pose
significant operational problems for the Company's internal systems. The
Company's contingency plan in the event of a Year 2000 problem is to perform
tasks through telephonic communication, which the Company believes will allow it
to operate in the short term assuming power and telephone services are
functioning.
As part of the Company's comprehensive review, it is continuing to verify the
Year 2000 readiness of third parties (vendors and customers) with whom the
Company has material relationships. At present, the Company believes that its
material vendors and customers will be Year 2000 ready and the effect on the
Company's results of operations, liquidity, and financial condition will not be
material. The Company will continue to monitor the progress of its material
vendors and customers and formulate a contingency plan at that point in time
when the Company does not believe a material vendor or customer will be ready.
Overview
Although the trend in the truckload segment of the motor carrier industry over
the past several years has been toward 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 1,217 tractors to 7,273 tractors as of
March 31, 1999, up from 6,056 tractors as of March 31, 1998. The owner operator
portion of the Company's fleet increased to 1,324 as of March 31, 1999, from
1,028 as of March 31, 1998.
Results of Operations
Three Months Ended March 31, 1999 compared to Three Months ended March 31, 1998
Operating revenue increased $43.3 million, or 22.6%, to $234.9 million for the
three months ended March 31, 1999, from $191.6 million for the corresponding
period of 1998. The increase in operating revenue is primarily the result of the
expansion of the Company's fleet as a result of strong shipper demand.
The Company's operating ratio (operating expenses expressed as a percentage of
operating revenue) for the first quarter of 1999 was 90.7% compared to 91.2% in
the comparable period of 1998. The Company's operating ratio for the three
months ended March 31, 1999, decreased as a result of decreases in certain
components of operating expenses as a percentage of operating revenue as
discussed below. The Company's empty mile factor for linehaul operations was
14.00% and 14.06% and average loaded linehaul revenue per mile was $ 1.33 and
$1.32 in the first quarter of 1999 and 1998, respectively.
10
<PAGE>
Salaries, wages and employee benefits represented 37.9% of operating revenue for
the three months ended March 31, 1999 compared to 36.1% in 1998. The increase is
primarily due to a driver wage increase, which was effective April 1, 1998, and
an increase in the accrual for the Company's profit sharing contribution.
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 10.3% for the first quarter of
1999 versus 11.8% in 1998. The 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 nine cents per gallon in
the first quarter of 1999 versus the first quarter of 1998.
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 that 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 15.6% for the
three months ended March 31, 1999, compared to 15.3% in 1998. The increase is
due to the growth of the owner operator fleet to 1,324 as of March 31, 1999,
from 1,028 as of March 31, 1998.
Rental expense as a percentage of operating revenue was 4.7% for the first
quarter of 1999 versus 5.2% in 1998. At March 31, 1999 and 1998, leased tractors
represented 49% and 54%, respectively, of the total fleet of Company tractors.
In addition to the reduction in the percentage of tractors that were leased,
rental expense was positively impacted by a reduction in the number of leased
trailers as well as a slight reduction in the average lease rate for tractors in
the first quarter of 1999 versus the first quarter of 1998. 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 recorded $633,000 in the first quarter of 1999 and $971,000 during
the first quarter of 1998 in gains from the sale of leased tractors.
Depreciation and amortization expense as a percentage of operating revenue was
6.0% in the first quarter of 1999 versus 5.8% in 1998. 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, 1999, net
gains from the sale of revenue equipment reduced depreciation and amortization
expense by approximately $661,000 compared to approximately $809,000 in the
first quarter of 1998. Exclusive of gains, which reduced this expense,
depreciation and amortization
11
<PAGE>
expense as a percentage of operating revenue was 6.2% in the first quarter of
1999 and 1998.
Insurance and claims expense represented 2.9% and 3.1% of operating revenue in
the first quarter of 1999 and 1998, 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 that 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.
Income tax expense was recorded using an effective rate of 39.6% and 40.5% in
the first quarter of 1999 and 1998, respectively. This decrease is due to a
change in the mix of income between states.
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 $38.5 million in the first three
months of 1999 compared to $23.4 million in 1998. The increase is primarily
attributable to an increase in net earnings and depreciation and amortization
along with a smaller increase in prepaid expenses due to a significant portion
of the 1999 license fees being paid in 1998.
Net cash used in investing activities decreased to $30.8 million in the first
three months of 1999 from $37.6 million in 1998. The decrease is due primarily
to less capital expenditures in 1999 offset by decreased proceeds from the sale
of property and equipment.
As of March 31, 1999, the Company had commitments outstanding to acquire
replacement and additional revenue equipment for approximately $279 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 three months of 1999, the Company incurred approximately $8.0
million of non-revenue equipment capital expenditures. These expenditures were
primarily for facilities and equipment.
The Company anticipates that it will expend approximately $45 million during the
remainder of the year for various facilities upgrades and acquisition and
development of terminal facilities. Factors
12
<PAGE>
such as costs and opportunities for future terminal expansions may change the
amount of such anticipated expenditures.
The funding for capital expenditures has been and is anticipated to continue to
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 used in financing activities amounted to $9.7 million in the first
three months of 1999 compared to $17.6 million of cash provided by financing
activities in 1998. This decrease is primarily due to reduced borrowings under
the line of credit.
Management believes that it will be able to finance its needs for working
capital, facilities improvements and expansion, as well as anticipated fleet
growth, 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.
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,
1999.
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, 1999 /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,
1999 1998
--------- ---------
Net earnings $ 12,103 $ 9,412
========= =========
Weighted average shares:
Common shares outstanding 63,747 63,747
Common equivalent shares issuable
upon exercise of employee stock
options 1,370 1,407
--------- ---------
Diluted weighted average shares 65,117 65,154
========= =========
Basic earnings per share $ .19 $ .15
========= =========
Diluted earnings per share $ .19 $ .14
========= =========
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS AS OF MARCH 31,1999 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-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 4,531
<SECURITIES> 0
<RECEIVABLES> 123,640
<ALLOWANCES> 0
<INVENTORY> 3,408
<CURRENT-ASSETS> 159,582
<PP&E> 631,153
<DEPRECIATION> 142,278
<TOTAL-ASSETS> 657,893
<CURRENT-LIABILITIES> 94,016
<BONDS> 0
0
0
<COMMON> 65
<OTHER-SE> 339,769
<TOTAL-LIABILITY-AND-EQUITY> 657,893
<SALES> 234,944
<TOTAL-REVENUES> 234,944
<CGS> 0
<TOTAL-COSTS> 213,112
<OTHER-EXPENSES> (279)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,068
<INCOME-PRETAX> 20,043
<INCOME-TAX> 7,940
<INCOME-CONTINUING> 12,103
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,103
<EPS-PRIMARY> .19
<EPS-DILUTED> .19
</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 manufacturing) 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.
17
