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 June 30, 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
incorporation or organization) identification 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 (August 4, 1999)
Common stock, $.001 par value: 64,270,667 shares
Exhibit Index at Page 17
Total Pages 20
<PAGE>
PART I
FINANCIAL INFORMATION
Page
Number
------
Item 1. Financial statements
Condensed consolidated balance sheets
as of June 30, 1999 (unaudited) and
December 31, 1998 3 - 4
Condensed consolidated statements of
earnings (unaudited) for the three and six month
periods ended June 30, 1999 and 1998 5
Condensed consolidated statements of cash
flows (unaudited) for the six month
periods ended June 30, 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 - 14
Item 3. Quantitative and qualitative disclosures about
market risk 15
PART II
OTHER INFORMATION
Items 1, 2,
3 and 5. Not applicable
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 6. Exhibits and Reports on Form 8-K 17
2
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
June 30, December 31,
1999 1998
-------- ------------
(unaudited)
Assets
Current assets:
Cash $ 1,951 $ 6,530
Accounts receivable, net 150,284 118,555
Equipment sales receivable 5,699 5,262
Inventories and supplies 5,365 4,866
Prepaid taxes, licenses and insurance 12,462 15,228
Assets held for sale 5,468 5,468
Deferred income taxes 4,652 4,010
-------- --------
Total current assets 185,881 159,919
-------- --------
Property and equipment, at cost:
Revenue and service equipment 533,517 487,928
Land 8,464 8,409
Facilities and improvements 95,338 85,919
Furniture and office equipment 18,237 15,566
-------- --------
Total property and equipment 655,556 597,822
Less accumulated depreciation and amortization 148,945 131,045
-------- --------
Net property and equipment 506,611 466,777
-------- --------
Other assets 2,018 1,770
Goodwill 7,444 7,817
-------- --------
$701,954 $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)
June 30, December 31,
1999 1998
-------- ------------
(unaudited)
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 21,643 $ 27,100
Accrued liabilities 30,757 27,273
Current portion of claims accruals 24,859 23,788
Current portion of long-term debt 537 710
-------- --------
Total current liabilities 77,796 78,871
-------- --------
Borrowings under line of credit 152,500 128,000
Long-term debt, less current portion 15,725 15,208
Claims accruals, less current portion 30,230 28,091
Deferred income taxes 66,404 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 150,000,000 shares; issued
65,512,553 and 65,044,275 shares at
June 30,1999 and December 31, 1998,
respectively. 66 65
Additional paid-in capital 125,724 123,386
Retained earnings 246,525 216,918
-------- --------
372,315 340,369
Less treasury stock, at cost (1,323,075 shares) 13,016 13,016
-------- --------
Total stockholders' equity 359,299 327,353
-------- --------
Commitments and contingencies
-------- --------
$701,954 $636,283
======== ========
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)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
1999 1998 1999 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Operating revenue $ 262,531 $ 215,832 $ 497,475 $ 407,440
Operating expenses:
Salaries, wages and employee benefits 95,571 76,411 184,618 145,599
Operating supplies and expenses 22,946 20,886 43,954 38,408
Fuel 28,145 23,264 52,279 45,867
Purchased transportation 44,974 34,473 81,540 63,869
Rental expense 10,859 9,143 21,992 19,176
Insurance and claims 5,957 6,666 12,827 12,553
Depreciation and amortization 12,714 10,867 26,739 21,944
Communication and utilities 3,588 2,668 6,877 5,386
Operating taxes and licenses 7,037 6,368 14,077 12,616
--------- --------- --------- ---------
Total operating expenses 231,791 190,746 444,903 365,418
--------- --------- --------- ---------
Operating income 30,740 25,086 52,572 42,022
Other (income) expenses:
Interest expense 2,120 1,675 4,188 3,013
Interest income (21) (66) (151) (122)
Other (23) (114) (172) (277)
--------- --------- --------- ---------
Other (income) expenses, net 2,076 1,495 3,865 2,614
--------- --------- --------- ---------
Earnings before income taxes 28,664 23,591 48,707 39,408
Income taxes 11,160 9,555 19,100 15,960
--------- --------- --------- ---------
Net earnings $ 17,504 $ 14,036 $ 29,607 $ 23,448
========= ========= ========= =========
Basic earnings per share $ .27 $ .22 $ .46 $ .37
========= ========= ========= =========
Diluted earnings per share $ .27 $ .21 $ .45 $ .36
========= ========= ========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited)
(In thousands)
Six Months
Ended June 30,
-----------------------
1999 1998
--------- ---------
Cash flows from operating activities:
Net earnings $ 29,607 $ 23,448
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 25,167 19,514
Deferred income taxes 7,002 2,719
Provision for losses on accounts receivable 600 430
Amortization of deferred compensation 151 104
Increase (decrease) in cash resulting from
changes in:
Accounts receivable (32,327) (16,122)
Inventories and supplies (499) 1,872
Prepaid expenses 2,766 (4,729)
Other assets (312) (334)
Accounts payable, accrued liabilities
and claims accruals 1,237 25,320
--------- ---------
Net cash provided by operating activities 33,392 52,222
--------- ---------
Cash flows from investing activities:
Proceeds from sale of property and
equipment 18,965 34,044
Capital expenditures (88,255) (105,622)
Payments received on equipment sale receivables 5,262 3,284
--------- ---------
Net cash used in investing activities (64,028) (68,294)
--------- ---------
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)
Six Months
Ended June 30,
---------------------
1999 1998
-------- --------
Cash flows from financing activities:
Repayments of long-term debt (629) (4,505)
Increase in borrowings under line of credit 24,500 22,000
Payment of stock split fractional shares (9) (21)
Proceeds from issuance of common stock under
stock option and stock purchase plans 2,195 1,881
-------- --------
Net cash provided by financing activities 26,057 19,355
-------- --------
Net increase (decrease) in cash (4,579) 3,283
Cash at beginning of period 6,530 5,726
-------- --------
Cash at end of period $ 1,951 $ 9,009
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 3,942 $ 2,752
Income taxes $ 6,609 $ 6,421
Supplemental schedule of noncash investing
and financing activities:
Equipment sales receivables $ 5,699 $ 3,628
Direct financing for purchase of equipment $ 973 $ 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, 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 internal systems
(information technology ("IT") and non-IT) for potential Year 2000 issues. The
majority of the Company's application software programs are purchased from and
maintained by vendors. Therefore, the Company has worked with these software
vendors to verify these applications will be Year 2000 ready.
The Company presently believes the Year 2000 problem will not pose significant
operational problems for the Company's internal systems. The costs incurred in
addressing Year 2000 issues are not expected to be material, including internal
payroll costs which have not been separately accumulated. The Company's
contingency plan in the event of a Year 2000 problem is to perform tasks through
telephonic and fax 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 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 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 1,057 tractors to 7,455 tractors as of June
30, 1999 up from 6,398 tractors as of June 30, 1998. The owner operator portion
of the Company's fleet increased to 1,478 as of June 30, 1999 from 1,113 as of
June 30, 1998.
9
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THREE MONTHS ENDED JUNE 30, 1998
Operating revenue increased $46.7 million or 21.6% to $262.5 million for the
three months ended June 30, 1999 from $215.8 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 second quarter of 1999 was 88.3% compared to 88.4% in
the comparable period of 1998. The Company's operating ratio for the three
months ended June 30, 1999 improved as a result of changes 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 14.3% and 13.5% and
average loaded linehaul revenue per mile was $1.34 and $1.32 in the second
quarter of 1999 and 1998, respectively.
Salaries, wages and employee benefits represented 36.4% of operating revenue for
the three months ended June 30, 1999 compared with 35.4% in 1998. The increase
is primarily due to normal wage increases and associated benefits and taxes and
an increase in the accrual for the profit sharing contribution to the Company's
401(k) plan.
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.
10
<PAGE>
Fuel as a percentage of operating revenue was 10.7% for the second quarter of
1999 versus 10.8% in 1998. The decrease is due to an increase in the number of
owner operators who are responsible for their own fuel. Actual fuel cost per
gallon increased by approximately 5 cents per gallon in the second quarter of
1999 versus the second 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 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.
Purchased transportation as a percentage of operating revenue was 17.1% for the
three months ended June 30, 1999 compared to 16.0% in 1998. The increase is due
to the growth of the owner operator fleet to 1,478 as of June 30, 1999 from
1,113 as of June 30, 1998 and an increase in logistics and intermodal revenue.
Rental expense as a percentage of operating revenue was 4.1% for the second
quarter of 1999 versus 4.2% in 1998. At June 30, 1999 and 1998, leased tractors
represented 50% and 57 %, 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 recorded $1.0 million in the second quarter of 1999
and $1.5 million during the second quarter of 1998 from the sale of leased
tractors.
Depreciation and amortization expense as a percentage of operating revenue was
4.8% in the second quarter of 1999 versus 5.0% 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 June 30, 1999, net
gains from the sale of revenue equipment reduced depreciation and amortization
expense by approximately $1.9 million compared to approximately $1.7 million in
the second quarter of 1998. Exclusive of gains, which reduced this expense,
depreciation and amortization expense as a percentage of operating revenue was
5.6% and 5.8% in the second quarter of 1999 and 1998, respectively.
Insurance and claims expense represented 2.3% and 3.1% of operating revenue in
the second 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 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.
11
<PAGE>
SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998
Operating revenue increased $90.0 million or 22.1% to $497.5 million for the six
months ended June 30, 1999 from $407.4 million for the corresponding period of
1998. The increase in operating revenue is primarily the result of the expansion
of the Company's fleet and rate increases.
The Company's operating ratio (operating expenses expressed as a percentage of
operating revenue) for the first six months of 1999 was 89.4% compared to 89.7%
in the comparable period of 1998. The Company's operating ratio for the six
months ended June 30, 1999 improved as a result of the aforementioned increase
in operating revenue combined with changes 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 14.2% and 13.8% and average loaded
linehaul revenue per mile was $1.34 and $1.32 in the first six months of 1999
and 1998, respectively.
Salaries, wages and employee benefits represented 37.1% of operating revenue for
the six months ended June 30, 1999 compared with 35.7% in 1998. The increase is
primarily due to normal wage increases and associated benefits and taxes and an
increase in the accrual for the Company's profit sharing contribution.
Fuel as a percentage of operating revenue was 10.5% for the first six months of
1999 versus 11.3% in 1998. The decrease is due to an increase in the number of
owner operators who are responsible for their own fuel. Actual fuel cost per
gallon increased by approximately 2 cents per gallon in the first six months of
1999 versus 1998.
Purchased transportation as a percentage of operating revenue was 16.4% for the
six months ended June 30, 1999 compared to 15.7% in 1998. The increase is due to
the growth of the owner operator fleet to 1,478 as of June 30, 1999 from 1,113
as of June 30, 1998 and an increase in logistics and intermodal revenue.
Rental expense as a percentage of operating revenue was 4.4% for the first six
months of 1999 versus 4.7% in 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 $1.6 million
and $2.5 million in the first six months of 1999 and 1998 respectively, from the
sale of leased tractors.
Depreciation and amortization expense as a percentage of operating revenue was
5.4% in the first six months of 1999 and 1998. The Company includes gains and
losses from the sale of owned revenue equipment in depreciation and amortization
expense. During the six month period ended June 30, 1999, net gains from the
sale of revenue equipment reduced depreciation and amortization expense by
approximately $2.6 million compared to approximately $2.5 million in the first
six months of 1998. Exclusive of gains, which reduced this expense, depreciation
and amortization expense as a percentage of operating revenue was 5.9% and 6.0%
in the first six months of 1999 and 1998, respectively.
12
<PAGE>
Insurance and claims expense represented 2.6% and 3.1% of operating revenue in
the first six months of 1999 and 1998. 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.
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 $33.4 million in the first six
months of 1999 compared to $52.2 million in 1998. The decrease is primarily
attributable to an increase in accounts receivable and a reduced increase in
accounts payable, accrued liabilities and claims accruals offset by an increase
in net earnings and depreciation and amortization.
Net cash used in investing activities decreased to $64.0 million in the first
six months of 1999 from $68.3 million in 1998. The decrease is primarily due to
a decrease in capital expenditures, net of proceeds from the sale of property
and an increase in payments received on equipment sales receivable.
As of June 30, 1999, the Company had commitments outstanding to acquire
replacement and additional revenue equipment for approximately $232 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 six months of 1999, the Company incurred approximately $12.8
million of non-revenue equipment capital expenditures. These expenditures were
primarily for facilities and equipment.
The Company anticipates that it will expend approximately $35 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.
13
<PAGE>
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 provided by financing activities amounted to $26.1 million in the first
six months of 1999 compared to $19.4 million in 1998. This increase is primarily
due to a reduction in repayments of long term debt and increased borrowings
under the line of credit.
Management believes 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.
The Company is currently negotiating with financial institutions for an
additional financing facility with borrowings of up to $100 million. The Company
expects to have this facility in place during the third quarter of 1999.
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.
14
<PAGE>
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative Disclosure - There have been no material changes in the Company's
market risk during the six months ended June 30, 1999.
Qualitative Disclosure - This information is set forth on page 17 of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
and is incorporated herein by reference.
15
<PAGE>
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
PART II OTHER INFORMATION
ITEMS 1, 2,
3 AND 5. NOT APPLICABLE
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Stockholders was held on May 20,
1999. At the Annual Meeting, the stockholders elected William F.
Riley III and Lou A. Edwards to serve as Directors for three-year
terms. Jerry C. Moyes, Earl H. Scudder, Jr., Alphonse E. Frei and
Rodney K. Sartor continued as Directors after the meeting.
Additionally, the stockholders approved the adoption of a new 1999
Stock Option Plan, an amended Non-Employee Directors Stock Option
Plan and an amendment of the Company's Articles of Incorporation to
increase the authorized number of shares of Common Stock from
75,000,000 to 150,000,000.
Stockholders representing 40,441,877 shares or 95.05% were present
in person or by proxy at the Annual Meeting. A tabulation with
respect to each nominee and the other proposals is as follows:
Votes Against Broker Non
Votes Cast Votes For or Withheld Votes
---------- --------- ----------- ----------
William F. Riley III 40,441,877 40,227,845 214,032
Lou A. Edwards 40,441,877 40,277,447 164,430
Adoption of 1999 Stock
Option Plan 40,441,877 26,740,076 13,701,801
Amendment of the Non-
Employee Directors Stock
Option Plan 40,441,877 39,076,593 1,365,284
Amendment of Articles of
Incorporation to Increase
Authorized Shares of
Common Stock from
75,000,000 to 150,000,000 40,441,877 39,353,162 1,088,715
16
<PAGE>
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 June 30, 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: August 9, 1999 /s/ William F. Riley III
------------------------------
(Signature)
William F. Riley III
Chief Financial Officer
17
EXHIBIT 11
SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES
Schedule of Computation of Net Earnings Per Share
(in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
----------------- -----------------
1999 1998 1999 1998
---- ---- ---- ----
Net earnings $17,504 $14,036 $29,607 $23,448
======= ======= ======= =======
Weighted average shares:
Common shares outstanding 64,027 64,085 63,888 63,918
Common equivalent shares issuable
upon exercise of employee stock
options 1,145 1,222 1,274 1,313
------- ------- ------- -------
Diluted weighted average shares 65,172 65,307 65,162 65,231
======= ======= ======= =======
Basic earnings per share $ .27 $ .22 $ .46 $ .37
======= ======= ======= =======
Diluted earnings per share $ .27 $ .21 $ .45 $ .36
======= ======= ======= =======
18
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS AS OF JUNE 30,1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH STATEMENTS
</LEGEND>
<CIK> 863557
<NAME> SWIFT TRANSPORTATION CO., INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,951
<SECURITIES> 0
<RECEIVABLES> 150,284
<ALLOWANCES> 0
<INVENTORY> 5,365
<CURRENT-ASSETS> 185,881
<PP&E> 655,556
<DEPRECIATION> 148,945
<TOTAL-ASSETS> 701,954
<CURRENT-LIABILITIES> 77,796
<BONDS> 0
0
0
<COMMON> 66
<OTHER-SE> 359,233
<TOTAL-LIABILITY-AND-EQUITY> 701,954
<SALES> 497,475
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 444,903
<OTHER-EXPENSES> (323)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,188
<INCOME-PRETAX> 48,707
<INCOME-TAX> 19,100
<INCOME-CONTINUING> 29,607
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,607
<EPS-BASIC> .46
<EPS-DILUTED> .45
</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.
1. 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.
20
