<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 16, 1997
REGISTRATION STATEMENT NO. 333-19637
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
USFREIGHTWAYS CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C>
DELAWARE 36-3790696
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
9700 HIGGINS ROAD, SUITE 570, ROSEMONT, ILLINOIS 60018 (847) 696-0200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-------------------------
JOHN CAMPBELL CARRUTH
USFREIGHTWAYS CORPORATION
9700 HIGGINS ROAD, SUITE 570
ROSEMONT, ILLINOIS 60018
(847) 696-0200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------------------
Copies to:
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<S> <C>
WILLIAM N. WEAVER, JR. ROBERT F. WALL
MISTY S. GRUBER R. CABELL MORRIS, JR.
SACHNOFF & WEAVER, LTD. WINSTON & STRAWN
30 S. WACKER DRIVE, 29TH FLOOR 35 W. WACKER DRIVE, SUITE 4200
CHICAGO, ILLINOIS 60606-7484 CHICAGO, ILLINOIS 60601
TELEPHONE NO. (312) 207-1000 TELEPHONE NO. (312) 558-5600
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
-------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 16, 1997
PROSPECTUS
2,700,000 SHARES
[USFREIGHTWAYS LOGO]
USFREIGHTWAYS CORPORATION
COMMON STOCK
($.01 PAR VALUE)
------------------------
This Prospectus covers 2,700,000 shares of common stock, par value $.01 per
share (the "Common Stock") of USFreightways Corporation (the "Company").
The Common Stock is traded on the Nasdaq National Market under the symbol
"USFC." On January 15, 1997, the last reported sale price of the Common Stock on
the Nasdaq National Market was $26 1/4 per share. See "Price Range of Common
Stock."
SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR A DISCUSSION OF CERTAIN MATTERS
THAT SHOULD BE CONSIDERED BY POTENTIAL INVESTORS.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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PRICE TO PROCEEDS TO
PUBLIC UNDERWRITING COMPANY(2)
DISCOUNT(1)
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<S> <C> <C> <C>
Per Share........................ $ $ $
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Total(3)......................... $ $ $
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</TABLE>
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(2) Before deducting offering expenses payable by the Company estimated at
$245,496.00.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
405,000 additional shares of Common Stock solely to cover over-allotments,
if any. If the Underwriters exercise this option in full, the total Price to
Public, Underwriting Discount and Proceeds to Company will be $ ,
$ , and $ , respectively. See "Underwriting."
------------------------
The shares of Common Stock are offered subject to receipt and acceptance by
the Underwriters, to prior sale and to the Underwriters' right to reject any
order in whole or in part and to withdraw, cancel or modify the offer without
notice. It is expected that delivery of share certificates will be made at the
offices of Merrill Lynch & Co., New York, New York on or about ,
1997.
------------------------
MERRILL LYNCH & CO. SCHRODER WERTHEIM & CO.
------------------------
The date of this Prospectus is , 1997.
<PAGE> 3
[Map of Regional Areas]
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY ENGAGE IN PASSIVE
MARKET TRANSACTIONS IN THE COMMON STOCK OF THE COMPANY ON THE NASDAQ NATIONAL
MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934.
SEE "UNDERWRITING."
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
<PAGE> 4
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), with the Securities
and Exchange Commission (the "Commission") with respect to the shares offered by
this Prospectus. This Prospectus does not contain all of the information set
forth in the Registration Statement and the exhibits and schedules thereto.
Statements contained herein concerning the provisions of any documents are not
necessarily complete and, in each instance, reference is made to the copy of
such documents filed as an exhibit to the Registration Statement, and each such
statement shall be deemed qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Commission. Such
reports, proxy statements and other information filed by the Company with the
Commission may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048; and Midwest
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Section of the Commission, at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Company is subject to the electronic filing
requirements of the Commission. Accordingly, pursuant to the rules and
regulations of the Commission, certain documents, including annual and quarterly
reports and proxy statements, filed by the Company with the Commission have been
or will be filed electronically. The Commission maintains a World Wide Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission at
http://www.sec.gov. The Company's Common Stock is listed on the Nasdaq National
Market under the symbol USFC, and such reports, proxy statements and other
information can also be inspected at the offices of the Nasdaq National Market,
Reports Section, 1735 Street, N.W., Washington, D.C. 20006. This Prospectus does
not contain all the information set forth in the Registration Statement and
exhibits thereto which the Company has filed with the Commission under the
Securities Act.
INFORMATION INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
30, 1995, the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 30, 1996, June 29, 1996, September 28, 1996, the Company's Current Report
on Form 8-K dated as of January 7, 1997, and the description of the Company's
Common Stock contained in the Company's Registration Statement on Form 8-A
declared effective February 12, 1992, each of which has been filed with the
Commission, are incorporated by reference in this Prospectus.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Common Stock
registered hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the respective dates of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
and superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the information that has been incorporated by reference in this
Prospectus, excluding exhibits. Such requests should be directed to
USFreightways Corporation, 9700 Higgins Road, Suite 570, Rosemont, Illinois
60018, Attention: Senior Vice President, Finance. Telephone: (847) 696-0200.
3
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information (including the consolidated financial statements and the notes
thereto) included elsewhere in this Prospectus and incorporated by reference
herein. Potential investors should carefully consider the factors set forth in
the section entitled "Risk Factors" and are urged to read this Prospectus in its
entirety. Unless otherwise indicated, all information contained in this
Prospectus assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting."
THE COMPANY
OVERVIEW
USFreightways Corporation (the "Company") is a leader in the regional less
than truckload ("LTL") general transportation business. The Company owns a group
of five regional, general commodities motor carriers, which focuses on overnight
and second-day freight delivery and provides service throughout the continental
United States, Hawaii, Alaska, and to certain points in Canada. Over 70% of the
Company's regional shipments are delivered within one day and over 95% within
two days. The Company's logistics subsidiaries provide specialized and dedicated
services in management and distribution. For the fiscal year ended December 30,
1995, the Company generated $1.14 billion of consolidated operating revenue and
$67.5 million of income from operations. During the four year period ended
December 30, 1995, operating revenue and income from operations grew at a
compound annual rate of 15.2% and 25.3%, respectively. Management believes that
its growth to date and prospects reflect a strategy that capitalizes on evolving
trends in the transportation industry.
Typically, LTL carriers transport freight along scheduled routes from
multiple shippers to multiple consignees utilizing a network of terminals,
together with fleets of line-haul and pick-up and delivery tractors and
trailers. Freight is picked up from customers by local drivers and consolidated
for shipment. The freight is then loaded into intercity trailers and transferred
by line-haul drivers to the terminal servicing the delivery area. There, the
freight is transferred to local trailers and delivered to its destination by
local drivers. At December 28, 1996, the Company maintained 239 terminals.
During the year ended December 28, 1996, the Company transported 11.6 million
shipments through the use of approximately 22,000 pieces of revenue equipment.
With these capital assets, management believes the Company is able to
effectively compete in the $19 billion LTL market, as estimated by Cass
Information Systems.
LTL operators are generally categorized as regional, interregional or
long-haul carriers, depending on the distance freight travels from pick-up to
final delivery. Regional carriers usually have average lengths of haul of 500
miles or less and tend to provide either overnight or second-day service.
Regional LTL carriers usually are able to load freight for direct transport to a
destination terminal, thereby avoiding the costly and time-consuming use of
breakbulk terminals (where freight is rehandled and reloaded to its ultimate
destination). In contrast, long-haul LTL carriers (average lengths of haul in
excess of 1,000 miles) operate networks of breakbulk and satellite terminals
(hub and spoke systems) and rely heavily on interim handling of freight.
Interregional carriers (500 to 1,000 miles per average haul) also rely on
breakbulk terminals but to a lesser degree than long-haul carriers.
Management believes that the regional LTL segment is the most attractive
segment of the LTL trucking industry both because customer distribution
strategies have shifted over time thereby increasing demand, and regional
carriers tend to be more cost competitive for this type of freight. Whereas in
the past shippers would send multiple shipments to multiple ultimate consignees
throughout the country via long-haul LTL carriers, they are increasingly sending
large quantities to a few distribution centers by truckload carriers and then
shipping to the ultimate consignees via regional LTL carriers. Also, freight in
general is moving over shorter distances. Management's industry information
indicates that approximately 70% of all general freight today is shipped 500
miles or less. Furthermore, management believes the regional LTL market has
attractive growth prospects, as significant barriers to entry exist, thereby
reducing competition from new entrants, due to (i) the
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substantial capital requirements for terminals and revenue equipment and (ii)
the need for a large, well-coordinated and skilled work force.
The Company is one of the largest regional LTL operators, having developed
a network of regional carriers throughout the United States, while retaining and
enhancing overall profitability. Management remains firmly committed to
increasing operating profitability and enhancing shareholder value. The table
below details the operating performance of the Company's regional carriers and
logistics operations.
REVENUE AND OPERATING RATIOS
UNAUDITED (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
OPERATING REVENUE OPERATING RATIO(a)
------------------- -------------------
OPERATING REVENUE OPERATING RATIO(A)
------------------- -------------------
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------------------- -----------------------------------------
09/30/95 09/28/96 09/30/95 09/28/96 09/30/95 09/28/96 09/30/95 09/28/96
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING COMPANY
(REGION)
USF Holland
(Midwest)............. $131,280 $153,725 91.9% 90.6% $397,250 $440,800 91.4% 91.4%
USF Red Star
(Northeast)........... 50,778 48,571 102.2 101.6 149,580 147,961 100.0 102.8
USF Reddaway (West
Coast, Northwest)..... 43,395 46,383 90.6 92.2 121,666 132,506 92.6 94.6
USF Bestway
(Southwest)........... 27,184 28,416 90.9 88.9 80,297 84,321 90.3 89.4
USF Dugan (Plains,
South)(b)............. 19,304 38,543 93.6 96.1 57,099 111,755 92.5 97.8
Logistics Operations.... 16,798 22,969 94.8 94.7 46,852 62,073 95.4 97.3
Other................... 1,225 4,596 3,336 9,581
-------- -------- -------- --------
Total Operating
Revenue............... $289,964 $343,203 $856,080 $988,997
======== ======== ======== ========
Income from
Operations............ $ 17,326 $ 22,528 $ 53,225 $ 50,171
======== ======== ======== ========
</TABLE>
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(a) Operating ratio is operating expenses as a percentage of operating revenue.
(b) Includes revenues resulting from the acquisition of the general commodities
business of Transus, Inc., effective as of January 1, 1996.
The Company believes that the increase in the demand for regional LTL
transportation services is a result of two market phenomena: (i) an increase in
shippers' desire to reduce costs in their supply chain; and (ii) an increase in
customers' material and inventory turnover. Shippers are increasingly using
regional distribution centers, consolidating or eliminating warehouses and
adopting other just-in-time or quick response distribution practices ("JIT/QR").
Industry sources estimate that the percentage of goods moved in the United
States using JIT/QR as a percentage of the total is expected to be approximately
35% in 1997, a three-fold increase from the 13% of goods moved using such
practices in 1990. The Company has addressed these changes in the patterns of
distribution by forming two operating entities, Comet Transport and Logix, to
respond to customers' evolving transportation needs. Comet Transport, an
interregional truckload carrier, ships freight between the Company's regions and
provides third party for-hire shipments. Logix, the Company's contract logistics
subsidiary, enables the Company to offer its customers a single source for
logistic management and dedicated carriage.
STRATEGY
Management's long-term operating and financial objectives include being the
leading regional LTL carrier, recognized for its premier service, and enhancing
its profitability. While significant accomplishments have been achieved since
the Company was established, management believes the Company is well positioned
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to further these objectives. As a result, management has developed a growth
strategy based on evolving customer and industry trends.
Management believes these trends include:
- An increasing emphasis by shippers toward limiting the number of
individual carriers they use to provide transportation services. The
effect of this "core carrier" focus is to increase the customer's
leverage with and, at the same time, dependence on certain specific
suppliers of transportation services;
- An increasing demand by shippers for enhanced quality and scope of
transportation services. This trend relates to not only traditional
qualitative service benchmarks such as on-time service and claims-free
delivery of goods, but also to increasing the level of value-added
information/technology associated with the provision of transportation
services such as inventory management, billing and logistics;
- Continued strong competition in the marketplace thereby elevating the
importance of maintaining both a strong financial position and a unit
cost advantage over other LTL providers; and
- Further consolidation within the trucking industry as well as the
possible convergence among suppliers of various modes of transportation
services. Over the past several years, there have been numerous mergers,
acquisitions and joint ventures within the trucking arena. Management
believes long-term benefits will accrue to the larger operators that
successfully integrate companies that possess diverse operational,
cultural and financial characteristics.
The trends highlighted above have been and continue to be evolving in the
trucking industry. Several years ago management embarked on a strategy to
capitalize on these trends. Management believes the Company is well positioned
to further exploit these opportunities. The Company's strategy, as described
below, illustrates its historical success and future plans in pursuing its
long-term financial and strategic objectives.
(i) Continue Geographic Expansion. After expanding operations to all
50 states in 1994, the Company began focusing on increasing the density of
coverage of its regional trucking companies, especially at USF Holland, its
largest operating subsidiary, with approximately 46% of the Company's
consolidated revenue in 1995. During 1995, the Company's regional LTL
companies increased the number of terminals by 20 over a dozen states
across the country.
During 1996, the Company increased its number of terminals by seven, and
began providing direct service into Ontario and Quebec, Canada, as well as
container service to Guam and the Caribbean. Early in 1996, the Company
dramatically increased density in the Southeast by acquiring the general
commodities business of Transus, Inc. and merged this operation into USF
Dugan. In February 1996, the Company merged two of the most dominant
carriers in their respective territories, United (covering the Northwest
and Rocky Mountain states) and USF Reddaway (covering the West Coast).
Management believes this consolidation has enhanced productivity and
customer service capabilities of the newly consolidated USF Reddaway
entity, which now has 55 terminals.
(ii) Broaden Service Offerings. The Company also has expanded into new
business activities through both internal growth and acquisitions. Three
examples include logistics, interregional LTL carriage and distribution.
Logix, the Company's newly renamed contract logistics business, provides
complete supply chain management services, from supplying raw materials to
delivering products to customers. Logix provides integrated logistics
solutions throughout the logistics pipeline, including dedicated carriage,
contract warehousing, inventory management, customer service, order
fulfillment, and freight management. Through client server platforms,
Logix's systems utilize communication links with satellites and computers
to manage transportation, dispatch and operations. In the initial design of
a customer's logistics needs, Logix uses decision support software to
provide solutions in such areas as transportation optimization, routing,
carrier selection, load planning and order optimization. In July 1996,
Logix acquired the Interamerican Group, a third party logistics provider
primarily in the contract warehousing business, whose customers include
Proctor & Gamble, Kimberly-Clark, Microsoft, Xerox, Alberto-Culver, and
Becton Dickinson.
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In 1995, the Company broadened its service capabilities with the launch of
Comet Transport, a premium, long-haul, expedited truckload carrier.
Management believes Comet Transport's operations complement its regional
LTL carriers by providing expedited service on interregional freight,
improve its ability to meet demanding delivery schedules and make the
Company more valuable to its customers, since the Company now offers
integrated long-haul truckload and regional LTL service.
Thirdly, the Company is positioning its USF Distribution Services business
to meet new demands. The business collects and ships components to
manufacturers and receives, sorts and moves merchandise from suppliers to
retail stores. In 1996, USF Distribution opened a fully automated freight
handling facility near Chicago which cost approximately $9 million. This
facility integrates state-of-the-art bar-code scanning, automated
sortation, full case order picking, and labeling systems to provide the
customer speed, accuracy, and flexibility in getting product to the market.
(iii) Develop Value-Added Technology. In an effort to continue to be a
leader in service quality, the Company has made significant investments in
value-added technology. Value-added is that which differentiates the
Company's products by reducing costs to both the Company and its customers.
The Company's strategy has been to invest in technology where a reasonable
return can be achieved. The Company is continuing to upgrade its computer
systems through implementation of a common operating platform and
communications infrastructure across all operating companies. The Company
now utilizes imaging systems that provide instant access to shipping and
other customer related documents that can be retrieved and directly faxed
in response to customer inquiries. Management believes its ability to
integrate and leverage information technology will continue to be a
significant factor in differentiating the Company from its competitors and
that its ability to capture, consolidate and provide access to timely and
accurate data will be as important to the Company's success as its ability
to move freight. Management believes yields are enhanced through its
investment in technology.
(iv) Remain a Low-Cost Provider. As competition in the LTL industry
remains fierce, management has executed an operating strategy of
maintaining a low-cost structure to enhance profitability. In the first
nine months of 1996, regional operating ratios ranged from a low of 89.4%
(USF Bestway) to a high of 102.8% (USF Red Star). Excluding USF Red Star's
operations, all regions produced positive operating margins. Management's
success is best evidenced by the profitability of its largest operation,
USF Holland. USF Holland generated 45% of total operating revenue in the
first nine months of 1996 with an operating ratio of 91.4%. This success is
due in part to USF Holland's strong brand recognition in the LTL
marketplace and its reputation for premier service quality.
The Company has been disappointed by USF Red Star's high operating ratio.
To restore profitability, management undertook a restructuring of its USF
Red Star subsidiary that included closing terminals, implementing strict
cost controls and increasing yields per shipment. The Company anticipates
that USF Red Star will report a small operating profit for the fourth
quarter of 1996.
(v) Seek Opportunistic Acquisitions. The fragmentation that has
historically characterized the trucking industry positions it for further
consolidation, and management has implemented a strategy to capitalize on
this trend. The recent acquisitions of Transus, Inc. and Interamerican
Group are examples of the implementation of this strategy. Given the
complexity associated with integrating operations, fleets and cultures into
the Company, the Company has been very selective when evaluating
opportunities. Management seeks acquisitions that enhance the Company's
brand, expand its service base, afford a favorable return on capital and
complement existing operations. Moreover, as customer demand shifts, the
Company may determine to expand beyond its core LTL truck haulage services
to other modes of transportation.
(vi) Maintain Financial Flexibility. Management's strategy is to
maintain financial flexibility through a strong balance sheet and access to
the public capital markets. This flexibility allows the Company to be
opportunistic in making selective acquisitions, purchasing equipment,
investing in facilities or expanding its business.
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As of December 28, 1996, the Company had approximately 15,400 employees, of
which 51% were members of unions. Approximately 88% of these union workers were
employed by USF Holland and USF Red Star and belonged to the International
Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America.
Management believes relationships with its employees are good. The Company's
executive offices are located at 9700 Higgins Road, Suite 570, Rosemont,
Illinois 60018. The Company's telephone number is (847) 696-0200.
RECENT DEVELOPMENTS
On January 16, 1997, the Company released information regarding its
performance for the 13 and 52 week periods ended December 28, 1996. Net income,
before a restructuring charge, for the thirteen weeks ended December 28, 1996,
was $10,297,000, equivalent to 45 cents per share. Net income for the quarter
was $7,968,000, equivalent to 35 cents per share, after a restructuring charge
at USF Red Star of 10 cents per share. This compares to net income of
$6,696,000, equivalent to 30 cents per share, for the same period of the
previous year. The restructuring charge at USF Red Star relates primarily to
ongoing lease commitments for terminals no longer occupied and severance pay
incurred in connection with the reduction of personnel. Revenue for the fourth
quarter of the current year increased 18.6% to $341,975,000 from $288,378,000
for the fourth quarter of 1995. LTL revenue for the Company's regional trucking
subsidiaries increased 16.4%, LTL shipments increased 14.9%, and LTL tonnage
increased 17.7%. LTL revenue per shipment increased from $97.37 in the fourth
quarter of last year to $98.61 for the current year's quarter, and weight per
shipment increased from 1,091 lbs. to 1,117 lbs.
Revenue for the Company's logistics businesses increased 36.5% from
$17,241,000 in the 1995 quarter to $23,528,000 in the current year's quarter.
Revenue for the 52 weeks ended December 28, 1996 increased 16.3% to
$1,330,972,000 from $1,144,458,000 for the same period of last year. Net income,
before the restructuring charge, for 1996 amounted to $33,807,000, equivalent to
$1.51 per share, and net income was $31,478,000, equivalent to $1.41 per share,
after the USF Red Star restructuring charge. This compares to net income of
$33,338,000, equivalent to $1.51 per share, for the 52 weeks ended December 30,
1995.
The operating ratios of the regional trucking group improved from 94.9% in
the 1995 quarter to 93.6% in the current year's quarter. At USF Holland, LTL
revenue increased 18.4% and the operating ratio was reduced from 92.6% in the
1995 quarter to 91.2% in the current year's quarter. USF Bestway experienced an
increase of 6.7% in LTL revenue, and its operating ratio, which continued to
improve, was 89.3% for the current year's quarter compared to 91.7% for the same
quarter of last year. At USF Red Star, despite a 5.2% reduction in total
revenue, the operating ratio improved from 104.3% in the 1995 quarter to 99.5%
in the current year's quarter. The improvement at USF Red Star resulted from an
increase in yield per shipment of 5.6% together with a significant reduction in
operating costs resulting from the implementation of strict cost controls.
Operating results at both USF Reddaway and USF Dugan were less than last year
for both the fourth quarter and the entire year. Management believes the merger
of USF Reddaway and United operations in 1996 has enhanced productivity and
customer service capabilities in the Northwest United States. The integration of
Transus into USF Dugan occurred in January 1996, and the Company now has
complete coverage in the Southeastern United States.
8
<PAGE> 10
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING INFORMATION
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-------------------------------------------------------- NINE MONTHS ENDED
52 WEEKS 53 WEEKS 52 WEEKS 52 WEEKS 52 WEEKS -------------------
DEC. 28 JAN. 2 JAN. 1 DEC. 31 DEC. 30 SEPT. 30 SEPT. 28
1991 1993 1994 1994 1995 1995 1996
-------- -------- -------- ---------- ---------- -------- --------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AND OPERATING STATISTICS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Operating Revenue...... $649,775 $774,678 $898,920 $1,016,464 $1,144,458 $856,080 $988,997
Income from
operations.......... 27,365 39,501 61,222 69,666 67,543 53,225 50,171
Interest expense,
net................. (31) (1,632) (7,391) (8,417) (8,177) (5,948) (8,584)
Other non-operating
expense............. (210) (1,067) (1,683) (2,011) (878) (537) (516)
-------- -------- -------- ---------- ---------- -------- --------
Net income from
continuing
operations before
income taxes........ 27,124 36,802 52,148 59,238 58,488 46,740 41,071
Net income from
continuing
operations.......... 14,814 20,804 28,545 33,356 33,338 26,642 23,510
Net income............. 14,872 6,902 27,348 32,065 33,338 26,642 23,510
Net income per share
from continuing
operations.......... $0.59 $0.78 $1.25 $1.51 $1.51 $1.20 $1.05
Net income per share... $0.59 $0.26 $1.20 $1.45 $1.51 $1.20 $1.05
Average shares
outstanding......... 25,200 26,882 22,853 22,142 22,123 22,144 22,312
OPERATING STATISTICS:
Total tons (000)....... 4,487 5,184 5,977 6,210 6,835 5,052 5,761
Total shipments
(000)............... 7,015 7,934 8,762 9,045 10,187 7,476 8,639
Revenue equipment...... 11,087 12,877 14,479 16,171 18,481 17,437 21,609
Employees.............. 8,811 9,721 11,089 12,184 13,187 13,387 15,393
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 28, 1996
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
<S> <C> <C>
BALANCE SHEET DATA:
Working Capital........................................................ $ 57,394 $
Total assets........................................................... 698,359
Long-term obligations, excluding current portion....................... 189,111
Stockholders' equity................................................... 262,362
</TABLE>
9
<PAGE> 11
RISK FACTORS
An investment in the Company's Common Stock involves a degree of risk. In
determining whether to make an investment in the Common Stock, potential
investors should consider carefully all of the information set forth and
incorporated into this Prospectus and, in particular, the following factors.
GENERAL ECONOMIC AND BUSINESS FACTORS
The Company's business is dependent upon a number of factors that may have
a material adverse effect on its results of operations, many of which are beyond
the Company's control. These factors include excess capacity in the trucking
industry, work stoppages by those Company employees who are members of unions,
significant increases or rapid fluctuations in fuel prices and interest rates,
to the extent not offset by increases in freight rates or fuel surcharges. The
Company's results of operations also are affected by global and national
economic cycles and in customers' business cycles. In addition, the Company's
results of operations are affected by seasonal factors such as post-holiday
reductions in shipments and increased operating costs and higher fuel
consumption in colder weather due to increased idle time.
COMPETITION
The trucking industry is extremely competitive and fragmented. The Company
competes with many other LTL carriers of varying sizes and, to a lesser extent,
with truckload carriers. Regional LTL carriers, including the Company's trucking
subsidiaries, principally compete against other regional LTL carriers. To a
lesser extent, they compete against interregional and long-haul LTL carriers,
and overnight package companies. Significant barriers to entry into the regional
LTL market exist as a result of the substantial capital requirements for
terminals and revenue equipment and the need for a large, well-coordinated and
skilled work force. In response to recent industry over-capacity, many LTL
carriers have adopted discounting programs for shipping customers. Additionally,
when new LTL competitors enter a geographic region, they often offer discounted
prices to lure customers away from the Company's trucking subsidiaries. Such
attempts to gain market share through rate reduction programs exert downward
pressure on the industry's price structure and profit margins and have caused
many LTL carriers to cease operations.
ACQUISITIONS
The growth of the Company has been, and may continue to be, dependent in
part upon the acquisition of small-to-medium sized trucking and logistics
companies throughout the United States. To date, the Company has been successful
in identifying companies to acquire and in integrating such companies'
operations into the Company's operations. The Company may face competition from
transportation companies or other third parties for acquisition opportunities
that become available. There can be no assurance that the Company will identify
further acquisition candidates that will result in successful combinations in
the future. Any future acquisitions by the Company may result in the incurrence
of additional debt and amortization of expenses related to goodwill and other
intangible assets, which could adversely affect the Company's profitability, or
could involve the potentially dilutive issuance of additional equity securities.
In addition, acquisitions involve numerous risks, including difficulties in the
assimilation of the acquired company's operations, particularly in the period
immediately following the consummation of such transactions, the diversion of
the attention of the Company's management from other business concerns, the risk
of entering into markets in which the Company has had no or only limited direct
experience, and the potential loss of customers, key employees and drivers of
the acquired company, all of which could have a material adverse effect on the
Company's business and operating results. Although the Company does not have any
commitments with respect to any acquisitions as of the date of this Prospectus,
the Company continually evaluates acquisition opportunities as part of its
growth strategy.
REGULATION
The Company is regulated by the United States Department of Transportation
and by various state agencies. These regulatory authorities exercise broad
powers, generally governing activities such as
10
<PAGE> 12
authorization to engage in motor carrier operations, operations, safety,
financial reporting, and certain mergers, consolidations and acquisitions. In
addition, the Company's operations are subject to various environmental laws and
regulations dealing with the transportation, storage, presence, use, disposal
and handling of hazardous materials, discharge of stormwater and underground
fuel storage tanks. If the Company suffers a spill or other accident involving
hazardous substances or if the Company were found to be in violation of
applicable laws or regulations, it could have a material adverse effect on the
Company's business and operating results.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus, including all documents incorporated herein by reference
contains forward-looking statements. Additional written or oral forward-looking
statements may be made by the Company from time to time in filings with the
Securities and Exchange Commission or otherwise. The words "believe," "expect,"
"anticipate," and "project" and similar expressions identify forward-looking
statements, which speak only as of the date the statement is 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, information regarding revenues, income or loss, capital
expenditures, acquisitions, plans for future operations, financing needs or
plans, the impact of inflation and plans relating to services of the Company, as
well as assumptions relating to the foregoing. Forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot be predicted
or quantified. Future events and actual results could differ materially from
those set forth in, contemplated by, or underlying the forward-looking
statements. Statements in this Prospectus, including those set forth in "The
Company" and "Risk Factors," and in "Business" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Company's
Annual Report on Form 10-K for the year ended December 30, 1995, which is
incorporated by reference herein, describe factors, among others, that could
contribute to or cause such differences.
11
<PAGE> 13
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
2,700,000 shares of Common Stock offered by the Company are estimated to be
approximately $ (approximately $ if the Underwriters' over-allotment
option is exercised in full), after deducting underwriting discounts and
estimated expenses of the offering. The Company intends to apply the net
proceeds of this offering to reduce its outstanding indebtedness under its
existing revolving credit facility. This credit facility, which had an
outstanding principal balance of $78.0 million at December 28, 1996, bears a
rate of interest based on LIBOR and expires on September 30, 2000. The weighted
average rate of interest on the outstanding balance at December 28, 1996 was
5.80%. The Company may in the future use amounts available under the credit
facility for general corporate and working capital purposes, including
investments in capital equipment and to fund acquisitions. Pending the use of
proceeds as described above, the net proceeds will be invested in short-term
interest bearing securities.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the Nasdaq National Market under
the trading symbol "USFC." The following table sets forth the quarterly high and
low sales prices of the Company's Common Stock as reported by the Nasdaq
National Market. The last sale price of the Common Stock on January 15, 1997 was
$26.250 per share.
<TABLE>
<CAPTION>
1995 HIGH LOW
- - ---- ------- -------
<S> <C> <C>
First Quarter............................................................. $28.688 $20.250
Second Quarter............................................................ $25.000 $18.125
Third Quarter............................................................. $24.375 $17.750
Fourth Quarter............................................................ $21.125 $16.250
</TABLE>
<TABLE>
<CAPTION>
1996 HIGH LOW
- - ---- ------- -------
<S> <C> <C>
First Quarter............................................................. $23.250 $18.250
Second Quarter............................................................ $24.250 $19.375
Third Quarter............................................................. $22.500 $16.750
Fourth Quarter............................................................ $28.250 $19.500
</TABLE>
<TABLE>
<CAPTION>
1997 HIGH LOW
- - ---- ------- -------
<S> <C> <C>
First Quarter (through January 15, 1997).................................. $28.000 $26.250
</TABLE>
As of December 28, 1996, there were approximately 4,000 beneficial owners
of an aggregate of 22,594,890 outstanding shares of Common Stock.
DIVIDEND POLICY
Since July 2, 1992, the Company has paid a quarterly dividend of $0.093333
per share. Although it is the present intention of the Company to continue
paying quarterly dividends, the timing, amount and form of future dividends will
be determined by the board of directors and will depend, among other things, on
the Company's results of operations, financial condition, cash requirements,
certain legal requirements and other factors deemed relevant by the board of
directors.
12
<PAGE> 14
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth the selected consolidated financial data for
the Company. The selected "Statement of Operations Data" and "Balance Sheet
Data" presented below for, and as of the end of, each of the years in the
five-year period ended December 30, 1995 are derived from consolidated financial
statements of the Company, which consolidated financial statements have been
audited by KPMG Peat Marwick LLP, independent certified public accountants. The
selected "Statement of Operations Data" and "Balance Sheet Data" presented below
for, and as of, the nine months ended September 30, 1995 and September 28, 1996
are derived from the unaudited interim consolidated condensed financial
statements of the Company which, in the opinion of management, have been
prepared on the same basis as the audited consolidated financial statements and
include all adjustments, consisting only of normal recurring adjustments, which
management considers necessary for a fair presentation of the financial data
shown. The results of operations for the nine months ended September 28, 1996
are not necessarily indicative of the results to be expected for the year ended
December 28, 1996. This information should be read in conjunction with the
consolidated financial statements and the notes thereto incorporated herein by
reference and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included in the Company's Annual Report on Form 10-K for
the year ended December 30, 1995 and in the Company's Quarterly Report on Form
10-Q for the quarter ended September 28, 1996, both of which are incorporated by
reference herein.
<TABLE>
<CAPTION>
AS OF AND FOR FISCAL YEAR ENDED AS OF AND FOR
-------------------------------------------------------- NINE MONTHS ENDED
52 WEEKS 53 WEEKS 52 WEEKS 52 WEEKS 52 WEEKS -------------------
DEC. 28 JAN. 2 JAN. 1 DEC. 31 DEC. 30 SEPT. 30 SEPT. 28
1991 1993 1994 1994 1995 1995 1996
-------- -------- -------- ---------- ---------- -------- --------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating Revenue.................... $649,775 $774,678 $898,920 $1,016,464 $1,144,458 $856,080 $988,997
Operating expenses:
Salaries, wages and benefits....... 419,062 497,375 568,891 633,197 733,441 546,207 630,513
Purchased transportation........... 18,194 26,829 31,526 42,427 43,763 33,163 35,863
Operating expenses and supplies.... 83,621 97,729 109,525 125,936 144,702 107,655 133,592
Operating taxes and licenses....... 25,024 29,808 35,682 42,101 48,585 36,234 41,932
Insurance claims................... 11,745 13,369 16,039 18,012 17,556 13,749 17,010
Communication and utilities........ 9,387 10,024 10,489 12,247 13,337 9,937 11,475
Depreciation and equipment
leases........................... 34,036 37,623 44,209 47,519 50,866 37,332 48,099
Building and office equipment
rents............................ 9,021 10,690 11,361 13,485 13,283 9,962 11,554
Amortization of intangible
assets........................... 6,487 5,391 3,038 3,020 2,583 2,001 1,821
Other operating expenses........... 5,833 6,339 6,938 8,854 8,799 6,615 6,967
-------- -------- -------- ---------- ---------- -------- --------
Total operating expenses............. 622,410 735,177 837,698 946,798 1,076,915 802,855 938,826
-------- -------- -------- ---------- ---------- -------- --------
Income from operations............... 27,365 39,501 61,222 69,666 67,543 53,225 50,171
-------- -------- -------- ---------- ---------- -------- --------
Non-operating income (expense):
Interest expense................... (2,546) (2,024) (7,621) (9,081) (8,884) (6,491) (9,072)
Interest income.................... 2,515 392 230 664 707 543 488
Other, net......................... (210) (1,067) (1,683) (2,011) (878) (537) (516)
-------- -------- -------- ---------- ---------- -------- --------
Total non-operating expenses......... (241) (2,699) (9,074) (10,428) (9,055) (6,485) (9,100)
-------- -------- -------- ---------- ---------- -------- --------
Net income from continuing operations
before income taxes................ 27,124 36,802 52,148 59,238 58,488 46,740 41,071
Income tax expense................... (12,310) (15,998) (23,603) (25,882) (25,150) (20,098) (17,561)
-------- -------- -------- ---------- ---------- -------- --------
Net income from continuing
operations......................... 14,814 20,804 28,545 33,356 33,338 26,642 23,510
Discontinued operations, net......... 58 288 (1,197) -- -- -- --
Extraordinary item, net.............. -- -- -- (1,291) -- -- --
Cumulative effect of accounting
change for income taxes............ -- (14,190) -- -- -- -- --
-------- -------- -------- ---------- ---------- -------- --------
Net income........................... $ 14,872 $ 6,902 $ 27,348 $ 32,065 $ 33,338 $ 26,642 $ 23,510
======== ======== ======== ========== ========== ======== ========
Net income per share from continuing
operations......................... $0.59 $0.78 $1.25 $1.51 $1.51 $1.20 $1.05
Net income per share................. $0.59 $0.26 $1.20 $1.45 $1.51 $1.20 $1.05
Average shares outstanding........... 25,200 26,882 22,853 22,142 22,123 22,144 22,312
BALANCE SHEET DATA:
Working capital...................... $ 23,442 $ 23,680 $ 25,026 $ 26,168 $ 30,127 $ 30,215 $ 57,394
Total assets......................... 388,447 406,837 460,780 501,002 578,194 569,604 698,359
Long-term obligations, less current
portion............................ 12,691 47,024 124,085 105,667 137,333 126,417 189,111
Stockholders' equity................. 205,780 229,779 180,509 208,094 233,152 227,935 262,362
</TABLE>
13
<PAGE> 15
MANAGEMENT
The following table sets forth information with respect to the directors
and executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- - ----------------------------------- ---- ---------------------------------------------------
<S> <C> <C>
Morley Koffman..................... 66 Chairman of the Board of Directors
John Campbell Carruth.............. 66 Chief Executive Officer, President and Director
William N. Weaver, Jr. ............ 62 Director
Robert P. Neuschel................. 78 Director
Neil A. Springer................... 58 Director
Robert V. Delaney.................. 61 Director
John W. Puth....................... 68 Director
Christopher L. Ellis............... 52 Senior Vice President, Finance and Chief Financial
Officer
</TABLE>
MORLEY KOFFMAN, has been a director of the Company since December 1991. He
was elected Chairman of the Board in January of 1992. Mr. Koffman was a member
of the law firm of Freeman & Company of Vancouver, British Columbia until March
31, 1993. Effective April 1, 1993, he became a member of Koffman Birnie & Kalef.
Mr. Koffman is a director of Ainsworth Lumber Co. Ltd. and Westar Group Ltd.
JOHN CAMPBELL CARRUTH, was appointed as the Company's Chief Executive
Officer and President in June 1991 and has been a director of the Company since
December 1991. Mr. Carruth was Chief Executive Officer and President of TNT
Transport Group Inc., a subsidiary of TNT Limited, the Company's former parent
corporation, from 1985 to 1992.
WILLIAM N. WEAVER, JR., has been a director of the Company and the
Company's Assistant Secretary since March 1992. Mr. Weaver is a member of the
law firm of Sachnoff & Weaver, Ltd., an Illinois professional corporation, which
is outside counsel to the Company. Mr. Weaver has practiced law in the State of
Illinois since 1964 and serves as a director of System Software Associates, Inc.
as well as several privately-held corporations. He holds an A.B. degree from
Oberlin College and a J.D. from John Marshall Law School.
ROBERT P. NEUSCHEL, has been a director of the Company since December 1991.
Since 1978, Professor Neuschel has been Professor of Management at the J. L.
Kellogg Graduate School of Management, where he is currently Professor of
Corporate Governance and Associate Dean for Advisory Board Relations. From 1978
to December 1991, he was Managing Director of the Transportation Center at
Northwestern University.
NEIL A. SPRINGER, has been a director of the Company since December 1991.
He has been Managing Director of Springer Souder & Associates since June 1994.
He was Senior Vice President of Slayton International Inc. from September 1992
to May 1994. He was President-Central Region of Alexander Proudfoot Company from
August 1991 to August 1992. Mr. Springer is a director of Idex Corporation and
Dorsey Trailers, Inc.
ROBERT V. DELANEY, has been a director of the Company since December 1991.
Mr. Delaney has been an Executive Vice President of Cass Information Systems
since January 1990.
JOHN W. PUTH, has been a director of the Company since January 1992. Mr.
Puth has been President of J. W. Puth Associates since December 1987, Chairman
of American Lantern since December 1987, and Chairman of the Executive Committee
of Sullivan Graphics since June 1992. Mr. Puth is a director of A.M. Castle &
Co., Allied Products Co., Brockway Standard Holdings Corporation, L. B. Foster
Inc., Lindberg Corporation, System Software Associates, Inc. and several private
manufacturing companies.
CHRISTOPHER L. ELLIS, has been Senior Vice President, Finance and Chief
Financial Officer of the Company since June 1991. Mr. Ellis served as Vice
President, Finance of TNT Transport Group, Inc., a subsidiary of TNT Limited,
the Company's former parent corporation, from 1985 to 1992.
14
<PAGE> 16
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement among
the Company and the Underwriters (the "Purchase Agreement"), the Company has
agreed to sell to each of the Underwriters named below (the "Underwriters"), and
each of the Underwriters has severally agreed to purchase from the Company, the
aggregate number of shares of Common Stock set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
- - ------------ ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................................
Schroder Wertheim & Co. Incorporated.............................................
---------
Total....................................................................... 2,700,000
=========
</TABLE>
In the Purchase Agreement, the Underwriters have severally agreed, subject
to the terms and conditions set forth therein, to purchase all of the shares of
Common Stock offered hereby (other than those subject to the over-allotment
option described below) if any are purchased.
The Company has been advised by the Underwriters that the Underwriters
propose initially to offer the shares of Common Stock to the public at the
public offering price set forth on the cover page of this Prospectus, and to
certain dealers at such price less a concession not in excess of $ per
share. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $ per share to certain other dealers. After commencement
of the offering, the price to the public and concessions to dealers may be
changed.
The Company has granted the Underwriters an option, exercisable within 30
days of the date of this Prospectus, to purchase up to 405,000 additional shares
of Common Stock to cover over-allotments, if any, at the price to the public
less the underwriting discount set forth on the cover page of this Prospectus.
To the extent that the Underwriters exercise such option, in whole or in part,
each Underwriter will have a firm commitment, subject to certain conditions, to
purchase the same proportion of the option shares that the number of shares of
Common Stock to be purchased by such Underwriter in the above table bears to the
total number of shares of Common Stock offered by the Underwriters hereby.
The Purchase Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or contribute to payments the Underwriters may be required to
make in respect thereof.
The Company has agreed with the Underwriters that they will not offer, sell
or contract to sell, or otherwise dispose of, directly or indirectly, or
announce an offering of, any shares of Common Stock or any securities
convertible into, or exchangeable for, shares of Common Stock or any securities
convertible into, or exchangeable for, shares of Common Stock for a period of 90
days from the date of this Prospectus, without the prior written consent of
Merrill Lynch & Co., except for grants of options and issuance and sales of
Common Stock issued pursuant to any existing stock option or other benefit or
incentive plans maintained for its officers, directors or employees or the
issuance of Common Stock in connection with acquisitions.
In connection with this offering, certain Underwriters may engage in
passive market making transactions in the Common Stock on the Nasdaq National
Market in accordance with Rule 10b-6A under the Exchange Act, during the two
business day period before commencement of offers or sales of the Common Stock
offered
15
<PAGE> 17
hereby. Passive market making transactions must comply with certain volume and
price limitations and be identified as such. In general, a passive market maker
may display its bid at a price not in excess of the highest independent bid for
the security and if all independent bids are lowered below the passive market
maker's bid then such bid must be lowered when certain purchase limits are
exceeded.
LEGAL MATTERS
The validity of the shares of Common Stock and certain other legal matters
in connection with the offering will be passed upon for the Company by Sachnoff
& Weaver, Ltd., Chicago, Illinois. Mr. William N. Weaver, Jr., a shareholder of
Sachnoff & Weaver, Ltd. serves as a director of the Company. Certain legal
matters relating to this offering will be passed upon for the Underwriters by
Winston & Strawn, Chicago, Illinois.
EXPERTS
The consolidated financial statements of USFreightways Corporation as of
December 30, 1995 and December 31, 1994 and for each of the years in the
three-year period ended December 30, 1995 have been incorporated herein by
reference in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, also incorporated by reference herein, and given
upon the authority of said firm as experts in accounting and auditing.
16
<PAGE> 18
BACK INSIDE COVER
[PICTURES OF COMPANY FACILITIES]
<PAGE> 19
------------------------------------------------------
------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH
INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information................. 3
Information Incorporated by
Reference........................... 3
Prospectus Summary.................... 4
The Company........................... 4
Recent Developments................... 8
Summary Consolidated Financial and
Operating Information............... 9
Risk Factors.......................... 10
Use of Proceeds....................... 12
Price Range of Common Stock........... 12
Dividend Policy....................... 12
Selected Consolidated Financial
Data................................ 13
Management............................ 14
Underwriting.......................... 15
Legal Matters......................... 16
Experts............................... 16
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
2,700,000 SHARES
USFREIGHTWAYS CORPORATION
COMMON STOCK
($.01 PAR VALUE)
---------------------------
PROSPECTUS
---------------------------
[USFREIGHTWAYS LOGO]
MERRILL LYNCH & CO.
SCHRODER WERTHEIM & CO.
, 1997
------------------------------------------------------
------------------------------------------------------
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses (other than
underwriting discounts and commissions) payable by the Company in connection
with the sale of the Common Stock being registered hereby. All of the amounts
shown are estimated, except the SEC registration fee, the NASD filing fee and
the Nasdaq National Market supplemental listing fee.
<TABLE>
<S> <C>
SEC registration fee............................................. $ 28,074.00
NASD filing fee.................................................. 8,922.00
Nasdaq National Market supplemental listing fee.................. 17,500.00
*Printing expenses............................................... 77,500.00
*Legal fees and expenses......................................... 75,000.00
*Accounting fees and expenses.................................... 29,000.00
*Blue Sky fees and expenses...................................... 4,500
*Miscellaneous expenses.......................................... 5,000
-----------
Total....................................................... $245,496.00
===========
</TABLE>
- - -------------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware permits
indemnification of directors, officers, employees and agents of corporations
under certain conditions and subject to certain limitations. Section 13.1 of
Article Thirteen of the Company's By-Laws provides for indemnification of any
director, officer, employee or agent of the Company, or any person serving in
the same capacity in any other enterprise at the request of the Company, under
certain circumstances. Article Six of the Company's Amended and Restated
Certificate of Incorporation eliminates the liability of directors of the
Company under certain circumstances for breaches of fiduciary duty to the
Company and its shareholders.
Directors and officers of the Company are insured, at the expense of the
Registrant, against certain liabilities which might arise out of their
employment and which might not be subject to indemnification under the By-Laws.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following documents are filed herewith or incorporated herein by
reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- - ------ ------------------------------------------------------------------------------------
<C> <S>
* 1.1 Form of Purchase Agreement
4.2 Form of Indenture dated as of May 1, 1993 between USFreightways Corporation
(formerly known as TNT Freightways Corporation) and Harris Trust and Savings Bank,
as Trustee (incorporated by reference from USFreightways Corporation's Registration
Statement on Form S-1, filed on April 16, 1993, Registration No. 33-61134.
5 Opinion of Sachnoff & Weaver, Ltd.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Sachnoff & Weaver, Ltd. (included in Exhibit 5)
* 24. Powers of Attorney
</TABLE>
- - -------------------------
* Previously filed.
II-1
<PAGE> 21
ITEM 17. UNDERTAKINGS
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration
statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
In addition, the Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, USFreightways
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing this Registration Statement on Form S-3 and
has duly caused this Amendment No. 1 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Rosemont, State of Illinois, on January 15, 1997.
USFREIGHTWAYS CORPORATION
By: /s/ JOHN CAMPBELL CARRUTH
--------------------------------------
John Campbell Carruth,
Chief Executive Officer, President
and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- - --------------------------------- ----------------------------------------- -----------------
<C> <S> <C>
* Chairman of the Board of Directors January 15, 1997
- - ---------------------------------
Morley Koffman
/s/ JOHN CAMPBELL CARRUTH Chief Executive Officer, President and January 15, 1997
- - --------------------------------- Director (Principal Executive Officer)
John Campbell Carruth
* Director January 15, 1997
- - ---------------------------------
William N. Weaver, Jr.
* Director January 15, 1997
- - ---------------------------------
Robert P. Neuschel
* Director January 15, 1997
- - ---------------------------------
Neil A. Springer
* Director January 15, 1997
- - ---------------------------------
Robert V. Delaney
* Director January 15, 1997
- - ---------------------------------
John W. Puth
/s/ CHRISTOPHER L. ELLIS Senior Vice President, Finance and Chief January 15, 1997
- - --------------------------------- Financial Officer (Principal Financial
Christopher L. Ellis Officer)
/s/ ROBERT S. OWEN Controller (Principal Accounting Officer) January 15, 1997
- - ---------------------------------
Robert S. Owen
</TABLE>
By: /s/ JOHN CAMPBELL
CARRUTH
- - -----------------------------
John Campbell Carruth,
Attorney-in-fact
II-3
<PAGE> 23
EXHIBIT INDEX
The following documents are filed herewith or incorporated herein by
reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- - ----------- -----------------------------------------------------------------------------------
<S> <C> <C>
* 1.1 Form of Purchase Agreement
4.2 Form of Indenture dated as of May 1, 1993 between USFreightways Corporation
(formerly known as TNT Freightways Corporation) and Harris Trust and Savings Bank,
as Trustee (incorporated by reference from USFreightways Corporation's Registration
Statement on Form S-1, filed on April 16, 1993, Registration No. 33-61134.
5 Opinion of Sachnoff & Weaver, Ltd.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Sachnoff & Weaver, Ltd. (included in Exhibit 5)
* 24 Powers of Attorney
</TABLE>
- - -------------------------
* Previously filed.
<PAGE> 1
Exhibit 5
[SACHNOFF & WEAVER, LTD. LETTERHEAD]
January 15, 1997
USFreightways Corporation
9700 Higgins Road, Suite 570
Rosemont, Illinois 60018
Gentlemen:
We have acted as counsel to USFreightways Corporation, a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-3, as amended (the "Registration Statement"), filed by the Company
under the Securities Act of 1933, as amended, with the Securities and Exchange
Commission (the "Commission"), relating to the sale of up to 3,105,000 shares
(the "Shares") of the Company's Common Stock, par value $.01 per share. We have
examined the Registration Statement and the form of the Purchase Agreement
filed with the Commission as an exhibit to the Registration Statement (the
"Purchase Agreement"). In addition, we have reviewed such other documents and
have made such further investigations as we have deemed necessary to enable us
to express the opinion hereinafter set forth.
We hereby advise you that in our opinion the Shares have been duly
authorized by the Company and, upon payment and delivery in accordance with the
Purchase Agreement, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Registration Statement. In giving this consent, we do not
hereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended or the rules and
regulations of the Securities and Exchange Commission.
Very truly yours,
/s/ SACHNOFF & WEAVER, LTD.
<PAGE> 1
EXHIBIT 23.1
The Board of Directors
USFreightways Corporation:
We consent to the use of our report dated January 17, 1996, except for note 1,
which is as of January 26, 1996, relating to the consolidated financial
statements of USFreightways Corporation as of December 30, 1995 and December
31, 1994, and for each of the years in the three-year period ended December 30,
1995 incorporated herein by reference and to the reference to our firm under
the heading "Experts" and "Selected Consolidated Financial Data" in the
prospectus.
/s/ KPMG Peat Marwick LLP
Chicago, Illinois
January 15, 1997
