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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

     
(Mark One)
   
þ
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
    For the quarterly period ended September 30, 2003
 
or
 
o
  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
Incorporation or Organization)		   (I.R.S. Employer
Identification No.)

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 offices)

          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 þ          NO o

          Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     Yes þ          No o

          Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date (November 10, 2003)

Common stock, $.001 par value: 83,612,771 shares

 

             
Page
Number
PART I
FINANCIAL INFORMATION
Item 1.
  Financial Statements        
    Condensed Consolidated Balance Sheets as of September 30, 2003 (unaudited) and December 31, 2002     3  
    Condensed Consolidated Statements of Earnings (unaudited) for the Three and Nine Month Periods Ended September 30, 2003 and 2002     5  
    Consolidated Statements of Comprehensive Income (unaudited) for the Three and Nine Month Periods Ended September 30, 2003 and 2002     6  
    Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the Nine Month Period Ended September 30, 2003     7  
    Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Month Periods Ended September 30, 2003 and 2002     8  
    Notes to Condensed Consolidated Financial Statements     10  
Item 2.
  Management’s Discussion and Analysis of Financial Condition and Results of Operations     14  
Item 3.
  Quantitative and Qualitative Disclosures about Market Risk     20  
Item 4.
  Controls and Procedures     20  
PART II
OTHER INFORMATION
Items 1, 2,
3, 4 and 5. 		  Not applicable     21  
Item 6.
  Exhibits and Reports on Form 8-K     21  

2

 

PART I.     FINANCIAL INFORMATION

 
ITEM 1. FINANCIAL STATEMENTS

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

 
Condensed Consolidated Balance Sheets
(In thousands, except share data)
                     
September 30, December 31,
2003 2002
(Unaudited)
Assets        
Current assets:
               
 
Cash
  $ 15,288     $ 7,930  
 
Accounts receivable, net
    285,579       272,545  
 
Equipment sales receivable
    16,973       11,100  
 
Inventories and supplies
    16,261       16,031  
 
Prepaid taxes, licenses and insurance
    14,665       19,021  
 
Assets held for sale
    4,872       8,274  
 
Deferred income taxes
    13,236       2,262  
     
     
 
   
Total current assets
    366,874       337,163  
     
     
 
Property and equipment, at cost:
               
 
Revenue and service equipment
    1,545,811       1,476,183  
 
Land
    48,594       47,855  
 
Facilities and improvements
    271,407       213,421  
 
Furniture and office equipment
    72,890       70,315  
     
     
 
   
Total property and equipment
    1,938,702       1,807,774  
 
Less accumulated depreciation and amortization
    620,424       548,937  
     
     
 
   
Net property and equipment
    1,318,278       1,258,837  
     
     
 
Investment in Transplace
    3,288       4,282  
Notes receivable from Trans-Mex
    12,848       11,649  
Deferred legal fees
    10,535       16,892  
Other assets
    19,350       16,759  
Customer relationship intangible
    35,726          
Goodwill
    25,164       8,900  
     
     
 
    $ 1,792,063     $ 1,654,482  
     
     
 

See accompanying notes to condensed consolidated financial statements.

Continued

3

 

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

 
Condensed Consolidated Balance Sheets
(In thousands, except share data)
                     
September 30, December 31,
2003 2002
(Unaudited)
Liabilities and Stockholders’ Equity        
Current liabilities:
               
 
Accounts payable
  $ 78,600     $ 53,192  
 
Accrued liabilities
    66,827       52,161  
 
Current portion of claims accruals
    80,229       83,188  
 
Current portion of long-term debt
    3,466       3,389  
 
Current portion of obligations under capital leases
    20,138       45,832  
 
Securitization of accounts receivable
    82,000       169,000  
     
     
 
   
Total current liabilities
    331,260       406,762  
     
     
 
Borrowings under revolving credit agreement
    70,000       136,400  
Senior Notes
    200,000          
Long-term debt, less current portion
    6,033       9,387  
Obligations under capital leases
    24,449       37,683  
Claims accruals, less current portion
    81,304       65,011  
Deferred income taxes
    261,033       223,514  
Fair value of interest rate swaps
    9,277       9,947  
Stockholders’ equity:
               
 
Preferred stock, par value $.001 per share
Authorized 1,000,000 shares; none issued
               
 
Common stock, par value $.001 per share
Authorized 200,000,000 shares; 91,023,021 and 90,182,273 shares issued at September 30, 2003 and December 31, 2002, respectively
    91       90  
 
Additional paid-in capital
    282,365       272,099  
 
Retained earnings
    636,114       583,480  
  Treasury stock, at cost (7,438,077 and 6,237,077 shares at September 30, 2003 and December 31, 2002, respectively)     (108,760 )     (89,891 )
 
Accumulated other comprehensive loss
    (1,103 )        
     
     
 
   
Total stockholders’ equity
    808,707       765,778  
     
     
 
Commitments and contingencies
               
    $ 1,792,063     $ 1,654,482  
     
     
 

See accompanying notes to condensed consolidated financial statements.

4

 

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

 
Condensed Consolidated Statements of Earnings
(Unaudited)
(In thousands, except share data)
                                     
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Operating revenue
  $ 623,875     $ 536,955     $ 1,760,087     $ 1,541,330  
Operating expenses:
                               
 
Salaries, wages and employee benefits
    220,091       201,911       641,746       574,385  
 
Operating supplies and expenses
    58,849       49,678       172,004       141,377  
 
Fuel
    83,104       67,576       243,683       184,885  
 
Purchased transportation
    110,428       91,457       301,765       264,532  
 
Rental expense
    20,148       20,329       59,157       63,679  
 
Insurance and claims
    28,507       17,280       76,548       56,374  
 
Depreciation and amortization
    38,980       35,985       112,713       110,885  
 
Communication and utilities
    7,459       6,938       21,196       20,675  
 
Operating taxes and licenses
    14,157       12,200       36,076       37,419  
     
     
     
     
 
   
Total operating expenses
    581,723       503,354       1,664,888       1,454,211  
     
     
     
     
 
Operating income
    42,152       33,601       95,199       87,119  
Other (income) expenses:
                               
 
Interest expense
    3,196       8,894       11,711       17,971  
 
Interest income
    (198 )     (1,064 )     (494 )     (1,715 )
 
Other
    (502 )     (159 )     (922 )     811  
     
     
     
     
 
   
Other (income) expenses, net
    2,496       7,671       10,295       17,067  
     
     
     
     
 
Earnings before income taxes
    39,656       25,930       84,904       70,052  
Income taxes
    15,080       9,590       32,270       26,620  
     
     
     
     
 
Net earnings
  $ 24,576     $ 16,340     $ 52,634     $ 43,432  
     
     
     
     
 
Basic earnings per share
  $ .29     $ .19     $ .63     $ .50  
     
     
     
     
 
Diluted earnings per share
  $ .29     $ .19     $ .62     $ .50  
     
     
     
     
 

See accompanying notes to condensed consolidated financial statements.

5

 

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

 
Consolidated Statements of Comprehensive Income
(Unaudited)
(In thousands)
                                   
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Net earnings
  $ 24,576     $ 16,340     $ 52,634     $ 43,432  
Other comprehensive loss:
                               
 
Net loss on cash flow hedge, net of tax effect of $432
                    (706 )        
  Reclassification of derivative loss on cash flow hedge into net earnings, net of tax effect of $13     22               22          
     
     
     
     
 
Comprehensive income
  $ 24,598     $ 16,340     $ 51,950     $ 43,432  
     
     
     
     
 

See accompanying notes to condensed consolidated financial statements.

6

 

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

 
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except share data)
                                                         
Common Stock Additional Other Total
Paid-in Retained Treasury Comprehensive Stockholders’
Shares Par Value Capital Earnings Stock Loss Equity
Balances, December 31, 2002
    90,182,273     $ 90     $ 272,099     $ 583,480     $ (89,891 )   $       $ 765,778  
Issuance of common stock under stock option and employee stock purchase plans     840,748       1       9,070                               9,071  
Amortization of deferred compensation                     1,196                               1,196  
Cash flow hedge                                             (1,138 )     (1,138 )
Reclassification of cash flow hedge to interest expense                                             35       35  
Purchase of 1,201,000 shares of treasury stock                                     (18,869 )             (18,869 )
Net earnings
                            52,634                       52,634  
     
     
     
     
     
     
     
 
Balances, September 30, 2003
    91,023,021     $ 91     $ 282,365     $ 636,114     $ (108,760 )   $ (1,103 )   $ 808,707  
     
     
     
     
     
     
     
 

See accompanying notes to condensed consolidated financial statements.

7

 

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

 
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
                         
Nine Months Ended
September 30,
2003 2002
Cash flows from operating activities:
               
 
Net earnings
  $ 52,634     $ 43,432  
 
Adjustments to reconcile net earnings to net cash provided by operating activities:
               
   
Depreciation and amortization
    112,441       104,732  
   
Deferred income taxes
    26,545       24,740  
   
Provision for losses on accounts receivable
    4,043       4,729  
   
Amortization of deferred compensation
    1,196       803  
   
Fair value of interest rate swaps
    (670 )     5,902