SWIFT TRANSPORTATION CO INC - 10-Q Quarterly Report

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 June 30, 2004

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 x No o

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date (August 4, 2004)

Common stock, $.001 par value: 79,949,023 shares

PART I

FINANCIAL INFORMATION


		Page
		Number

Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2004 (unaudited) and December 31, 2003		3-4
	Consolidated Statements of Earnings (unaudited) for the Three and Six Month Periods Ended June 30, 2004 and 2003		5
	Consolidated Statements of Comprehensive Income (unaudited) for the Three and Six Month Periods Ended June 30, 2004 and 2003		6
	Consolidated Statements of Stockholders’ Equity (unaudited) for the Six Month Period Ended June 30, 2004		7
	Consolidated Statements of Cash Flows (unaudited) for the Six Month Periods Ended June 30, 2004 and 2003		8-9
	Notes to Consolidated Financial Statements		10-12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13-20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		20
Item 4.	Controls and Procedures		20

PART II

OTHER INFORMATION
Items 1, 3 and 5.	Not applicable
Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities		22
Item 4.	Submission of Matters to a Vote of Security Holders		22
Item 6.	Exhibits and Reports on Form 8-K		23
Exhibit 10.23
Exhibit 10.24
Exhibit 31.1
Exhibit 31.2
Exhibit 32
Exhibit 99

PART I. FINANCIAL INFORMATION


ITEM 1.	FINANCIAL STATEMENTS

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share data)


			June 30,		December 31,
			2004		2003

			(unaudited)
Assets
Current assets:
	Cash		$	640	$	19,055
	Accounts receivable, net			303,410		289,924
	Equipment sales receivable			2,645		5,998
	Inventories and supplies			12,230		17,570
	Prepaid taxes, licenses and insurance			26,275		21,851
	Assets held for sale			3,376
	Deferred income taxes			9,737		3,133

		Total current assets		358,313		357,531

Property and equipment, at cost:
	Revenue and service equipment			1,630,588		1,580,581
	Land			74,919		70,107
	Facilities and improvements			264,408		259,379
	Furniture and office equipment			82,267		76,897

		Total property and equipment		2,052,182		1,986,964
	Less accumulated depreciation and amortization			678,976		636,059

		Net property and equipment		1,373,206		1,350,905

Investment in Transplace				1,411		3,079
Notes receivable from Trans-Mex						15,166
Deferred legal fees				4,178		8,416
Other assets				19,902		21,078
Customer relationship intangible, net				42,844		39,535
Goodwill				56,188		25,233

			$	1,856,042	$	1,820,943

Continued

See accompanying notes to consolidated financial statements.

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share data)


			June 30,			December 31,
			2004			2003

			(unaudited)
Liabilities and Stockholders’ Equity
Current liabilities:
	Accounts payable		$	82,180		$	63,898
	Accrued liabilities			83,097			68,509
	Current portion of claims accruals			100,824			86,637
	Current portion of long-term debt			4,089			4,573
	Current portion of obligations under capital leases			21,058			14,047
	Fair value of operating lease guarantees			1,865			2,156
	Securitization of accounts receivable			175,000			142,000

		Total current liabilities		468,113			381,820

Borrowings under revolving credit agreement				10,000			30,000
Senior Notes				200,000			200,000
Long-term debt, less current portion				3,331			6,847
Obligations under capital leases				9,928			21,047
Claims accruals, less current portion				77,803			73,800
Deferred income taxes				265,393			254,951
Fair value of interest rate swaps				5,440			7,863
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; 92,811,397 and 91,379,776 shares issued at June 30, 2004 and December 31, 2003, respectively		93			91
	Additional paid-in capital			324,021			291,095
	Retained earnings			703,839			662,851
	Treasury stock, at cost (13,174,956 and 7,438,077 shares at June 30, 2004 and December 31, 2003, respectively)			(211,321	)		(108,760	)
	Accumulated other comprehensive income and other			(598	)		(662	)

		Total stockholders’ equity		816,034			844,615

Commitments and contingencies
			$	1,856,042		$	1,820,943

See accompanying notes to consolidated financial statements.

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Consolidated Statements of Earnings

(unaudited)

(In thousands, except per share data)



			Three Months Ended						Six Months Ended
			June 30,						June 30,

			2004			2003			2004			2003

Operating revenue			$	691,032		$	584,909		$	1,313,406		$	1,136,212
Operating expenses:
	Salaries, wages and employee benefits			235,942			217,260			470,652			421,655
	Operating supplies and expenses			63,335			55,016			130,270			113,155
	Fuel			103,997			75,869			192,971			160,579
	Purchased transportation			120,677			100,083			228,230			191,337
	Rental expense			20,956			18,344			41,800			39,009
	Insurance and claims			21,582			25,551			46,824			48,041
	Depreciation and amortization			43,218			39,379			84,078			73,733
	Communication and utilities			7,368			6,797			15,164			13,737
	Operating taxes and licenses			14,459			11,908			29,259			21,919

		Total operating expenses		631,534			550,207			1,239,248			1,083,165

Operating income				59,498			34,702			74,158			53,047
Other (income) expenses:
	Interest expense			1,465			4,583			7,471			8,515
	Interest income			(507	)		(138	)		(640	)		(296	)
	Other			3,800			(644	)		2,251			(420	)

		Other (income) expenses, net		4,758			3,801			9,082			7,799

Earnings before income taxes				54,740			30,901			65,076			45,248
Income taxes				20,156			11,740			24,088			17,190

Net earnings			$	34,584		$	19,161		$	40,988		$	28,058

Basic earnings per share			$	.43		$	.23		$	.50		$	.34

Diluted earnings per share			$	.43		$	.23		$	.49		$	.33

See accompanying notes to consolidated financial statements.

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(unaudited)

(In thousands)



		Three Months Ended						Six Months Ended
		June 30,						June 30,

		2004			2003			2004		2003

Net earnings		$	34,584		$	19,161		$	40,988	$	28,058
Other comprehensive income (loss):
	Net derivative loss on cash flow hedge, net of tax effect of $432					(706	)				(706	)
	Reclassification of derivative loss on cash flow hedge into net earnings, net of tax effect of $14 and $28		22						45
	Foreign currency translation		(169	)					19

Comprehensive income		$	34,437		$	18,455		$	41,052	$	27,352

See accompanying notes to consolidated financial statements.

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

(unaudited)

(In thousands, except share data)


												Accumulated
	Common Stock											Other
					Additional							Comprehensive			Total
			Par		Paid-In		Retained		Treasury			Income and			Stockholders’
	Shares		Value		Capital		Earnings		Stock			Other			Equity

Balances, December 31, 2003		91,379,776	$	91	$	291,095	$	662,851	$	(108,760	)	$	(662	)	$	844,615
Issuance of common stock under stock option and employee stock purchase plans		489,466		1		5,689										5,690
Income tax benefit arising from the exercise of stock options						2,768										2,768
Amortization of deferred compensation						4,308										4,308
Issuance of common stock for acquisition of Trans-Mex		942,155		1		20,161										20,162
Reclassification of cash flow hedge to interest expense													45			45
Purchase of 5,736,879 shares of treasury stock										(102,561	)					(102,561	)
Foreign currency translation													19			19
Net earnings								40,988								40,988

Balances, June 30, 2004		92,811,397	$	93	$	324,021	$	703,839	$	(211,321	)	$	(598	)	$	816,034

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