UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) April 21, 2003 -------------- YELLOW CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-12255 48-0948788 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 10990 Roe Avenue, Overland Park, Kansas 66211 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (913) 696-6100 ------------------- No Changes. ----------- (Former name or former address, if changed since last report.)
Item 7. Financial Statements and Exhibits The following exhibit is filed herewith: Exhibit No. Description 99 Press Release dated April 21, 2003. Item 9. Information Being Provided Under Item 12. On April 21, 2003, Yellow Corporation announced its results of operations and financial condition for the quarter ending March 31, 2003. The public announcement was made by means of a press release, the text of which is set forth in Exhibit 99 hereto. This information is being furnished pursuant to Item 12 of Form 8-K and is being presented under Item 9 as provided in the Commission's final rule; interim guidance regarding Form 8-K Item 11 and Item 12 filing requirements (Release No. 34-47583).
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. YELLOW CORPORATION ---------------------------------- (Registrant) Date: April 21, 2003 By: /s/ Donald G. Barger, Jr. --------------------- ------------------------------------------ Donald G. Barger, Jr. Senior Vice President and Chief Financial Officer
NEWS RELEASE [YELLOW CORPORATION LETTERHEAD] APRIL 21, 2003 FOR IMMEDIATE RELEASE YELLOW CORPORATION REPORTS SOLID FIRST QUARTER EPS OF $.19 - -- YELLOW TRANSPORTATION POSTS REVENUE GROWTH OF 17 PERCENT OVER FIRST QUARTER 2002 - -- MERIDIAN IQ INCREASES REVENUE BY 43 PERCENT OVER FIRST QUARTER 2002 AND EXPANDS CUSTOMER BASE - -- EXACT EXPRESS, AN EXPEDITED SERVICE, GROWS REVENUE BY 60 PERCENT OVER FIRST QUARTER 2002 OVERLAND PARK, KAN. --- Yellow Corporation (NASDAQ: YELL) today reported first quarter 2003 income of $5.6 million, or $.19 per share, up substantially from about breakeven performance in the first quarter of 2002. Yellow Corporation reported the following consolidated results for the first quarter of 2003: - - Operating revenue of $681 million, a 17.7% increase over $579 million in first quarter 2002 - - Operating income of $11.8 million compared to $2.7 million in first quarter 2002 "Yellow Transportation and Meridian IQ are performing very solidly," said Bill Zollars, Chairman, President and CEO of Yellow Corporation. "The first quarter of 2003 included weather-related expenses of approximately $5.0 million, costs of about $4.0 million for an industry conference we host every other year and a benefit of about a million dollars from an insurance recovery. Even with the net impact of these first quarter items, we were able to generate substantial revenue and earnings growth. During the first quarter, underlying economic conditions remained steady." "The growth in Exact Express highlights the effectiveness of our one-stop shopping strategy," Zollars continued. "When it comes to big shipments for business, our customers can rely on Yellow to manage their transportation needs whatever the mode, speed or destination." YELLOW TRANSPORTATION Yellow Transportation reported first quarter 2003 results as follows: - - Revenue of $660 million, up 16.9% from $565 million in first quarter 2002 - - Operating income of $19.5 million, up from $6.7 million in first quarter 2002 - - Operating ratio of 97.0% compared to 98.8% in first quarter 2002 "Yellow Transportation continues to excel at pricing discipline, cost management and service quality," said Zollars. "Maintaining the right balance between business volumes and pricing resulted in significant profit improvement." Less-than-truckload (LTL) revenue per day was up 17.0% over the first quarter of 2002, primarily reflecting a 9.2% increase in LTL tonnage per day and a 7.1% improvement in LTL revenue per hundred weight. First quarter 2003 business volumes benefited primarily from the September 2002 closure of a significant competitor and the continued penetration of premium services.
Yellow Corporation 2003 First Quarter Financial Results // Page Two MERIDIAN IQ Meridian IQ, entering its second year of operations, reported the following first quarter 2003 results: - - Operating revenue of $22 million, up 43% over $15 million in first quarter 2002 - - Operating loss of $.9 million compared to a $1.5 million loss in first quarter 2002 "Meridian IQ continues to show significant growth in a challenging economic environment," said Zollars. "Signing 12 new contracts during the first quarter, which brings our total contractual customers to over 160, demonstrates the value of our transportation management solutions." OUTLOOK "As a result of the strong performance of Yellow Transportation and Meridian IQ, we remain comfortable with our full year 2003 guidance of $2.25 to $2.35 per share, and expect the second quarter to be between $.50 and $.60 per share," Zollars stated. "We are assuming that current economic activity continues throughout 2003. However, due to our significant operating leverage, we are well positioned to take advantage of improved economic conditions when they occur." REVIEW OF FINANCIAL RESULTS A teleconference review of Yellow Corporation first quarter 2003 financial results has been scheduled for Tuesday, April 22, 2003, beginning at 9:30 a.m. Eastern, 8:30 a.m. Central. Hosting the conference call will be: Bill Zollars, Chairman, President and CEO of Yellow Corporation; Don Barger, CFO of Yellow Corporation; James Welch, President of Yellow Transportation; and Jim Ritchie, President of Meridian IQ. To participate, please dial 1-888-609-3912 and allow five to ten minutes prior to the start of the call. The conference call will be webcast live via StreetEvents at www.streetevents.com and via the Yellow Corporation Internet site www.yellowcorp.com. An audio playback will be available until April 30, 2003 by calling 1-800-642-1687 then dialing the access code 9321653. In addition, an audio playback will be available for 30 days via the StreetEvents and Yellow Corporation web sites.
Yellow Corporation 2003 First Quarter Financial Results // Page Three This news release (and oral statements made regarding the subjects of this release, including on the conference call announced herein) contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "expect," "believe," "intend," and similar expressions are intended to identify forward-looking statements. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including (without limitation), labor relations, inclement weather, price and availability of fuel, competitor pricing activity, expense volatility, changes in and customer acceptance of new technology and a downturn in general or regional economic activity. Yellow Corporation is a holding company that through wholly owned operating subsidiaries offers its customers a wide range of asset and non-asset based transportation services integrated by technology. Its largest subsidiary, Yellow Transportation, offers a full range of regional, national and international services for the movement of industrial, commercial and retail goods. Meridian IQ is a non-asset global transportation management company that plans and coordinates the movement of goods worldwide. Yellow Technologies provides innovative technology solutions and services exclusively for Yellow Corporation companies. Headquartered in Overland Park, Kansas, Yellow Corporation employs approximately 23,000 people. Analyst Contact: Stephen Bruffett Yellow Corporation 913-696-6108 steve.bruffett@yellowcorp.com Media Contact: Suzanne Dawson Linden Alschuler & Kaplan 212-329-1420 sdawson@lakpr.com
CONSOLIDATED BALANCE SHEETS Yellow Corporation and Subsidiaries (Amounts in thousands except per share data) (Unaudited) March 31, December 31, 2003 2002 ----------- ----------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 23,336 $ 28,714 Accounts receivable 324,900 327,913 Prepaid expenses and other 52,921 68,726 ----------- ----------- Total current assets 401,157 425,353 ----------- ----------- Property and equipment, net of accumulated depreciation of $1,122,794 and $1,114,120 570,336 564,976 Goodwill and other assets 54,156 52,656 ----------- ----------- Total assets $ 1,025,649 $ 1,042,985 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 77,913 $ 114,989 Wages, vacations, and employees' benefits 166,449 159,998 Other current and accrued liabilities 102,469 101,111 ABS borrowings 50,000 50,000 Current maturities of long-term debt 35,260 24,261 ----------- ----------- Total current liabilities 432,091 450,359 ----------- ----------- OTHER LIABILITIES: Long-term debt, less current portion 39,004 50,024 Claims and other liabilities 187,913 182,644 ----------- ----------- Total other liabilities 226,917 232,668 ----------- ----------- SHAREHOLDERS' EQUITY: Common stock, $1 par value per share 31,828 31,825 Capital surplus 80,654 80,610 Retained earnings 331,100 325,474 Accumulated other comprehensive loss (34,707) (35,596) Unamortized restricted stock awards (932) (1,053) Treasury stock, at cost (2,244 shares) (41,302) (41,302) ----------- ----------- Total shareholders' equity 366,641 359,958 ----------- ----------- Total liabilities and shareholders' equity $ 1,025,649 $ 1,042,985 =========== ===========
STATEMENTS OF CONSOLIDATED OPERATIONS Yellow Corporation and Subsidiaries For the Three Months Ended March 31 (Amounts in thousands except per share data) (Unaudited) 2003 2002 --------- --------- OPERATING REVENUE $ 681,093 $ 578,802 --------- --------- OPERATING EXPENSES: Salaries, wages and benefits 438,748 390,239 Operating expenses and supplies 109,943 81,068 Operating taxes and licenses 19,767 18,379 Claims and insurance 12,724 13,580 Depreciation and amortization 20,268 18,929 Purchased transportation 67,873 53,246 Losses on property disposals, net 11 468 Spin-off and reorganization charges - 236 --------- --------- Total operating expenses 669,334 576,145 --------- --------- OPERATING INCOME 11,759 2,657 --------- --------- NONOPERATING (INCOME) EXPENSES: Interest expense 2,646 2,310 ABS facility charges - 754 Other, net (93) (158) --------- --------- Nonoperating expenses, net 2,553 2,906 --------- --------- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 9,206 (249) INCOME TAX PROVISION (BENEFIT) 3,580 (102) --------- --------- INCOME (LOSS) FROM CONTINUING OPERATIONS 5,626 (147) Loss from discontinued operations, net - (72,889) --------- --------- NET INCOME (LOSS) $ 5,626 $ (73,036) ========= ========= AVERAGE SHARES OUTSTANDING-BASIC 29,583 24,934 ========= ========= AVERAGE SHARES OUTSTANDING-DILUTED 29,818 25,259 ========= ========= BASIC EARNINGS (LOSS) PER SHARE: Income (loss) from continuing operations $ 0.19 $ (0.01) Loss from discontinued operations - (2.92) --------- --------- Net income (loss) $ 0.19 $ (2.93) --------- --------- DILUTED EARNINGS (LOSS) PER SHARE: Income (loss) from continuing operations $ 0.19 $ (0.01) Loss from discontinued operations - (2.88) --------- --------- Net income (loss) $ 0.19 $ (2.89) --------- ---------
STATEMENTS OF CONSOLIDATED CASH FLOWS Yellow Corporation and Subsidiaries For the Three Months Ended March 31 (Amounts in thousands) (Unaudited) 2003 2002 -------- -------- OPERATING ACTIVITIES: Net income (loss) $ 5,626 $(73,036) Noncash items included in net income (loss): Depreciation and amortization 20,268 18,929 Loss from discontinued operations - 72,889 Losses on property disposals, net 11 468 Changes in assets and liabilities, net: Accounts receivable 3,013 (19,212) Accounts receivable securitizations - 30,500 Accounts payable (37,076) (27,299) Other working capital items 23,594 42,675 Claims and other 5,183 3,028 Other (564) 2,188 Net change in operating activities of discontinued operations - (3,050) -------- -------- Net cash from operating activities 20,055 48,080 -------- -------- INVESTING ACTIVITIES: Acquisition of property and equipment (26,141) (25,380) Proceeds from disposal of property and equipment 691 (580) Net capital expenditures of discontinued operations - (1,275) -------- -------- Net cash used in investing activities (25,450) (27,235) -------- -------- FINANCING ACTIVITIES: Decrease in long-term debt (21) (25,418) ABS borrowings, net - - Proceeds from stock options and other, net 38 2,039 -------- -------- Net cash provided by (used in) financing activities 17 (23,379) -------- -------- NET DECREASE IN CASH AND CASH EQUIVALENTS (5,378) (2,534) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 28,714 19,214 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 23,336 $ 16,680 ======== ========
SUPPLEMENTAL FINANCIAL INFORMATION Yellow Corporation and Subsidiaries For the Three Months Ended March 31 (Amounts in thousands except per share data) (Unaudited) 2003 2002 % ------------------------------------------------- Operating revenue: Yellow Transportation $ 660,125 $ 564,643 16.9 Meridian IQ 22,083 15,402 43.4 Corporate/Other (1,115) (1,243) 10.3 ------- ------- Consolidated 681,093 578,802 17.7 Operating income: Yellow Transportation 19,500 6,662 192.7 Meridian IQ (893) (1,515) 41.1 Corporate/Other (6,848) (1) (2,490) (175.0) --------- --------- Consolidated 11,759 2,657 342.6 Losses on property disposals and spin-off and reorganization charges: Yellow Transportation 12 571 Meridian IQ - 81 Corporate/Other (1) 52 --------- --------- Consolidated 11 704 Operating income excluding property disposals, spin-off and reorganization charges (2): Yellow Transportation 19,512 7,233 169.8 Meridian IQ (893) (1,434) 37.7 Corporate/Other (6,849) (2,438) (180.9) --------- --------- Consolidated 11,770 3,361 250.2 Operating ratio: Yellow Transportation 97.0% 98.8% Consolidated 98.3% 99.5% Operating ratio excluding property disposals, spin-off and reorganization charges: Yellow Transportation 97.0% 98.7% Consolidated 98.3% 99.4% Diluted EPS from continuing operations $ 0.19 $ (0.01) Diluted EPS from property disposals, spin-off and reorganization charges - 0.02 --------- --------- Diluted EPS from continuing operations excluding property disposals, spin-off and reorganization charges 0.19 0.01 Pro forma stock option expense (after tax) (3) 549 360 Pro forma stock option impact on diluted EPS from continuing operations (0.02) (0.01) (1) Includes approximately $4 million for an industry conference that Yellow Corporation hosts every other year. (2) Management does not consider these items a component of recurring operations and excludes them when evaluating operating income. (3) The fair value in accordance with SFAS 123, Accounting for Stock-Based Compensation, not reflected in income.
STATISTICAL INFORMATION Yellow Transportation, Inc. For the Three Months Ended March 31 (Amounts in thousands except per unit data) Three Months Amount/Workday ----------------------------- ----------------------------- 2003 2002 % 2003 2002 % ------------------------------------------------------------------------------ Workdays 63 63 Revenue: LTL 616,006 526,654 17.0 9,777.9 8,359.6 17.0 TL 44,289 40,469 9.4 703.0 642.4 9.4 --------- --------- --------- --------- Subtotal - pickup basis 660,295 567,123 16.4 10,480.9 9,002.0 16.4 Revenue recognition adjustment (170) (2,480) (93.1) (2.7) (39.4) (93.1) --------- --------- --------- --------- Total - as reported 660,125 564,643 16.9 10,478.2 8,962.6 16.9 Tonnage - pickup basis: LTL 1,529 1,401 9.2 24.27 22.23 9.2 TL 277 267 3.7 4.40 4.24 3.7 Total 1,806 1,668 8.3 28.67 26.47 8.3 Shipments - pickup basis: LTL 3,119 2,814 10.9 49.51 44.66 10.9 TL 38 37 3.2 0.60 0.59 3.1 Total 3,157 2,851 10.8 50.11 45.25 10.8 Revenue/cwt. - pickup basis: LTL 20.14 18.80 7.1 TL 7.99 7.57 5.5 Total 18.28 17.00 7.5 Revenue/cwt. - pickup basis: (excluding fuel surcharge) LTL 19.35 18.66 3.7 TL 7.72 7.53 2.5 Total 17.57 16.88 4.1 Revenue/shipment - pickup basis: LTL 197.50 187.17 5.5 TL 1,165.47 1,098.84 6.1 Total 209.15 198.95 5.1