TCAM Transport OF America (MM)

Transport Corporation of America Reports Second Quarter Results MINNEAPOLIS, July 27 /PRNewswire-FirstCall/ -- Transport Corporation of America, Inc. (NASDAQ:TCAM) today announced revenues for the second quarter 2004 of $65.2 million, compared to revenues of $65.6 million for the second quarter 2003, a decrease of 0.6 percent. Excluding fuel surcharge revenues, revenues decreased 2.7% to $61.2 million in the second quarter 2004 from $62.9 million in the same period of 2003. Second quarter's net earnings were $795,000 or $0.12 per diluted share, compared with a 2003 second quarter net loss of $837,000, or $0.12 per share. Included in the 2004 results is an after-tax impairment charge of $114,000, or $0.02 per diluted share, related to the difference between the Company's current rent on a portion of its headquarters facility and the expected rental income from a multi-year sub-lease agreement entered into during the second quarter. Included in the 2003 results is increased insurance and claims cost relating to claims settlements. Michael Paxton, Chairman, President and Chief Executive Officer, commented, "We are pleased with the progress we have made, which is reflected in our second quarter results. Even though revenues are down 0.6%, earnings have improved $1.6 million over the second quarter 2003, due in large part to the improvements we made in the operating fundamentals of the business. In addition, our revenues have increased from first quarter levels by 5.0%. We continue to add customers and lanes that build density and better balance our network, leading to increased productivity and reduced costs. In addition, the Company's average rate per loaded mile, excluding fuel surcharges, increased 5.7% to $1.48 in the second quarter 2004 from $1.40 in the second quarter 2003." "We also maintained our focus on improving the balance sheet," Paxton noted. "The Company used cash generated from operations to purchase and retire 465,300 shares of common stock at a cost of $3.3 million during the second quarter, as well as pay down an additional $0.3 million in debt. At June 30, 2004, our total outstanding debt balance is $51.3 million compared to $60.0 million at June 30, 2003." Paxton continued, "Our biggest issue continues to be the tight driver hiring market and the limited availability of owner operator capacity, which directly limits the amount of freight we are able to haul. Despite this difficult environment, we were able to increase our average seated capacity by 32 tractors from first quarter levels. The Company has recently increased Company driver and independent contractor pay rates, bolstered its driver marketing and recruiting efforts and increased the amounts paid to employees and independent contractors for driver referrals as we work to address this industry-wide issue." Year-To-Date Results For the six-month period ended June 30, 2004, Transport America announced revenues of $127.4 million, compared with 2003 year-to-date revenues of $132.7 million. Net earnings for the six-month period were $866,000, or $0.12 per diluted share, compared with a 2003 net loss of $1.4 million, or $0.19 per share. Results in 2004 include a non-cash charge of $114,000 after taxes, or $0.02 per diluted share, for the sub-lease impairment discussed previously. Results in 2003 include a non-cash benefit of $167,000 after taxes, or $0.02 per share, for a change in estimate related to the impairment of revenue equipment recorded in 2002 and a non-cash charge of $64,000 after taxes, or $0.01 per share, for a change in accounting principle relating to environmental disposal costs on tires. Outlook Looking ahead, Paxton commented, "We expect that the demand for freight will remain strong during the second half of 2004, which will allow us to build on our recent accomplishments. We will continue to increase overall capacity in our business. We will drive density and balance in our network and improve our overall rate per mile. Finally, we will continue to review our cost structure and processes to identify and achieve additional cost savings as we go through the second half of 2004." The Company will host a conference call and webcast today, July 27, 2004 at 10:00 a.m. Central Time. The Internet broadcast can be accessed at the Company's website, http://www.transportamerica.com/ , or at http://www.companyboardroom.com/ . About Transport America Transport Corporation of America, Inc., based in the Minneapolis - St. Paul metropolitan area, provides a wide range of truckload freight carriage and logistics services to customers in the United States and Canada. Transport America focuses on providing time-definite and other responsive services through its team of dedicated and committed employees supported by state-of- the-art technology and information systems. This news release contains forward-looking statements regarding the Company. The Company wishes to caution readers not to place undue reliance on any forward-looking statements which speak only as of the date made. The following important factors, among other things, in some cases have affected and in the future could affect the Company's actual results and could cause the Company's actual financial performance to differ materially from that expressed in any forward-looking statement: (1) the highly competitive conditions that currently exist in the Company's market and the Company's ability to compete, (2) the Company's ability to recruit, train, and retain qualified drivers, (3) increases in fuel prices, and the Company's ability to recover these costs from its customers, (4) the impact of environmental standards and regulations on new revenue equipment, (5) changes in governmental regulations applicable to the Company's operations, (6) adverse weather conditions, (7) accidents, (8) the financing and resale market for used revenue equipment, (9) changes in interest rates, (10) cost of liability insurance coverage, (11) changes in safety rating by Regulatory authorities, and (12) downturns in general economic conditions affecting the Company and its customers. The foregoing list should not be construed as exhaustive and the Company disclaims any obligation subsequently to revise or update any previously made forward-looking statements. Unanticipated events are likely to occur. Financial Tables to Follow... TRANSPORT CORPORATION OF AMERICA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Three and Six Months ended June 30, 2004 and 2003 (In thousands, except share and per share amounts) Three Months Six Months (Unaudited) (Unaudited) 2004 2003 2004 2003 Amount % Amount % Amount % Amount % Operating revenues $65,232 100.0 $65,638 100.0 $127,375 100.0 $132,739 100.0 Operating expenses: Salaries, wages, and benefits 19,282 29.6 18,281 27.9 37,477 29.4 36,946 27.8 Fuel, maintenance, and other expense 10,260 15.7 9,650 14.7 19,651 15.4 20,533 15.5 Purchased transport- ation 20,235 31.0 23,771 36.2 40,825 32.1 47,538 35.8 Revenue equipment leases 277 0.4 263 0.4 545 0.4 523 0.4 Depreciation and amortization 5,962 9.1 6,287 9.6 11,705 9.2 12,625 9.5 Insurance, claims, and damage 2,751 4.2 3,478 5.3 5,893 4.6 6,397 4.8 Taxes and licenses 1,148 1.8 1,111 1.7 2,249 1.8 2,315 1.7 Communication 455 0.7 559 0.9 898 0.7 1,096 0.8 Other general and administrative expenses 2,573 3.9 2,590 3.9 4,883 3.8 5,070 3.8 Impairment of revenue equipment - - - - - - (278) (0.2) Impairment of sublease office space 190 0.3 - - 190 0.1 - - Gain (Loss) on disposition of equipment (20) - (3) - (22) - 4 - Total operating expenses 63,113 96.8 65,987 100.5 124,294 97.6 132,769 100.0 Operating income (loss) 2,119 3.2 (349) (0.5) 3,081 2.4 (30) - Interest expense, net 805 1.2 1,045 1.6 1,650 1.3 2,120 1.6 Earnings (loss) before income taxes and cumulative effect of change in accounting principle 1,314 2.0 (1,394) (2.1) 1,431 1.1 (2,150) (1.6) Income tax provision (benefit) 519 0.8 (557) (0.8) 565 0.4 (859) (0.6) Earnings (loss) before cumulative effect of change in accounting principle 795 1.2 (837) (1.2) 866 0.7 (1,291) (1.0) Cumulative effect of change in accounting principle, net of tax effect - - - - - - (64) - Net earnings (loss) $795 1.2 $(837) (1.2) $866 0.7 $(1,355) (1.0) Earnings (loss) per common share - basic Before cumulative effect of change in accounting principles $0.12 $(0.12) $0.13 $(0.18) Net earnings (loss) per share $0.12 $(0.12) $0.13 $(0.19) Earnings (loss) per common share - diluted Before cumulative effect of change in accounting principles $0.12 $(0.12) $0.12 $(0.18) Net earnings (loss) per share $0.12 $(0.12) $0.12 $(0.19) Average common shares outstanding Basic 6,756,647 7,185,776 6,921,931 7,201,498 Diluted 6,861,103 7,185,776 7,030,235 7,201,498 TRANSPORT CORPORATION OF AMERICA, INC. BALANCE SHEET June 30, 2004 and 2003 (In thousands) Unaudited ASSETS 2004 2003 Current Assets: Cash and cash equivalents $5,542 $123 Trade receivables, net of allowances 28,939 27,750 Other receivables 1,073 2,209 Operating supplies 757 881 Deferred income taxes 5,885 4,903 Prepaid expenses 3,600 3,772 Total Current Assets 45,796 39,638 Revenue Equipment, At Cost 178,433 187,948 Less: accumulated depreciation (82,999) (84,817) Revenue Equipment, Net 95,434 103,131 Property and Other Equipment: Land, buildings, and improvements 16,363 17,674 Other equipment and leasehold improvements 21,628 22,910 Less: accumulated depreciation (18,025) (17,131) Property and Other Equipment, Net 19,966 23,453 Revenue, Property and Other Equipment, Net 115,400 126,584 Other Assets, Net 1,278 2,850 Total Assets $162,474 $169,072 LIABILITIES AND STOCKHOLDERS' EQUITY 2003 2002 Current Liabilities: Current maturities of long-term debt $9,293 $15,563 Current maturities of capital lease obligations 7,956 4,076 Accounts payable 5,580 4,044 Checks issued in excess of cash balances 1,770 981 Due to independent contractors 2,293 2,539 Accrued expenses 21,445 17,515 Total Current Liabilities 48,337 44,718 Long-Term Debt & Capital Lease Obligations Long-term debt, less current maturities 26,946 25,203 Capital lease obligations, less current maturities 7,066 15,139 Total Long-Term Debt & Capital Lease Obligations 34,012 40,342 Deferred Income Taxes 25,068 25,598 Shareholders' Equity: Common stock 65 72 Additional paid-in capital 25,385 29,877 Retained earnings 29,607 28,465 Total Shareholders' Equity 55,057 58,414 Total Liabilities and Equity $162,474 $169,072 TRANSPORT CORPORATION OF AMERICA, INC. Selected Consolidated Financial and Operating Data Three and Six Months Ended June 30, 2004 and 2003 Three Months Six Months 2004 2003 2004 2003 Operating Statistics Company tractors, seated 904 908 904 908 Company tractors, other 95 81 95 81 Independent contractor 674 855 674 855 Total tractors (at end of period) 1,673 1,844 1,673 1,844 Trailers (at end of period) 4,838 5,269 4,838 5,269 Average company tractors in service 895 926 864 948 Total loaded miles (000's) 41,059 44,587 80,676 89,894 Total miles (000's) 45,972 49,859 90,285 100,201 Trucking revenue per tractor per week* $2,915 $2,652 $2,856 $2,670 Trucking revenues per loaded mile* $1.478 $1.399 $1.476 $1.394 Trucking revenues per mile* $1.320 $1.251 $1.319 $1.250 Average empty mile percentage 10.7% 10.6% 10.6% 10.3% Average length of haul, all miles 684 722 690 730 Average annual revenues per non- driver employee (000's) $648 $641 $629 $636 Financial Data (000's) Trucking revenue $60,701 $62,389 $119,049 $125,284 Fuel surcharge revenue 4,030 2,665 6,983 6,165 Logistics 501 584 1,343 1,290 Total revenue $65,232 $65,638 $127,375 $132,739 Capital expenditures, net of proceeds $680 $14 $2,540 $386 Total debt and capital lease obligations $51,261 $59,981 $51,261 $59,981 * Excluding fuel surcharge DATASOURCE: Transport Corporation of America, Inc. CONTACT: Michael Paxton, Chairman, President and CEO, +1-651-686-2500, or Keith Klein, Chief Financial Officer, +1-651-686-2500, both of Transport Corporation of America, Inc. Web site: http://www.transportamerica.com/

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