Swift Transportation (SWFT) Lowers FY15 Guidance, Approves $100M Buyback

Swift Transportation Company (NYSE: SWFT) ("Swift") has revised its full year 2015 Adjusted EPS guidance range to $1.43-$1.52 from $1.64-$1.74 as compared to $1.38 in 2014.

(Street sees FY15 EPS of $1.70)

The change in the full year range is the result of the following items: the development on prior year accident and workers’ compensation claims and the corresponding impact to reserves which is expected to be a $0.07 impact in the third quarter of 2015; the settlement of a class action lawsuit and related items which is expected to be a $0.02 impact in the third quarter of 2015; the settlement of a previous lawsuit that resulted in a $0.03 charge in the second quarter of 2015; the additional carrying expense associated with the large volume of new tractors received late in the second quarter due to delivery delays and the catch up throughout the third quarter that has resulted in a significant backlog of tractors being processed for trade or sale which is expected to have an impact of approximately $0.05-$0.06 in the second half of 2015; and a reduction in expected volumes of seasonal project business in the fourth quarter of 2015 due to customers’ recent logistical changes which could have an impact of $0.05-$0.06 of Adjusted EPS. Due to these developments, the Company now expects Adjusted EPS to be $0.30-$0.33 for the third quarter of 2015 and $0.48-$0.54 for the fourth quarter of 2015.

On September 24, 2015, the Company’s Board of Directors approved the repurchase of up to $100 million of its outstanding Class A common stock. The repurchases may be made using a variety of methods, which may include open market purchases, block trades, the implementation of a 10b5-1 plan, and/or other methods, in accordance with SEC and other applicable legal requirements. The Company does not intend to implement any program until following its third quarter letter to stockholders in late October. The timing, prices and volume of purchases will depend upon prevailing stock prices, the Company’s leverage ratio, general economic and market conditions and other considerations. The repurchase program does not obligate the Company to acquire any particular amount of common stock and the repurchase program may be suspended or discontinued at any time at the Company's discretion. The repurchase program is expected to be funded through free cash flow, a reduction in planned capital expenditures, and borrowings on the Company’s existing credit facilities.

Richard Stocking, Swift’s President and Chief Operating Officer, stated, “Although we are not satisfied with these developments, we are encouraged by many of the underlying operating trends we are experiencing in our business model. The benefits we are seeing with the new equipment and expect to realize over the next several years should far outweigh the short-term costs we are experiencing. Continued hard work across the organization is making a difference with driver satisfaction and turnover. This focus combined with the new technology we are implementing is having a favorable impact on our recent safety trends. We have a tremendous opportunity regarding the utilization of our fleet. This will be an area of hyper-focus for us as we move forward. In addition, we are focused on servicing our customers to ensure we are meeting and exceeding their needs and continuing to create win-win solutions to facilitate future growth in any environment.”

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