With third-quarter losses of $9.5 million, Simon Transportation, Salt Lake City, is getting some financial help from chairman Jerry Moyes, CEO and largest stakeholder in Swift Transportation.
Last year, Moyes bought a large stake in Simon and was made chairman of the board, replacing Simon founder Richard D. Simon.
Tuesday, Simon Transportation announced that although revenues for the third quarter of their fiscal year engine June 30 increased 22.6 percent over last year to $74.7 million, the net loss was $9.5 million, compared with a net loss of $267,000 for the corresponding quarter a year ago.
For the first nine months of fiscal 2001, revenue increased 20.2% to $204.3 million compared with $170.0 million for the corresponding period in fiscal 2000. Net loss was $21.3 million, compared with a net loss of $331,000 in the fiscal 2000 period.
Simon CEO Jon Isaacson blamed the poor results on high fuel costs, increased insurance and claims expense, and soft freight demand. Although higher driver wages also hurt the bottom line, Isaacson said, the company says the pay raise is paying off with a more experienced driver base, lower turnover, and better customer service, which in turn is leading to new customers.
During the quarter, "certain entities controlled by the family of Jerry Moyes," chairman of the board, advanced approximately $13.7 million to Simon Transportation for equipment purchases and general corporate purposes. At the end of the quarter, the Moyes partnership converted $6.7 million of the advances into equity in the form of preferred stock and preferred stock warrants. The remaining $7 million advance was repaid after the end of the quarter.
Simon is negotiating with "a corporation controlled by Mr. Moyes" concerning the terms of an additional $2 million investment commitment.
The company also increased its borrowing capacity by refinancing its line of credit and real estate loan. Moyes personally guaranteed a significant amount of the company's borrowing.
Last year, Moyes bought a large stake in Simon and was made chairman of the board, replacing Simon founder Richard D. Simon.
Tuesday, Simon Transportation announced that although revenues for the third quarter of their fiscal year engine June 30 increased 22.6 percent over last year to $74.7 million, the net loss was $9.5 million, compared with a net loss of $267,000 for the corresponding quarter a year ago.
For the first nine months of fiscal 2001, revenue increased 20.2% to $204.3 million compared with $170.0 million for the corresponding period in fiscal 2000. Net loss was $21.3 million, compared with a net loss of $331,000 in the fiscal 2000 period.
Simon CEO Jon Isaacson blamed the poor results on high fuel costs, increased insurance and claims expense, and soft freight demand. Although higher driver wages also hurt the bottom line, Isaacson said, the company says the pay raise is paying off with a more experienced driver base, lower turnover, and better customer service, which in turn is leading to new customers.
During the quarter, "certain entities controlled by the family of Jerry Moyes," chairman of the board, advanced approximately $13.7 million to Simon Transportation for equipment purchases and general corporate purposes. At the end of the quarter, the Moyes partnership converted $6.7 million of the advances into equity in the form of preferred stock and preferred stock warrants. The remaining $7 million advance was repaid after the end of the quarter.
Simon is negotiating with "a corporation controlled by Mr. Moyes" concerning the terms of an additional $2 million investment commitment.
The company also increased its borrowing capacity by refinancing its line of credit and real estate loan. Moyes personally guaranteed a significant amount of the company's borrowing.
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