Simon Transportation Services, Salt Lake City, had increased revenues for the fourth quarter compared to last year, but higher losses.

Revenue for the fourth quarter increased 21.3% to $74.5 million, compared with $61.4 million for the corresponding quarter of fiscal year 2000. Net loss was $20.3 million, before a $6.4 million adjustment for an accrued loss on guaranteed lease residual values. This compared with a net loss of $6.9 million for the corresponding quarter a year ago.
For the fiscal year that ended Sept. 30, revenue increased 20.5% to $278.8 million compared, with $231.4 million for the previous year. Net loss was $41.7 million before the $6.4 million adjustment. This compared with a net loss of $11.1 million for 2000.
Company officials say the results were affected by high fuel costs, increased insurance and claims expense, soft freight demand, and extremely high driver turnover, which led to a large number of tractors without drivers.
In addition to the operating loss, the company recognized a $6.4 million loss relating to equipment values, representing an accrual for the difference between the residual values of leased equipment the company has guaranteed and the projected market value of the equipment at lease termination.
The company has deferred making payments on leases covering substantially all tractors and trailers for several months, placing them in default under leases, as well as on their line of credit and other borrowings. The company says it is seeking to restructure equipment leases to waive the payment defaults, extend the duration of the leases, and spread the deferred payments over the extended lease term. A key part of this restructuring is to negotiate with their tractor manufacturer to extend buyback protection on the tractors to the new lease term. Simon officials say they hope to complete the lease and line of credit restructuring during the first calendar quarter of 2002.
The company also notes that it has consolidated terminals, cut the number of non-driver personnel, cut wages and benefits for remaining salaried employees, raised rates and are offering higher driver wages aimed at reducing turnover.
The company also reports while working on the restructuring, they have received significant financial support from Jerry Moyes, Chairman of the Board, and his affiliates.