Swift Transportation: Second Largest IPO of the Year Despite Pricing Below Range

| About: Swift Transportation (SWFT)

Swift Transportation Company (NYSE:SWFT), a truckload transportation services company, priced its IPO on 15th December, 2010 below the expected range at $11 per share and was the second largest US IPO this year.

Business Overview (from prospectus)

We are a multi-faceted transportation services company and the largest truckload carrier in North America. At September 30, 2010, we operated a tractor fleet of approximately 16,200 units comprised of 12,300 tractors driven by company drivers and 3,900 owner-operator tractors, a fleet of 48,600 trailers, and 4,500 intermodal containers from 35 major terminals positioned near major freight centers and traffic lanes in the United States and Mexico. Our asset-based transportation services include dry van, dedicated, temperature controlled, cross border, and port drayage operations. Our complementary and more rapidly growing “asset-light” services include rail intermodal, freight brokerage, and third-party logistics operations. We use sophisticated technologies and systems that contribute to asset productivity, operating efficiency, customer satisfaction, and safety. We believe our fleet capacity, terminal network, customer service, and breadth of services provide us and our customers with significant advantages.

Offering: 73.3 million shares at $11 per share. All proceeds from this offering will be used for debt repayment.

Lead Underwriters: Morgan Stanley (NYSE:MS), BofA Merrill Lynch (NYSE:BAC), Wells Fargo Securities (NYSE:WFC)

Financial Highlights:

For the nine months ended September 30, 2010, revenue increased by $246 million, compared with the same period in 2009...Salaries, wages, and employee benefits increased by $0.3 million, to $552 million for the nine months ended September 30, 2010 compared with the same period in 2009...Purchased transportation expenses increased $76.2 million to $572 million for the nine months ended September 30, 2010 compared with the same period in 2009...Net loss for the nine months ended September 30, 2010 was $77.1 million as compared to $78.5 million for the nine months ended September 30, 2009...


We compete with thousands of other truckload carriers, most of which operate fewer than 100 trucks. To a lesser extent, we compete with railroads, less-than-truckload carriers, third-party logistics providers, and other transportation companies. The 25 largest for-hire truckload carriers are estimated to comprise approximately 7.3% of the total for-hire truckload market, according to 2009 data published by the ATA. The principal means of competition in our industry are service, the ability to provide capacity when and where needed, and price. In times of strong freight demand, service and capacity become increasingly important, and in times of weak freight demand pricing becomes increasingly important. Because most truckload contracts (other than dedicated contracts) do not guarantee truck availability or load levels, pricing is influenced by supply and demand.

Additional Resources: