Heartland Express, Inc. Acquires Gordon Trucking, Inc.

Read in Truckers News, Knight owns 11% of USA Truck stock and that if they continue to refuse the offers to buy Knight may do a hostile takeover

 

Sleepyfoot, they may have had no debt, but they now have $250,000,000 in debt financed by Wells Fargo to bankroll this takeover. And as for profit margin more than likely it is at the expense of the driver's comfort....I am looking for specifics, I am NOT looking to run the midwest, the reason I joined Gordon was to go West and the APU's were a big attraction too. I can get no answers other than "nothing will change during the transistion period"or fed a line of corporate nonsense, I have a very fine nose when it comes to sniffing out corporate cow droppings.....

 

I understand the desire to attempt to put a positive spin on this. It is only natural. Like survival instincts.

However. . I see it like this.. suppose I just went to the doctor and he told me I had cancer. You have 6 to 12 months to live. With aggressive treatment we may stretch it to 2 years at best. Friends will say you may stretch it out but all you know is no matter what.. you are going to die.. everybody dies but you now know how and when.

Every good job I have had has ended too soon. I wondered how gti would end.. now I know.. and when.

It is terrible to sit by and watch a loved one slowly succumb to cancer. It is going to be heartbreaking to sit by and watch gti slowly succumb to its final end.. and end it will.

Eventually it will become heartland. They may even keep the blue trucks with gti on them but it will be heartland nonetheless.

GORDON TRUCKING
1946-2013
R.I.P.

 

US Fleet ran long haul (over 1000 miles), 8% of Gordon freight, now 4% or less of HTLD. Gerdin will look at his existing 3%-5% teams. Absorb US Fleet into his teams, I think. Savings from fewer trucks.

By atttrition at first. But if he has 20 drivers in 20 trucks become 20 drivers in 10 trucks, he's just freed up $1.3 million ($130,000/truck) in rolling assets.

With 120 drivers (some already teams?) on Mid-West US Fleet board, he sees up to 60-truck reduction right there. Almost $8 million ($1.3 million x 6) in freed up rolling assets.

His concern not to lose current top-notch GTI drivers will slow it down. Even if only recruiting teams from within (a good idea), he has almost 5,000 drivers now to recruit from to get his 3%-5% teams.

What he said at the conference call was that there would always be long haul loads that missed the train or boat and need to move quickly. No plans to grow long haul, though. Just that teams remain part of HTLD mix.

 

The 120 us fleet is all solo drivers..

Teams are a different board

 

After reading this thread and Victor's thread, I don't think that Victor is a truck driver.

 

PMd you. Off-topic and couldn't be more wrong.

Vic

 

So how stark will this transition period be?

Pretty stark.

If you go to Slide 17 of the conference call presentation (http://www.heartlandexpress.com/uploadedFiles/Investor/Investor Slides 11.11.13.pdf) you'll see 'Estimated Combined Condensed Statements of Income Data'.

You'll see that HTLD had $110 million of operating income on $425 million in revenue. That's an operating income of 26% revenue. ($425 - $110 = $315, $315/$425 = 74%, 100% - 74% = 26%)

Gordon had $343 million in revenue, only $82 million less. But only $22 million in operating income. That's an operating income of just over 6% revenue. ($343 - $22 = $321, $321/$343 = 93.5%, 100% - 93.5% = 6.5%)

Costs 74% of revenue vs Costs 93.5% of revenue.

HTLD can't and won't try take all that extra expense out of GTI drivers hides, it can't. It helps to show, though, what's in the 90% (89.86%) costs per cent of revenue of the combined income data.

It shows also why Gerdin's confident he can bring combined costs down into the low 80%s. HTLD's already in mid 70%s now.

'Keep the best, get rid of the rest.'

 

How can anyone tell, when both companies suck so bad that blow has been sucked out of the dictionary?

 

Even drivers who happily left Gordon don't feel that way.

2,000 broken hearts out there.

Excellent equipment, great 24/7 driver support, tons of freight.