Post Gordon ~ Thoughts, Commentary & Reflections

Gordon was the first trucking job I ever had where I was supposed to work and NOT get paid for that work. My hat's off to California. Leading the way.

Good ol' MoonBeam.

 

You a bettin' man, General?









/Way past my curl up and sleep time. G'nite! I think the guy I knew played Texas Hold 'Em. Took a blackjack (counting) class myyself and for a while flew to LV every weekend. Conservaive on my bets. It was just wages. And I had wages. Truck driver.

 

Heartland announced today purchase of Gordon Trucking.

Gordon drivers apparently received QC from Steve Gordon.

Confirmed with Heartland Safety. Heartland actually has a BETTER CSA than Gordon, except for Driver Safety, 30.7%. HOS, 8.5%; Vehicle Maintenance, 11.3%. Heartland is a debt-free (or was), 2800 seat powerhouse, purchasing 2000 seat powerhouse Gordon.

Heartland's great equipment (11.3%--about half Gordon's CSA) and iron-willed compliance with HOS (8.5%--less than half Gordon's) makes me think Heartland with 50% higher Driver Safety score is more push, push than Gordon. Heartland may not be as safe a place to park your CDL and the consequences for service failure possibly higher. Still looking for really active, current Heartland thread.

Nothing on either web site yet and nothing on the web so far that I could find. Have read that intention is to run separate like USX/Arnold, Swift/Central Refrigerated. To absorb Gordon (the way Gordon absorbed Buske) would be truly disruptive. Apparently Steve Gordon QC msg couched in guarded language about 'transition' period. Scott and Steve Gordon join Heartland management team.

What Gordon drivers at risk? Highest paid? Lowest producers? Most service failures? What would change, if anything? How will this affect construction of new Indy terminal? My impression was tolerance on Gordon's part for drivers who had been there awhile but not especially productive. One long-time driver said he could never deliver Staples on time, for example. One O/O told me he drives a flat 55 mph. Period. Heartland may not be so tolerant. My impression was Gordon didn't want to fire ANYONE, except for safety reasons. Heartland may be a little more tolerant--if you delivered on time!

My bet Heartland wants to rock boat above water line as little as possible while at the same time making important adjustments below.

Heartland announcement: http://www.heartlandexpress.com/uploadedFiles/Investor/Gordon%20Transportation%20Release.pdf (thanks to LoboSolo posted at joseph's thread)

Since Gordon was a privately-held S corp, Heartland's announcement probably has more public information about Gordon than has ever been made available!

 

Some highlights of the Heartland announcement:

• Purchase at 5x earnings!
• $110 million in cash, $40 million in Heartland stock
• Total purchase value $300 million (primarily due to assumed Gordon debt)
• Heartland acquired 100% Gordon voting and non-voting stock
• Gordon family will retain Heartland stock until 2017
• GTI average length of haul 400 miles
• Most Gordon facilities owned by Gordon-controlled limited liability firms
• 14% of Gordon revenue refrigerated, 7% brokerage
• Only one customer accounts for more than 10% Gordon revenue
• Of GTI's largest accounts, only 5 are in Heartland's top ten
• Gordon had $433 million total revenue, $20 million operating revenue
• Heartland tractors average 1.9 years, trailers 3.2 years
• Gordon tractors average 3.2 years, trailers 5.5 years
• Intention is to gain $30 million in synergic operating revenue by 2017
• $30 million in expected gains from:

1. Best practices across both organizations
2. Increased in-house maintenance
3. Optimizing staffing and locations
4. Purchasing economies
5. Conforming insurance and claims structure
6. Efficiencies in revenue yield and empty miles
7. Optimizing the combined operations

• Heartland transferred 2.9 million treasury shares valued at $14.37
• Larry Gordon joins Heartland board of directors
• Combined, Heartland/Gordon becomes 5th largest asset-based carrier
• Heartland has new $250 million credit line with Wells Fargo
• WF credit line contingent on $1 adjusted annual net income (per share)
• WF credit line also contingent on $200 million net worth

 

Conference Call

Heartland will conduct a live conference call Tuesday morning at 10:00 am EST. The dial-in number is 866-710-0179, access code 28539. Heartland representatives will include Heartland's CEO MichaelGerdin and Heartland's CFO John Cosaert. Also present will be GTI's CEO Larry Gordon, GTI's COO Steve Gordon, and GTI's CIO Scott Gordon. Heartland representatives will be referring to a slide presentation that will be available at www.heartlandexpress.com/investors and on Form 8-K filed with the U.S.Securities and Exchange Commission. Telephone replay will be available for 30 days beginning tomorrow by dialing 877-919-4059 (334-323-7226 international), access code 12686180.

 

Heartland (HTLD) opened on NASDAQ at $14.27, closed at $14.32, up 0.28%.

For more info on HTLD, go to finance.yahoo.com and search HTLD.