News Releases -
Business & Economy
Written by Tim Albrecht
Tuesday, 12 November 2013 15:34
(DES MOINES) – Gov. Branstad today launched an innovative new public-private partnership called Home Base Iowa, an effort that will match military veterans with jobs available across Iowa.
Home Base Iowa will raise private funds to support national targeted marketing efforts to veterans, including in-person outreach, a social media campaign and outreach through military publications.
Former Congressman Leonard Boswell and Casey’s General Stores CEO Bob Myers will co-chair the effort.
“Through their service, veterans have already proven they share the values we hold dear as Iowans - hard work, leadership, and patriotism, among others,” said Branstad. “We'll be calling upon the business community to partner with Home Base Iowa to help us meet our goals of increasing employment in this state, decreasing veterans’ unemployment, and recruiting high quality individuals to Iowa.”
Several hundred thousand veterans will leave the service over the next few years, while having a higher unemployment rate nationally.
Gov. Branstad notes that in his travel to Iowa’s 99 counties, he’s heard from companies that are ready to hire, but struggle to find workers with the right skills.
“We repeatedly hear from employers that they are ready to hire,” said Branstad. “We've made significant investments in developing the skills of Iowa's workforce - through education reform, increased support for community colleges, the STEM initiative, and Skilled Iowa. However, this skills gap still exists. Home Base Iowa is a public-private partnership which will recruit veterans to come to Iowa to work, to become part of our communities – to be Iowans.”
Branstad made the announcement during his weekly news conference, held at the Iowa Gold Star Museum at Camp Dodge in Johnston.
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News Releases -
Business & Economy
Written by Heartland Express
Tuesday, 12 November 2013 15:31
NORTH LIBERTY, Iowa, Nov. 11, 2013 (GLOBE NEWSWIRE) -- The Board of
Directors of Heartland Express, Inc. ("Heartland") (Nasdaq:HTLD) is
pleased to announce today that it has acquired 100% of the stock of
Gordon Trucking, Inc. of Pacific, Washington ("GTI") and certain
associated assets in transactions valued at approximately $300 million.
With combined total revenue of approximately $1 billion and a terminal
network spanning from Washington to Florida and from Pennsylvania to
Southern California, Heartland estimates the combined companies will
operate the fifth largest asset-based truckload fleet in North America.
Steve and Scott Gordon have joined Heartland's management team. Larry
and Virginia Gordon will retire after 50 years of building GTI, and
Larry Gordon has joined Heartland's Board of Directors. The
transactions are expected to be immediately accretive to Heartland's
earnings per share, excluding transaction-related expenses.
-- Total transactions value at closing of approximately $300 million
consisting of cash, Heartland stock, and assumed GTI debt, before taking
into account approximately $60 million in net present value of expected
future cash tax savings attributable to a Section 338(h)(10) tax
-- Total transactions valued at closing, on a debt-free, cash-free basis,
at approximately 5.0x adjusted earnings before interest, taxes,
depreciation, and amortization ("Adjusted EBITDA") for the twelve months
ended September 30, 2013 ("LTM") (approximately 4.0x LTM Adjusted EBITDA
considering net present value of expected future cash tax savings).
Adjusted EBITDA is a non-GAAP financial measure. See Appendix for
reconciliation and non-GAAP disclosures.
-- Earn-out of up to $20 million strongly aligned with goal of
approximately $30 million in consolidated adjusted operating income
improvements through 2017.
-- GTI's West Coast-centered operations and terminal network dramatically
increase Heartland's size, geographic coverage, and customer
-- GTI's customer service, safety, and driver focus are similar to
Description of Transaction
Heartland acquired 100% of the outstanding voting and non-voting stock
of GTI and certain associated assets. At closing, the transactions were
valued at approximately $300 million before taking into account the net
present value of future cash tax savings, the potential earn-out, and
any post-closing working capital adjustment. Heartland expects to use
approximately $165 million of its cash reserves and expects to have
approximately $95 million in outstanding debt after the transaction and
repayment of assumed GTI debt.
The consideration at closing included approximately $150 million in
assumed or refinanced GTI debt and $150 million paid to the
stockholders of GTI and associated asset owners. Payments to
stockholders of GTI and associated asset owners were approximately $110
million in cash and approximately $40 million in Heartland's common
stock. The allocation was approximately $14 million for voting stock,
$121 million for non-voting stock, and $15 million for associated
assets. The Gordon family has agreed to retain a substantial portion of
its Heartland stock through 2017 to align the family's interests with
the interests of Heartland's other stockholders.
GTI was an S corporation for federal tax purposes and passed through
most of its income tax attributes to its stockholders. The transaction
included an election under Internal Revenue Code Section 338(h)(10),
under which Heartland will acquire tax basis of approximately $191
million relating to revenue equipment and other fixed assets. The
balance of the transaction value, after adjustments, will be allocated
to intangible assets. Future tax deductions associated with the
increase in tax basis and deductible intangible assets are expected to
generate cash tax savings with a net present value of approximately $60
million (discounted at 6%). The actual cash savings will depend on the
final purchase price allocation, the amount and timing of future
taxable income and deductions, any earn-out achieved, escrow releases,
changes in law, and other factors.
GTI is a truckload carrier headquartered near Seattle, Washington. GTI
was founded by the Gordon family in 1946, and the family remains
actively involved in the business. GTI is primarily focused on dry van
markets but also gains approximately 14% of its revenue from
refrigerated operations and 7% from freight brokerage operations. GTI's
equipment includes approximately 2,000 tractors and 6,500 trailers.
GTI's average length of haul is approximately 400 miles.
GTI's service center network is concentrated in strategic markets in
the western United States, with major locations in Washington, Oregon,
Northern California, Southern California, and Idaho. These locations
have no overlap with Heartland's locations and are expected to provide
substantial geographic diversity to Heartland's overall operations.
Other locations include Arizona, Wisconsin, Illinois, and Indiana. Most
of these facilities are leased from limited liability companies
controlled by the Gordon family.
GTI has a diverse and high-quality customer base, with major customers
including Georgia Pacific, General Mills, Pepsi, Wal-Mart, and
Unilever. Only one customer accounts for more than 10% of GTI's total
revenue, and on a combined basis, no customer is expected to account
for more than 8.5% of combined Heartland/GTI total revenues. Of GTI's
ten largest customers by revenue, only 5 are among Heartland's top 10
GTI's drivers and owner-operators offer a high level of service as well
as a commitment to safe operations. GTI has received numerous "carrier
of the year" and similar service awards from its customers. GTI has
been the Washington Trucking Association's safe carrier of the year for
six straight years, is the 2012 Truckload Carriers' Association safest
carrier in the U.S. (100+ million miles category), and proudly employs
the reigning TCA truck driver of the year. Both companies exhibit
outstanding Compliance, Safety, Accountability ("CSA") scores as
reported by the U.S. Department of Transportation.
Expected Financial Impact
GTI generated approximately $433 million in total revenue and $20
million in operating income, during the twelve months ended September
30, 2013. For the same period, Heartland estimates that GTI generated
approximately $22 million of adjusted operating income and $60 million
of Adjusted EBITDA. The adjustments consist primarily of expenses under
the prior ownership that are not expected to continue, as well as items
considered to be unusual. Adjusted financial items are non-GAAP
financial measures. See Appendix for reconciliation to the most closely
comparable GAAP measure and other disclosures.
Heartland expects to recognize approximately $1.0 million in
transaction-related expenses in the fourth quarter of 2013. Additional,
unknown costs may arise as the acquisition is integrated.
Immediately before the transaction, Heartland's tractors had an average
age of 1.9 years and its trailers had an average age of 3.2 years.
Immediately before the transaction, GTI owned or leased approximately
2,000 tractors with an average age of 3.2 years and 6,500 trailers with
an average age of 5.5 years. GTI's operations include a substantial
amount of very short and specialized hauls, and the fleet age is
expected to become modestly newer but remain somewhat older than
Heartland's historical fleet age.
Heartland and GTI have identified a goal of $30 million in consolidated
adjusted operating income improvements (excluding gains on sale and
certain other items) by the end of 2017 compared with combined adjusted
operating income (excluding gains on sale and certain other items) of
approximately $96 million for Heartland and GTI for the twelve months
ended September 30, 2013. The major areas where synergies are expected
include implementing best practices across the organization, increasing
in-house maintenance using the combined network, optimizing staffing
and locations, purchasing economies, conforming insurance and claims
structure, and gaining efficiencies in revenue yield and empty miles
from optimizing the combined operations. The parties expect to gain
these improvements relatively steadily from 2014 through 2017, and a
substantial portion of the earn-out is aligned with this goal.
Heartland issued approximately 2.9 million shares of its common stock
from treasury shares in the GTI acquisition. Shares were valued at
$14.37 per share, the average closing price for the ten trading days
ended November 8, 2013. Heartland's outstanding share count will
increase to approximately 87.7 million, and its diluted share count
will increase to approximately 87.9 million. Heartland expects to
continue paying its regular quarterly dividends of 2 cents per share.
The expected consolidated book effective tax rate is expected to
increase based on the mix of state taxes.
Michael Gerdin, Chairman, President, and CEO of Heartland, commented:
"We searched for many years for the best fit to expand our capabilities
for customers, our opportunities for drivers, and our growth for our
stockholders. With GTI, Heartland acquires a major presence in the
West, affording the combined customer base significant capacity
nationwide through what is expected to be one of the five largest
asset-based truckload fleets in North America. GTI has a well-earned
reputation for superior customer service, with a modern fleet and a
strong safety record. Culturally speaking, it is an excellent fit. I am
pleased that Steve and Scott Gordon have joined Heartland's management
team and Larry Gordon has joined our board of directors.
"We first approached Larry, Virginia, Steve, and Scott some time ago.
As the conversations continued early this year, we jointly identified a
few guiding principles: a fair price, substantial earnings accretion, a
unified culture, the commitment of Steve and Scott to joining the team,
and alignment of interest between the Gordon family and our other
stockholders. At each stage, we were able to progress the discussion
because we kept these guideposts in mind. In the end, we have an
energized team with strong alignment and a commitment to operating a
much larger company at the industry-leading profitability Heartland's
stockholders have come to enjoy. I could not be more excited about the
opportunity or more pleased to add the Gordons to our team."
Larry Gordon, founder and Chairman of GTI, commented: "From the
beginning, I told Mike that the owners were not eager to sell, but we
would consider Heartland's proposal because of our desire to be part of
the best truckload carrier in the industry. Through these transactions,
our people have the opportunity to build on a strong foundation, learn
best practices, contribute to an industry leader, and gain access to
new customers and geographies. We were excited to receive a substantial
portion of the family's value in Heartland shares and become one of
Heartland's largest stockholders. We believe in the transactions and in
our ability to contribute greatly to the combined company."
New Credit Facility
Heartland has entered into a five-year, unsecured $250 million
revolving credit facility supplied by Wells Fargo Bank, N.A. Borrowings
under the facility will bear interest at a floating rate of LIBOR +
62.5 basis points annually (currently an annual rate of 0.865%). Unused
amounts are subject to a commitment fee of 6.25 basis points annually.
After giving effect to the closing and refinancing of existing GTI
debt, Heartland expects to have available borrowing capacity of
approximately $155 million to fund working capital, capital
expenditures, and general corporate uses.
The revolving credit facility contains customary terms and conditions.
Heartland must maintain a consolidated leverage ratio (total funded
debt divided by Adjusted EBITDA) of less than 2:00 to 1:00. In
addition, Heartland must generate at least $1.00 of adjusted net income
annually and maintain tangible net worth of at least $200 million.
Heartland expects to be in compliance with the financial covenants for
the foreseeable future.
Scudder Law Firm, P.C., L.L.O. served as transaction and legal advisor
to Heartland. Wells Fargo Bank, N.A. provided financing, and Wells
Fargo Securities, LLC provided financial advice.
Moss Adams Capital LLC served as financial advisor, and Perkins Coie
LLP served as legal advisor, to GTI and its stockholders.
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 Michael Gerdin
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.
A leader in transportation and logistics, Heartland Express provides
collaborative truckload transportation service that enables companies
to deliver exceptional service across their transportation network to
improve customer satisfaction. Companies choose Heartland Express for
its award winning on-time pickup and delivery, fleet capacity to cover
commitments scaled to their needs, leadership in providing information
about their shipments, and its performance in moving beyond the
transactional to the strategic relationship to solve problems.
Heartland is based in North Liberty, IA with nationwide service from
Washington to Florida and New England to California.
This report contains forward-looking statements relating to the
expected results of acquiring GTI, future capital expenditures and debt
levels, expected synergies, and financial goals. Forward-looking
statements are usually identified by words such as "anticipates,"
"believes," "estimates", "plans," "projects," "expects," "hopes,"
"intends," "will," "could," "may," or similar expressions. These
statements are based on information currently available and speak only
as of the date the statement was made. Such forward-looking statements
are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are inherently uncertain, are based upon the current
beliefs, assumptions and expectations of management, and are based on
current market conditions, all of which are subject to significant
risks and uncertainties as set forth in the Risk Factors Section of our
Annual Report Form 10-K for the year ended December 31, 2012, as those
risk factors may be updated from time to time. As a result of these and
other factors, actual results may differ from those set forth in the
forward-looking statements. The prices of the Company's securities may
fluctuate dramatically. The Company makes no commitment, and disclaims
any duty, to update or revise any forward-looking statements to reflect
future events, new information or changes in these expectations.
1. Reconciliation of GTI's estimated Adjusted EBITDA to GTI's net
income for the twelve months ended September 30, 2013.
This press release contains EBITDA and Adjusted EBITDA, which are
"non-GAAP financial measures" as that term is defined in Regulation G
of the Securities Exchange Act of 1934. In accordance with Regulation
G, Heartland has reconciled these non-GAAP financial measures to their
most directly comparable U.S. GAAP measure.
EBITDA and Adjusted EBITDA are included because Heartland used these
measures in evaluating the GTI acquisition, and management believes
these measures provide investors and securities analysts information
used generally in evaluating acquisitions in Heartland's industry.
EBITDA and Adjusted EBITDA are not intended to represent, and should
not be considered more meaningful than, or as an alternative to, net
income. Investors should not place undue reliance on these measures, as
Heartland primarily evaluates its results using net income.
(DOLLARS IN THOUSANDS) September
(Unaudited) 30, 2013
Net Income(1) $ 16,331
Income tax expense(1) 188
Interest expense 3,493
Depreciation and amortization 37,561
Earnings before interest, taxes,
depreciation and amortization
Discontinued owner expenses 983
Discontinued facilities and
aircraft costs 1,130
Other unusual items 410
Adjusted EBITDA $ 60,096
(1) GTI was an S corporation prior to
acquisition date and thus did not
recognize federal or most state income
(2) Adjustment items are not expected to
continue. These do not constitute all
adjustments that are required or permitted
under Regulation S-X.
CONTACT: Heartland Express, Inc.
Mike Gerdin, Chief Executive Officer
John Cosaert, Chief Financial Officer
News Releases -
Business & Economy
Written by Megan Brown Bennett
Monday, 11 November 2013 14:52
Opening Event Kicks Off With Ribbon Cutting on December 6
(Kansas City, MO – DATE) – Beauty Brands, a one-stop beauty shopping concept, uniting salon brand haircare, prestige skincare and makeup, nail care, bath and body, as well as a full-service salon and spa under one roof, will open its first Davenport, Iowa store on December 6.
Located at the Elmore Marketplace, the new store will open with a ribbon cutting officiated by the Quad Cities Chamber of Commerce at 8:00 a.m. On its opening night between 5:00 and 7:00 p.m., Beauty Brands will donate 25 percent of proceeds from its new location’s sales to Winnie’s Place, a shelter program that assists women, with or without children, who are homeless or victims of violence. Samples, special giveaways and exclusive, limited-time offers will be available to customers who attend the store opening, while supplies last.
Beauty Brands’ new location brings Davenport a new generation in store design and the ultimate convenience for customers who can browse the aisles for more than 10,000 salon-quality hair, skin and nail products paired with a full-service salon and spa. The centerpiece of the store’s dynamic layout and design is a unique retail environment called “the studio” featuring a curated assortment of prestige makeup and skincare brands. Here customers will find a mix of brands such as Smashbox, Philosophy, Tarte, Murad, Dermalogica and more.
“Beauty Brands is proud to bring the utmost in choice and convenience to offer our clients in Davenport,” said David Bernstein, president of Beauty Brands. “We are equally excited to partner with Winnie’s Place and look forward to being part of this vibrant community.”
The new Beauty Brands Davenport store is located at Elmore Marketplace, 4201 Elmore Avenue, Davenport, IA 52807. Tel. 563-355-4874. For further information, please contact Megan Brown Bennett of Light Years Ahead at (310) 505-4224.
# # #
About Beauty Brands
Beauty Brands is the place for anything and everything beauty, always at a great value. Beauty Brands stores offer thousands of salon brand retail products alongside a complete full service spa and salon, all in a convenient, one-stop location. Knowledgeable associates and salon and spa professionals are always on staff to help each client find their own best look and the tools to create it. Stores are open late every day until 9 p.m. and on Sundays until 6 p.m. Customers may also shop online for head-to-toe beauty needs at beautybrands.com.
About Winnie’s Place
Winnie’s place is a shelter program to assist women, with or without children, who are homeless or victims of violence. The structured program helps families move towards a world of new opportunities. Winnie’s Place offers comprehensive support services free of charge. These services include safe & secure shelter, food, clothing, group support, individual support, case management, parenting support, bible study, spiritual support, encouragement, acceptance and hope. As a program of the Churches United of the Quad City Area, Winnie’s Place serves the greater Quad City area
News Releases -
Business & Economy
Written by Ginny Grimsley
Monday, 11 November 2013 14:46
‘It’s a Relationship That’s Not Going Away,’ Advises Female
If you’re a woman, chances are good that in the years ahead, it will be you and you alone who’s responsible for managing your money.
That could be a problem: Even among the very affluent, many women admit they know little to nothing about bigger-picture money concerns such as financial planning and investment management, according to a recent survey.
“A lot of women cede those responsibilities to their husbands or partners because they say they don’t have the time, interest or opportunity to learn,” says Luna Jaffe, Certified Financial Planner™, psychotherapist, and author of the new “Wild Money: A Creative Journey to Financial Wisdom” and its companion workbook, “Wild Money: A Financial Field Guide and Journal,” (www.lunajaffe.com).
“Things are changing- more women are choosing not to marry or have been devastated by divorce or death of a loved one. They recognize they can’t ignore money any more, but don’t know where to turn or who to trust.”
But even women with a net worth of at least $1 million concede they aren’t especially knowledgeable about money management. In the Women & Wealth Study sponsored by GenSpring Family Offices, only a third said they know a lot about financial planning, and 30 percent said the same for investment management.
Part of the problem is that financial education is male-oriented, catering to how men’s brains are wired and what appeals to them, Jaffe says.
“When we approach it creatively and from a more emotion-based perspective, women are not only drawn to learning about it, they have no trouble getting it,” Jaffe says.
She offers these three things every woman should know about their relationship to money:
• Your investment decisions are influenced by your emotional baggage.
We all bring baggage into our relationships, and it’s no different with money, Jaffe says. When you’re not aware of the baggage operating quietly in the background, you may think you’re making smart decisions when you’re actually simply reacting to past experiences. And those might not have been even your own experiences! “Whether you or a loved one suffered the consequences of a bad financial investment, it can color your thinking in many ways, from destroying your confidence in your judgment to writing off all similar investments as ‘bad.’ ’’ Take time to reflect on the experiences you’ve had with investing, the decisions you made, and the conclusions you made as a result. What stories do you tell yourself because of these experiences?
• Understand the emotional response with which you receive money, whether a paycheck, a gift or an inheritance. It’s important to receive money with grace – to savor it, to be grateful for it, to be at peace with it. But depending on the circumstances by which it arrives, and lingering emotions from past experiences, we sometimes receive money with anger, guilt, resentment, greed, entitlement or any of a host of other negative emotions. This can lead to self-destructive actions. Jaffe shares a story about receiving a small inheritance from her father at a time when she had no money. She loaned the whole sum to a friend, who promptly vanished. “I was still grieving his death, and I received money that represented his legacy, yet it was only a tiny fraction of his estate – his second wife got everything else. Deep inside, I felt ripped off. Perhaps I thought by loaning my inheritance, I could wash the confusion and grief out of the money making it clean and safe to use. ”
• Know your Comfort Zone for risk and stay within it. Investment comes with risks; you can assume a lot for potentially greater returns, or less for lower returns. Understanding your Comfort Zone and staying within it will help you stay committed to your financial plan. Would your best friend describe you as a risk taker? If you got $100,000 with instructions to invest it all in just ONE of these options – stocks, a savings account, a mutual fund portfolio of stocks and bonds, or your best friend’s start-up – which would you choose? Knowing whether you’re very conservative; happy with a little growth; comfortable with some ups and downs; or in for adventure will help you avoid taking financial advice that makes you uncomfortable.
About Luna Jaffe
Luna Jaffe is a Certified Financial Planner™ and Accredited Asset Management Specialist with more than 10 years of financial advising experience. She holds a master’s degree in Depth Psychology and a bachelor’s in Bilingual Education. Jaffe is a popular speaker whose creative compassionate approach to financial guidance differs sharply from male-oriented approaches. Securities and advisory services offered through KMS Financial Services, Inc.