Simon Transportation Services Inc. saw both revenue and operating losses grow in its third fiscal quarter of 2001. Revenue increased 22.6% to $74.7 million, compared with $60.9 million for the same period in 2000. Yet the company posted a net loss of $9.5 million compared with a net loss of $267,000 in the same period last year.
For the first nine months of fiscal 2001, Simon’s revenue increased 20.2% to $204.3 million compared with $170.0 million for the same period in fiscal 2000. Yet net losses surged to $21.3 million compared with a net loss of $331,000 in the same nine-month period last year.
“Our financial results were impacted significantly by high fuel costs, increased insurance and claims expense, and soft freight demand,” said Jon Isaacson, Simon’s CEO. “The soft freight demand contributed to poor equipment utilization, increased empty miles, and an inability to raise freight rates. Higher driver wages also hurt profitability.”
However, Isaccson added that the wage increase has contributed to a more experienced driver base, lower turnover, and better customer service. “Although these benefits did not fully offset the cost during the quarter, service to our customers continues to improve,” he said.
During Simon’s third fiscal quarter, certain entities controlled by the family of Jerry Moyes, Simon’s chairman, advanced approximately $13.7 million to the company for equipment purchases and general corporate purposes. Simon added that it is negotiating with a corporation controlled by Moyes concerning the terms of an additional $2 million investment commitment.