x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934
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AUTOINFO, INC.
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(Exact name of Registrant as specified in its charter)
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DELAWARE
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13-2867481
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(State or other jurisdiction of incorporation
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(I.R.S. Employer Identification number)
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or organization)
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6413 Congress Ave., Suite 260, Boca Raton, FL 33487
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(Address of principal executive office)
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(561) 988-9456
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(Registrant’s telephone number, including area code)
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LARGE ACCELERATED FILER ¨
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ACCELERATED FILER ¨
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|
NON-ACCELERATED FILER ¨
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SMALLER REPORTING COMPANY x
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Page
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||||
Part I. Financial Information:
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||||
Item 1.
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Consolidated Financial Statements:
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3
|
||
Balance Sheets
|
||||
June 30, 2011 (unaudited) and December 31, 2010 (audited)
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3 | |||
Statements of Income (unaudited)
|
||||
Three and Six months ended June 30, 2011 and 2010
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4 | |||
Statements of Cash Flows (unaudited)
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||||
Six months ended June 30, 2011 and 2010
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5 | |||
Notes to Unaudited Consolidated Financial Statements
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6 | |||
Item 2.
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Management’s Discussion and Analysis of Financial
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|||
Condition and Results of Operations
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11 | |||
Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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17 | ||
Item 4.
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Controls and Procedures
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17 | ||
Part II. Other Information
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||||
Item 6.
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Exhibits
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17 | ||
Signatures
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18 |
June 30,
2011
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December 31,
2010
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|||||||
Unaudited
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Audited
|
|||||||
ASSETS
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||||||||
Current assets:
|
||||||||
Cash and cash equivalents
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$
|
375,000
|
$
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316,000
|
||||
Accounts receivable, net of allowance for doubtful accounts of $841,000 and $392,000 as of June 30, 2011 and December 31, 2010, respectively
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50,083,000
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49,736,000
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||||||
Current portion of advances and other assets
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10,615,000
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2,117,000
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||||||
Prepaid expenses
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1,535,000
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1,139,000
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||||||
Deferred income taxes
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135,000
|
135,000
|
||||||
Total current assets
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62,743,000
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53,443,000
|
||||||
Fixed assets, net of accumulated depreciation
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591,000
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479,000
|
||||||
Advances and other assets, net of current portion
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4,677,000
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12,805,000
|
||||||
Total assets
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$
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68,011,000
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$
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66,727,000
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$
|
26,229,000
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$
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23,188,000
|
||||
Loan payable
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19,028,000
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22,432,000
|
||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity:
|
||||||||
Common stock - authorized 100,000,000 shares, $.001 par value; issued and outstanding 34,043,000 and 33,513,000 as of June 30, 2011 and December 31, 2010, respectively
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34,000
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34,000
|
||||||
Additional paid-in capital
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20,310,000
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20,228,000
|
||||||
Retained earnings
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2,410,000
|
845,000
|
||||||
Total stockholders’ equity
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22,754,000
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21,107,000
|
||||||
Total liabilities and stockholders’ equity
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$
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68,011,000
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$
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66,727,000
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Six Months Ended
June 30,
|
Three Months Ended
June 30,
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|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Gross revenues
|
||||||||||||||||
Transportation services
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$ | 161,381,000 | $ | 125,500,000 | $ | 86,438,000 | $ | 69,070,000 | ||||||||
Agent support services
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1,063,000 | 976,000 | 527,000 | 491,000 | ||||||||||||
Total revenues
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162,444,000 | 126,476,000 | 86,965,000 | 69,561,000 | ||||||||||||
Purchased transportation
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132,788,000 | 102,526,000 | 71,001,000 | 56,503,000 | ||||||||||||
Commissions
|
21,788,000 | 17,715,000 | 11,711,000 | 9,662,000 | ||||||||||||
Operating expenses
|
5,036,000 | 3,994,000 | 2,661,000 | 2,016,000 | ||||||||||||
159,612,000 | 124,235,000 | 85,373,000 | 68,181,000 | |||||||||||||
Income from operations
|
2,832,000 | 2,241,000 | 1,592,000 | 1,380,000 | ||||||||||||
Interest expense
|
283,000 | 354,000 | 122,000 | 193,000 | ||||||||||||
Income before income taxes
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2,549,000 | 1,887,000 | 1,470,000 | 1,187,000 | ||||||||||||
Income taxes (Note 2)
|
984,000 | 734,000 | 565,000 | 459,000 | ||||||||||||
Net income
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$ | 1,565,000 | $ | 1,153,000 | $ | 905,000 | $ | 728,000 | ||||||||
Net income per share:
|
||||||||||||||||
Basic
|
$ | .05 | $ | .03 | $ | .03 | $ | .02 | ||||||||
Diluted
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$ | .04 | $ | .03 | $ | .03 | $ | .02 | ||||||||
Weighted average number of common shares:
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||||||||||||||||
Basic
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33,760,000 | 33,496,000 | 33,916,000 | 33,496,000 | ||||||||||||
Diluted
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35,415,000 | 34,548,000 | 35,515,000 | 34,711,000 |
Six Months Ended
June 30,
|
||||||||
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
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$ | 1,565,000 | $ | 1,153,000 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||
Change in allowance for doubtful accounts
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449,000 | 277,000 | ||||||
Depreciation and amortization
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104,000 | 128,000 | ||||||
Stock-based compensation expense
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65,000 | 63,000 | ||||||
Deferred income taxes
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- | 627,000 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
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(796,000 | ) | (8,106,000 | ) | ||||
Prepaid expenses
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(396,000 | ) | (406,000 | ) | ||||
Accounts payable and accrued liabilities
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3,039,000 | 2,880,000 | ||||||
Net cash provided by (used in) operating activities
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4,030,000 | (3,384,000 | ) | |||||
Cash flows from investing activities:
|
||||||||
Advances and other assets
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(370,000 | ) | 102,000 | |||||
Capital expenditures
|
(215,000 | ) | (73,000 | ) | ||||
Net cash provided by (used in) investing activities
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(585,000 | ) | 29,000 | |||||
Cash flows from financing activities:
|
||||||||
Exercise of stock options
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18,000 | - | ||||||
Increase (decrease) in loan payable, net
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(3,404,000 | ) | 3,358,000 | |||||
Net cash provided by (used in) financing activities
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(3,386,000 | ) | 3,358,000 | |||||
Net change in cash and cash equivalents
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59,000 | 3,000 | ||||||
Cash and cash equivalents, beginning of period
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316,000 | 67,000 | ||||||
Cash and cash equivalents, end of period
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$ | 375,000 | $ | 70,000 |
Three Months Ended June 30,
|
||||||||||||||||
2011
|
2010
|
|||||||||||||||
Current
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Deferred
|
Current
|
Deferred
|
|||||||||||||
Tax expense before application of operating loss carryforwards
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$ | 565,000 | $ | - | $ | 459,000 | $ | - | ||||||||
Tax expense (benefit) of operating loss carryforwards
|
- | - | (392,000 | ) | 392,000 | |||||||||||
Income tax expense
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$ | 565,000 | $ | - | $ | 67,000 | $ | 392,000 |
Six Months Ended June 30,
|
||||||||||||||||
2011
|
2010
|
|||||||||||||||
Current
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Deferred
|
Current
|
Deferred
|
|||||||||||||
Tax expense before application of operating loss carryforwards
|
$ | 984,000 | $ | - | $ | 734,000 | $ | - | ||||||||
Tax expense (benefit) of operating loss carryforwards
|
- | - | (627,000 | ) | 627,000 | |||||||||||
Income tax expense
|
$ | 984,000 | $ | - | $ | 107,000 | $ | 627,000 |
Three months ended June 30, 2011
|
Three months ended June 30, 2010
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|||||||||||||||||||||||
Transportation
Services
|
Agent
Support
Services
|
Total
|
Transportation
Services
|
Agent
Support
Services
|
Total
|
|||||||||||||||||||
Gross revenues
|
$ | 86,438,000 | $ | 527,000 | $ | 86,965,000 | $ | 69,070,000 | $ | 491,000 | $ | 69,561,000 | ||||||||||||
Purchased transportation
|
71,001,000 | - | 71,001,000 | 56,503,000 | - | 56,503,000 | ||||||||||||||||||
Commissions
|
11,711,000 | - | 11,711,000 | 9,662,000 | - | 9,662,000 | ||||||||||||||||||
Operating expenses
|
2,595,000 | 66,000 | 2,661,000 | 1,943,000 | 73,000 | 2,016,000 | ||||||||||||||||||
Income from operations
|
1,131,000 | 461,000 | 1,592,000 | 962,000 | 418,000 | 1,380,000 | ||||||||||||||||||
Interest expense
|
122,000 | 122,000 | 193,000 | - | 193,000 | |||||||||||||||||||
Income taxes
|
388,000 | 177,000 | 565,000 | 297,000 | 162,000 | 459,000 | ||||||||||||||||||
Net income
|
$ | 621,000 | $ | 284,000 | $ | 905,000 | $ | 472,000 | $ | 256,000 | $ | 728,000 |
Six months ended June 30, 2011
|
Six months ended June 30, 2010
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|||||||||||||||||||||||
Transportation
Services
|
Agent
Support
Services
|
Total
|
Transportation
Services
|
Agent
Support
Services
|
Total
|
|||||||||||||||||||
Gross revenues
|
$ | 161,381,000 | $ | 1,063,000 | $ | 162,444,000 | $ | 125,500,000 | $ | 976,000 | $ | 126,476,000 | ||||||||||||
Purchased transportation
|
132,788,000 | - | 132,788,000 | 102,526,000 | - | 102,526,000 | ||||||||||||||||||
Commissions
|
21,788,000 | - | 21,788,000 | 17,715,000 | - | 17,715,000 | ||||||||||||||||||
Operating expenses
|
4,905,000 | 131,000 | 5,036,000 | 3,855,000 | 139,000 | 3,994,000 | ||||||||||||||||||
Income from operations
|
1,900,000 | 932,000 | 2,832,000 | 1,404,000 | 837,000 | 2,241,000 | ||||||||||||||||||
Interest expense
|
283,000 | - | 283,000 | 354,000 | - | 354,000 | ||||||||||||||||||
Income taxes
|
624,000 | 360,000 | 984,000 | 408,000 | 326,000 | 734,000 | ||||||||||||||||||
Net income
|
$ | 993,000 | $ | 572,000 | $ | 1,565,000 | $ | 642,000 | $ | 511,000 | $ | 1,153,000 | ||||||||||||
Assets
|
$ | 52,719,000 | $ | 15,292,000 | $ | 68,011,000 | $ | 46,381,000 | $ | 15,278,000 | $ | 61,659,000 |
Balance
|
Weighted
Average Rate
|
Balance
|
Weighted
Average
Rate
|
|||||||||||||
2011
|
2010
|
|||||||||||||||
Line of Credit
|
19,028,000 | 2.21 | % | 22,008,000 | 3.25 | % |
(a)
|
Evaluation of Disclosure Controls and Procedures
|
(b)
|
Changes in Internal Control over Financial Reporting
|
Item 6.
|
EXHIBITS
|
|
Exhibit No.
|
Description
|
|
10.1
|
Asset Purchase Agreement dated July 8, 2011 (1)
|
|
31A
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Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
31B
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Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
32A
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Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
32B
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
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AUTOINFO, INC.
|
||
/s/ Harry Wachtel
|
||
Harry Wachtel
|
||
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
/s/ William Wunderlich
|
||
William Wunderlich
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of AutoInfo, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Harry Wachtel
|
||
Harry Wachtel
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of AutoInfo, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ William Wunderlich
|
||
William Wunderlich
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
/s/ Harry Wachtel
|
Harry Wachtel
|
Chief Executive Officer
|
(Principal Executive Officer)
|
/s/ William Wunderlich
|
William Wunderlich
|
Chief Financial Officer
|
(Principal Financial Officer)
|
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Accounts receivable, allowance for doubtful accounts | $ 841,000 | $ 392,000 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, issued | 34,043,000 | 33,513,000 |
Common stock, outstanding | 34,043,000 | 33,513,000 |
CONSOLIDATED STATEMENTS OF INCOME (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Gross revenues | Â | Â | Â | Â |
Revenues | $ 86,965,000 | $ 69,561,000 | $ 162,444,000 | $ 126,476,000 |
Purchased transportation | 71,001,000 | 56,503,000 | 132,788,000 | 102,526,000 |
Commissions | 11,711,000 | 9,662,000 | 21,788,000 | 17,715,000 |
Operating expenses | 2,661,000 | 2,016,000 | 5,036,000 | 3,994,000 |
Costs and Expenses, Total | 85,373,000 | 68,181,000 | 159,612,000 | 124,235,000 |
Income from operations | 1,592,000 | 1,380,000 | 2,832,000 | 2,241,000 |
Interest expense | 122,000 | 193,000 | 283,000 | 354,000 |
Income before income taxes | 1,470,000 | 1,187,000 | 2,549,000 | 1,887,000 |
Income taxes (Note 2) | 565,000 | 459,000 | 984,000 | 734,000 |
Net income | 905,000 | 728,000 | 1,565,000 | 1,153,000 |
Net income per share: | Â | Â | Â | Â |
Basic | $ 0.03 | $ 0.02 | $ 0.05 | $ 0.03 |
Diluted | $ 0.03 | $ 0.02 | $ 0.04 | $ 0.03 |
Weighted average number of common shares: | Â | Â | Â | Â |
Basic | 33,916,000 | 33,496,000 | 33,760,000 | 33,496,000 |
Diluted | 35,515,000 | 34,711,000 | 35,415,000 | 34,548,000 |
Transportation services
|
 |  |  |  |
Gross revenues | Â | Â | Â | Â |
Revenues | 86,438,000 | 69,070,000 | 161,381,000 | 125,500,000 |
Agent support services
|
 |  |  |  |
Gross revenues | Â | Â | Â | Â |
Revenues | $ 527,000 | $ 491,000 | $ 1,063,000 | $ 976,000 |
Document and Entity Information
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Aug. 04, 2011
|
|
Document Information [Line Items] | Â | Â |
Document Type | 10-Q | Â |
Amendment Flag | false | Â |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Year Focus | 2011 | Â |
Document Fiscal Period Focus | Q2 | Â |
Trading Symbol | AUTO | Â |
Entity Registrant Name | AUTOINFO INC | Â |
Entity Central Index Key | 0000351017 | Â |
Current Fiscal Year End Date | --12-31 | Â |
Entity Filer Category | Smaller Reporting Company | Â |
Entity Common Stock, Shares Outstanding | Â | 34,042,728 |
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Segment Reporting
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Jun. 30, 2011
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Segment Reporting |
Note 3 - Segment Reporting
The
Company operates in two business segments, non-asset based
transportation services and agent support services. The non-asset
based transportation services segment includes the Company’s
brokerage and contract carrier services which are provided through
a network of independent sales agents throughout the United States
and Canada. Revenue in this segment is generated from freight
transportation transactions. The agent support services
segment includes an array of services that the Company provides to
its agent network to support and encourage the expansion of
agents’ businesses, primarily financial support through
interest bearing long-term loans and non-interest bearing
short-term loans, as well as other services including training,
margin analysis, marketing assistance, industry and market segment
data, and business analysis tools. Revenue in this
segment consists primarily of interest on interest bearing loans.
This segment also includes potential revenues related to profit
participations and realization on options to acquire equity that
the Company may receive related to a loan or advance extended to an
agent.
Results
of operations by segment for the three and six months ended June
30, 2011 and 2010 as well as total assets as of June 30, 2011 and
2010, are summarized below:
|
Business and Summary of Significant Accounting Policies
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Business and Summary of Significant Accounting Policies |
Note 1. -
Business and Summary of Significant Accounting
Policies
Business
AutoInfo,
Inc., through its wholly-owned subsidiaries, Sunteck Transport
Group, Inc. and Eleets Logistics, Inc. (collectively, the
“Company,” “we,” “us,” or
“our”), operates in two business segments, non-asset
based transportation services and agent support services. The
non-asset based transportation services segment includes our
brokerage and contract carrier services which are provided through
a network of independent sales agents throughout the United States
and Canada. Revenue in this segment is generated from freight
transportation transactions. The agent support services
segment includes an array of services that we provide to our agent
network to support and encourage the expansion of our agents’
businesses, primarily financial support through interest bearing
long-term loans and non-interest bearing short-term loans, as well
as other services including training, margin analysis, marketing
assistance, industry and market segment data, and business analysis
tools. Revenue in this segment consists primarily of
interest on interest bearing loans made to agents. This segment
also includes potential revenues related to profit participations
and realization on options to acquire equity that the Company may
receive related to a loan or advance extended to an
agent.
As
a non-asset based provider of brokerage and contract carrier
transportation services, the Company does not own any equipment and
its services are provided through its strategic alliances with less
than truckload, truckload, air, rail, ocean common carriers and
independent owner-operators to service customers’ needs. The
Company’s brokerage and contract carrier services are
provided through a network of independent sales agents throughout
the United States and Canada. During its most recently completed
fiscal year, the Company generated revenue, income from operations
and net income of approximately $279.7 million, $5.7 million and
$3.1 million, respectively.
Summary
of Significant Accounting Policies
Basis of Presentation
The
financial statements of the Company have been prepared using the
accrual basis of accounting under accounting principles generally
accepted in the United States of America (GAAP).
The
consolidated financial statements, which are unaudited, have been
prepared pursuant to the rules and regulations of the SEC. In
management’s opinion, these financial statements include all
adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the results of operations for
the interim periods presented. The results of operations for the
three and six months ended June 30, 2011 and 2010 are not
necessarily indicative of results to be expected for the entire
year. Pursuant to SEC rules and regulations, certain
information and footnote disclosures normally included in financial
statements prepared in accordance with GAAP have been omitted from
these statements. The consolidated financial statements
and notes thereto should be read in conjunction with the financial
statements and notes included in our Annual Report on Form 10-K for
the year ended December 31, 2010.
Principles of Consolidation
The
consolidated financial statements include the accounts of the
AutoInfo, Inc., its wholly-owned subsidiaries, Sunteck Transport
Group, Inc. and Eleets Logistics, Inc. All significant
intercompany balances and transactions have been eliminated in
consolidation.
Use of Estimates
The
preparation of these financial statements in conformity with GAAP
requires management to make certain estimates and
assumptions. These estimates and assumptions affect the
reported amounts of assets, liabilities and contingent liabilities
at the date of the financial statements and the reported amounts of
revenue and expenses during the periods presented. The Company
believes that all such assumptions are reasonable and that all
estimates are adequate, however, actual results could differ from
those estimates.
Revenue Recognition
Gross
revenues from transportation services consist of the total dollar
value of services purchased by shippers. Revenue is
recognized upon delivery of freight, at which time the related
transportation cost, including commission, is also
recognized. At that time, the Company’s
obligations are completed and collection of receivables is
reasonably assured. Gross revenues and profits from agent support
services consist primarily of interest on interest bearing
loans.
Accounting
Standards Codification Topic 605-45 “Revenue Recognition
– Principal Agent Considerations” (ASC 605-45),
establishes criteria for recognizing revenues on a gross or net
basis. The Company is the primary obligor in its transactions, has
all credit risk, maintains substantially all risk and rewards, has
discretion in selecting the supplier, and has latitude in pricing
decisions. Accordingly, the Company records all
transactions at the gross amount, consistent with the provisions of
ASC 605-45.
Income
on all loans is recognized on the interest method. Accrual of
interest is suspended at the earlier of the time at which
collection becomes doubtful or the loan becomes
delinquent. Interest income on impaired loans is
recognized either as cash is collected or on a cost-recovery basis
as conditions warrant.
Cash and cash equivalents
Cash
and cash equivalents consist of cash in banks.
Provision For Doubtful Accounts
The
Company continuously monitors the creditworthiness of its customers
and has established an allowance for amounts that may become
uncollectible in the future based on current economic trends, its
historical payment and bad debt write-off experience, and any
specific customer related collection issues.
Fixed Assets
Fixed
assets as of June 30, 2011 and December 31, 2010, consisting
primarily of furniture, fixtures and equipment and computer system
development costs, were carried at cost net of accumulated
depreciation. Depreciation of fixed assets was provided on the
straight-line method over the estimated useful lives of the related
assets which range from three to five years.
Income Per Share
Basic
income per share is based on net income divided by the weighted
average number of common shares outstanding. Common
stock equivalents outstanding were 1,599,000 and 1,215,000, and
1,655,000 and 1,052,000, respectively, for the three and six month
periods ended June 30, 2011 and 2010, respectively.
Income Taxes
The
Company utilizes the asset and liability method for accounting for
income taxes. Under the asset and liability method,
deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment
date.
Segment Information
The
Company operates in two business segments, non-asset based
transportation services and agent support services. The non-asset
based transportation services segment includes our brokerage and
contract carrier services which are provided through a network of
independent sales agents throughout the United States and Canada.
Revenue in this segment is generated from freight transportation
transactions. The agent support services segment includes an
array of services that we provide to our agent network to support
and encourage the expansion of our agents’ businesses,
primarily financial support through interest bearing long-term
loans and non-interest bearing short-term loans, as well as other
services including training, margin analysis, marketing assistance,
industry and market segment data, and business analysis
tools. Revenue in this segment consists primarily of
interest on interest bearing loans. This segment also includes
potential revenues related to profit participations and realization
on options to acquire equity that the Company may receive related
to a loan or advance extended to an agent.
|
Subsequent Event
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Subsequent Event |
Note 4 -
Subsequent Event
On
July 8, 2011 the Company acquired substantially all of the
operating assets of the truck agent business division from a
significant agent. Under the terms of the Acquisition
Agreement, as filed by the Company on Form 8-K on July 13, 2011,
the Company acquired from the agent all right, title and interest
in and to all of the assets and properties, tangible and
intangible, owned, held or used in connection with the truck agent
business division. The purchase price for the acquired
assets totaled approximately $10 million and principally consisted
of an unconditional release and discharge of the agent from
approximately $9.4 million of indebtedness due to the Company and
its affiliated entities plus the assumption of certain
liabilities.
Prior
to the acquisition, and since 2007, this agent was a significant
independent agent of the Company to which the Company provided
agent support services, including loans and
advances. The Company received interest on the loans and
advances extended to the agent at rates ranging from 8% to 20% and
was entitled to receive a fee equal to 25% of the agent’s
pre-tax income, if any. However, no pre-tax income was generated
during the periods preceding June 30, 2011. Pursuant to
the Acquisition Agreement, all previous contractual arrangements
between the Company and its affiliated entities and the agent were
terminated. The Company will continue to provide the
agent with certain support services for its asset based trucking
business and brokerage business through December 31,
2011.
|
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Income Taxes
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Income Taxes |
Note 2- Income Taxes
For
the three and six month periods ended June 30, 2011 and 2010,
respectively, the provision for income taxes consisted of the
following:
|