-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J03wR8HIBkPa+LUvj9oaorPLiW+Pjz1Zj6i9csTVBvJPBLUPlJjhNQSIW9TSNhC0 UWlwlYPlaJB5EoO2BbKKfQ== 0000719271-96-000016.txt : 19960928 0000719271-96-000016.hdr.sgml : 19960928 ACCESSION NUMBER: 0000719271-96-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 DATE AS OF CHANGE: 19960821 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANUHCO INC CENTRAL INDEX KEY: 0000719271 STANDARD INDUSTRIAL CLASSIFICATION: 4213 IRS NUMBER: 460278762 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12070 FILM NUMBER: 96615991 BUSINESS ADDRESS: STREET 1: 8245 NIEMAN ROAD, STE 100 STREET 2: SUITE 100 CITY: LENEXA STATE: KS ZIP: 66214 BUSINESS PHONE: (913) 859-0055 X 262 MAIL ADDRESS: STREET 1: 8245 NIEMAN ROAD STREET 2: SUITE 100 CITY: LENEXA STATE: KS ZIP: 66214 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN CARRIERS INC DATE OF NAME CHANGE: 19910812 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 0-12321 ANUHCO, INC. (Exact name of Registrant as specified in its charter) Delaware 46-0278762 (State or other jurisdiction of (I.R.S.Employer incorporation or organization) Identification No.) 8245 Nieman Road, Suite 100 Lenexa, Kansas 66214 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (913) 859-0055 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ( X ) No ( ) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at August 9, 1996 Common stock, $0.01 par value 6,631,393 Shares Part I. FINANCIAL INFORMATION Item 1. Financial Statements ANUHCO, INC. AND SUBSIDIARIES For the Three Months Ended June 30, Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited)
1996 1995 Operating Revenues $28,345 $24,569 Operating Expenses 27,919 24,086 Operating Income 426 483 Nonoperating Income (Expense) Interest Income 217 546 Interest Expense (14) (63) Gain on sale of property and equipment, net 6 22 Other, net -- -- Total nonoperating income (expense) 209 505 Income from Continuing Operations before Income Taxes 635 988 Income Tax Provision 273 425 Income from Continuing Operations 362 563 Income from Discontinued Operations (Note 6) -- 27 Net Income $ 362 $ 790 Average Common Shares Outstanding (Note 5) 6,892 7,555 Net Income Per Share from Continuing Operations $0.05 $0.07 Net Income Per Share from Discontinued Operations $0.00 $0.03 Net Income Per Share $0.05 $0.10 The accompanying notes to consolidated financial statements are an integral part of these statements.
ANUHCO, INC. AND SUBSIDIARIES Consolidated Statements of Income For the Six Months Ended June 30, (In thousands, except per share amounts) (Unaudited)
1996 1995 Operating Revenues $ 53,561 $49,200 Operating Expenses 52,941 47,748 Operating Income 620 1,452 Nonoperating Income (Expense) Interest Income 608 1,158 Interest Expense (17) (66) Gain on sale of property and equipment, net 41 42 Other, net 2 1 Total nonoperating income (expense) 634 1,135 Income from Continuing Operations before Income Taxes 1,254 2,587 Income Tax Provision 539 1,113 Income from Continuing Operations 715 1,474 Income from Discontinued Operations (Note 6) -- 595 Net Income $ 715 $2,069 Average Common Shares Outstanding (Note 5) 7,014 7,554 Net Income Per Share from Continuing Operations $0.10 $0.19 Net Income Per Share from Discontinued Operations $0.00 $0.08 Net Income Per Share $0.10 $0.27 The accompanying notes to consolidated financial statements are an integral part of these statements.
ANUHCO, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share amounts)
June 30,1996 Dec.31,1995 (Unaudited) Assets Current Assets: Cash and temporary cash investments $ 6,073 $6,617 Short term investments (Note 6) 10,583 27,366 Freight accounts receivable, less allowance for doubtful accounts of $435 and $409, respectively 9,594 7,952 Finance accounts receivable, less allowance for doubtful accounts of $663 and $351, respectively 38,565 8,290 Current deferred tax asset 346 177 Other current assets 2,065 1,291 AFS net assets (Note 6) 16,490 16,840 Total current assets 83,716 68,533 Operating Property, at Cost Revenue equipment 20,731 18,944 Land 3,099 2,826 Structures and improvements 8,869 7,534 Other operating property 4,934 4,643 37,633 33,947 Less accumulated depreciation (18,696) (17,724) Net operating property 18,937 16,223 Intangibles and Other Assets (Note 2) 10,004 3,670 $112,657 $ 88,426 Liabilities and Shareholders' Equity Current Liabilities: Secured notes payable (Note 4) $24,297 $ -- Accounts payable 3,706 1,041 Accrued payroll and fringes 5,856 5,203 Claims and insurance accruals 277 224 Accrued and current deferred income taxes 293 288 Other accrued expenses 932 847 Total current liabilities 35,361 7,603 Deferred Income Taxes 624 543 Shareholders' Equity (Note 5) Preferred stock with $0.01 par value, authorized 1,000,000 shares, none outstanding -- -- Common stock with $0.01 par value, authorized 13,000,000 shares, out- standing 6,645,693 and 7,139,970 shares, respectively 76 76 Paid-in capital 5,470 5,357 Retained earnings 79,105 78,390 Treasury stock, 943,877 and 417,100 shares, respectively, at cost (7,979) (3,543) Total shareholders' equity 76,672 80,280 $112,657 $88,426 The accompanying notes to consolidated financial statements are an integral part of this statement.
ANUHCO, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows For the Six Months Ended June 30, (In thousands) (Unaudited)
1996 1995 Cash Flows From Operating Activities Net Income $ 715 $ 2,069 Adjustments to reconcile net income cash provided by operating activities Gain on sale of assets (41) (42) Depreciation and amortization 1,678 1,335 Provision for uncollectible accounts 364 109 Deferred tax provision 136 -- Net increase (decrease) from change in other working capital items affecting operating activities (247) (831) Income from discontinued operations -- (595) 2,605 2,045 Cash Flows from Investing Activities Purchase of finance subsidiary (Note 2) (11,979) (11,216) Purchase of operating property (3,998) (3,772) Origination of finance accounts receivables (53,556) (5,510) Sale of finance accounts receivables 20,885 4,205 Collection of owned finance accounts receivables 32,444 2,481 Collection of long-term receivable -- 1,270 Purchases of short-term investments (10,515) (25,747) Maturities of short-term investments 27,298 28,588 579 (9,701) Cash Flows from Financing Activities Payments to acquire treasury stock (4,385) -- Borrowings on credit agreements, net 522 -- Other 135 15 (3,728) 15 Net Increase (Decrease) in Cash and Temporary Cash Investments (544) (7,641) Cash and Temporary Cash Investments at beginning of period 6,617 11,365 Cash and Temporary Cash Investments at end of period $6,073 $3,742 Cash Paid During the Period for Interest $ 534 -- Income Tax -- $ 353 The accompanying notes to consolidated financial statements are an integral part of these statements.
ANUHCO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (In Thousands)
Total Share Common Paid-In Retained Treasury holders' Stock Capital Earnings Stock Equity Balance at December 31, 1994 $ 76 $5,339 $72,004 $ -- $77,419 Income from continuing operations -- -- 2,810 -- 2,810 Income from discontinued operations -- -- 3,576 -- 3,576 Issuanace of shares under Incentive Stock Plan -- 18 -- -- 18 Purchase of 417,100 shares of common stock -- -- -- (3,543) (3,543) Balance at December 31, 1995 76 5,357 78,390 (3,543) 80,280 Income from continuing operations -- 715 -- 715 Income from discountinued operations -- -- -- -- -- Issuance of shares under Incentive Stock Plan -- 113 -- (51) 62 Purchase of 521,300 shares of common stock -- -- -- (4,385) (4,385) Balance at June 30, 1996 (unaudited) $ 76 $5,470 $79,105 $(7,979) $ 76,672 The accompanying notes to consolidated financial statements are an integral part of these statements.
ANUHCO, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Principles of Consolidation The consolidated financial statements include Anuhco and all of its subsidiary companies ("the Company"). All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and have not been examined or reviewed by independent public accountants. In the opinion of management, all adjustments necessary to present fairly the results of operations have been made. Pursuant to SEC rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from these statements unless significant changes have taken place since the end of the most recent fiscal year. Anuhco believes that the disclosures contained herein, when read in conjunction with the financial statements and notes included, or incorporated by reference, in Anuhco's Form 10-K, filed with the SEC on March 11, 1996, are adequate to make the information presented not misleading. It is suggested, therefore, that these statements be read in conjunction with the statements and notes included, or incorporated by reference, in the aforementioned report on Form 10-K. 2. Acquisition of Premium Finance Subsidiaries On May 31, 1995, Anuhco completed the acquisition of all of the issued and outstanding stock of Agency Premium Resource, Inc. and subsidiary ("APR"). The purchase price, together with payments for certain services to be rendered by the sellers after closing, was approximately $11.3 million. In addition to the Stock Purchase Agreement by which Anuhco acquired all of the APR stock, Anuhco entered into a consulting agreement with the former shareholder of APR, and an employment agreement with APR's president and chief executive officer. Under the former, Anuhco is entitled to consult with the former majority shareholder regarding APR for three years. Under the latter, APR is entitled to the continuation of the services of the president and chief executive officer for five years. This transaction was accounted for as a purchase. Anuhco utilized a portion of its available cash and investments to consummate the purchase. The terms of the acquisition and the purchase price resulted from negotiations between Anuhco and the APR shareholders. APR offers insurance premium financing and related services through approved insurance agencies, primarily throughout the midwestern United States. Its wholly owned subsidiary, Agency Services, Inc., provides motor vehicle report services throughout the same geographic area. In connection with the purchase of APR, Anuhco recorded goodwill of $2.4 million, which will be amortized on the straight- line basis over 15 years, and a software and service agreement of $1.0 million, which will be amortized over 5 years. On March 29, 1996, Anuhco completed the acquisition of all of the issued and outstanding stock of Universal Premium Acceptance Corporation and UPAC of California, Inc. (together referred to as "UPAC"). UPAC offers short-term collateralized financing of commercial and personal insurance premiums through approved insurance agencies in over 30 states throughout the United States. At March 31, 1996, UPAC had outstanding net finance receivables of approximately $30 million. This transaction was accounted for as a purchase. Anuhco utilized a portion of its available cash and short-term investments to consummate the purchase at a price of approximately $12 million. The terms of the acquisition and the purchase price resulted from negotiations between Anuhco and William H. Kopman, the former sole shareholder of UPAC. In connection with the purchase of UPAC, based on a preliminary allocation of the purchase price, Anuhco has recorded goodwill of $6.3 million, which will be amortized on the straight- line basis over 25 years. In addition to the Stock Purchase Agreement by which Anuhco acquired all of the UPAC stock, Anuhco entered into a consulting agreement with Mr. Kopman. Under the consulting agreement, Anuhco is entitled to consult with Mr. Kopman on industry developments as well as UPAC operations through December 31, 1998. In addition to retaining the services of Mr. Kopman under a consulting agreement, existing executive management personnel of UPAC have been retained under multiyear employment agreements. Anuhco's acquisition of UPAC, in combination with its earlier acquisition, gives the Company a nationwide presence in this financial services industry. The following reflects the operating results of Anuhco for the second quarter ended June 30, 1995 and the six months ended June 30, 1996 and 1995, assuming the acquisitions occurred as of the beginning of each of the respective periods: Pro Forma Operating Results (Unaudited) (In thousands, except per share data)
Second Quarter Six Months 1995 1996 1995 Operating Revenues $26,636 $54,794 $53,181 Income from Continuing Operations 675 700 1,613 Income from Discontinued Operations 227 -- 595 Net Income $ 902 $ 700 $ 2.208 Net Income Per Share: Continuing operations $ 0.09 $0.10 $ 0.21 Discontinued Operations 0.03 0.00 0.08 Total $ 0.12 $0.10 $ 0.29
The pro forma results of operations are not necessarily indicative of the actual results that would have been obtained had the acquisitions been made at the beginning of the respective periods, or of results which may occur in the future. 3. Profit Sharing In September 1988, the employees of Crouse Cartage Company ("Crouse Cartage"); a wholly owned subsidiary of Anuhco, approved the establishment of a profit sharing plan ("the Plan"). The Plan is structured to allow all employees (union and non-union) to ratably share 50% of Crouse Cartage's income before income taxes (excluding extraordinary items and gains or losses on the sale of assets) in return for a 15% reduction in their wages. Plan distributions are made on a quarterly basis. The Plan was recertified in 1991 and 1994, and shall continue in effect through March 31, 1998, or until a replacement of the Collective Bargaining Agreement is reached between the parties, whichever is the later. The accompanying consolidated balance sheet as of June 30, 1996 includes an accrual for profit sharing costs of $724,000. The accompanying consolidated statements of income includes profit sharing costs of $724,000 and 1,022,000 for the second quarter of 1996 and 1995, respectively, and 1,189,000 and 2,187,000 for the first six months of 1996 and 1995, respectively. 4. Financing Agreements In October, 1995, the Company, APR, and APR Funding Corporation, a wholly owned subsidiary of APR, entered into an extendible three year securitization agreement whereby undivided interests in a designated pool of finance accounts receivable can be sold on an ongoing basis. The maximum allowable amount of receivables to be sold under the agreement is $30,000,000. This agreement replaced a similar agreement with another financial institution that was entered into in July, 1993. The purchaser permits principal collections to be reinvested in new financing agreements. APR had securitized receivables of $17.2 million at June 30, 1996. The cash flows from the sale of receivables are reported as investing activities in the accompanying consolidated statement of cash flows. The securitized receivables are reflected as sold in the accompanying balance sheet. The proceeds from the initial securitization of the receivables were used to pay off the previous securitized receivables under the prior agreement. APR did not record a gain or loss on the sales as the costs of receivables sold approximated the proceeds. The terms of the securitization agreement require that APR maintain a default reserve at specified levels which serves as collateral. At June 30, 1996, approximately $2.1 million of owned finance receivables served as collateral under the default reserve provision. APR continues to service the securitized receivables for which it receives a servicing fee. As of June 30, 1996, UPAC had outstanding secured notes payable of $22.7 million under a restated secured credit agreement with three banks dated as of July 29, 1994, as amended on August 14, 1995 and April 3, 1996. The restated secured credit agreement is secured by UPAC receivables, and provides an aggregate maximum principal amount outstanding not to exceed the lesser of $30,000,000 or 85% of the qualified notes assigned to the banks and the sum of the outstanding principal of and the accrued interest on, the additional obligations to insurance agents with whom UPAC does business evidenced by promissory notes. This credit agreement, as amended, is scheduled to expire in the fourth quarter of 1996. Borrowings under the credit agreement not subject to the LIBOR (London Inter Bank EuroDollar Market) Pricing Option, $1.7 million at June 30, 1996, are at the bank's prime rate, which was 8.25% at June 30, 1996. Borrowings under the LIBOR Pricing Option, $21 million at June 30, 1996, are at the LIBOR rate plus 2.00% for each applicable interest period, an average effective rate of 7.45% at June 30, 1996. The acquisition of UPAC by Anuhco resulted in certain technical events of default of the secured credit agreement which were waived by the lender. UPAC's domestic banking system provides for the daily replenishment of major bank accounts for check clearing requirements. Accordingly, outstanding checks of $1,639,000 at June 30, 1996 are also included in secured notes payable. In September 1988, Crouse Cartage entered into a multi-year credit agreement with a commercial bank which provided for maximum borrowings equaling the lesser of $2,500,000 or the borrowing base, as defined in such agreement. In September, 1995 the term of this agreement was extended to June 30, 1997. There was no outstanding balance on this revolving line of credit at June 30, 1996. 5. Shareholders' Equity Income per share is based on the average number of common shares outstanding during each period. The average number of common shares so computed was 6,891,740 and 7,013,878 for the quarter and six months ended June 30, 1996, and 7,555,234 and 7,554,424 for the quarter and six months ended June 30, 1995, respectively. On June 26, 1995, the Company adopted a program to repurchase up to 10% of its outstanding shares of common stock. During the second quarter of 1996, the Company completed this initial repurchase program and expanded the number of shares authorized to be repurchased by an additional 10% of its then outstanding shares. During the second quarter and first six months of 1996, the Company repurchased an additional 502,600 shares and 521,300 shares of common stock, respectively, bringing the total shares repurchased to 938,400 shares, or 12.4% of outstanding shares before initiating the program, at a total cost of $7,928,000. 6. AFS Net Assets Under the provisions of a Joint Plan of Reorganization ("the Joint Plan"), AFS is responsible for the administration of pre- July 12, 1991 creditor claims and conversion of assets owned before that date. As claims are allowed and cash is available, distributions to the creditors occur. The Joint Plan also provided for distributions to Anuhco as unsecured creditor distributions occurred in excess of 50% of allowed claims. Anuhco also will receive the full benefit of any remaining assets of AFS through its ownership of AFS stock, after unsecured creditors received distributions, including interest, equivalent to 130% of their claims. AFS has made the full payment of all it's resolved claims and liabilities. The remaining AFS net assets are estimated to have net realizable value of $16.5 million. The primary assets include approximately $14.4 million in cash and investments. Gross unresolved claims, primarily related to workers' compensation indemnification issues, are approximately $4 million. In July 1996, AFS paid a dividend of $8.5 million to Anuhco. This dividend was paid from the excess cash and investments of AFS and did not result in the recognition of additional income from discontinued operations. AFS is in the process of resolving these claims, however until this process is completed the amount of liabilities cannot be ascertained. The ultimate resolution of the amounts, validity and priority of recorded liabilities and other claims is uncertain at this time. Accordingly, AFS net assets reflect estimated amounts due on such liabilities and claims. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Second quarter and six months ended June 30, 1996 compared to the second quarter and six months ended June 30, 1995 With the acquisition of APR on May 31, 1995, and UPAC on March 29, 1996 Anuhco now operates in two distinct industries; transportation, through its subsidiary, Crouse Cartage; and financial services, through its subsidiaries, APR and UPAC. Transportation Operating Revenue - The changes in transportation operating revenue are summarized in the following table (in thousands):
Qtr. 2 1996 Six Months 1996 vs. vs. Qtr. 2 1995 Six Months 1995 Increase (decrease) from: Increase in LTL tonnage $3,357 $3,872 Decrease in LTL revenue per hundredweight (1,154) (1,826) Decrease in truckload revenues (220) (407) Net increase (decrease) $1,983 $1,639
Less-than-truckload ("LTL") operating revenues rose by 11.7% and 5.3% in the second quarter and first six months of 1996, respectively, as compared to the same periods in 1995. In spite of severe winter weather in the first quarter of 1996 which management estimates caused a loss of three revenue days in the quarter, Crouse achieved 17.8% and 10.1% increases in LTL tons for the second quarter and first half of 1996, respectively, over the corresponding periods of 1995. The trucking industry, including Crouse Cartage, continues to be adversely impacted by the competitive market pressures on freight rates during the current periods, which reduced Crouse Cartage's LTL revenue yield by approximately 6.1% and 4.8% for the quarter and six months, respectively. Truckload operating revenues were 4.1% and 3.9% lower in the second quarter and six months as the net result of 5.0% and 5.7% declines in the number of shipments hauled and 0.9% and 1.8% increases in revenue per shipment. Operating Expense - A comparative summary of transportation operating expenses as a percent of transportation operating revenue follows:
Percent of Operating Revenue Second Quarter Six Months 1996 1995 1996 1995 Salaries, wages and employee benefits 55.7% 55.4% 55.7% 55.6% Operating supplies and expenses 12.9% 11.5% 13.1% 11.1% Operating taxes and licenses 2.7% 2.7% 2.9% 2.7% Insurance and claims 2.1% 2.3% 2.0% 2.2% Depreciation 2.6% 2.3% 2.6% 2.4% Purchased transportation 21.2% 21.3% 21.3% 21.7% Total operating expenses 97.2% 95.5% 97.6% 95.7%
Crouse Cartage's operating expenses as a percentage of operating revenue, or operating ratio, rose from 95.5% to 97.2% for the second quarter and from 95.7% to 97.6% for the first six months of 1995 as compared to 1996. These increases in Crouse's operating ratio were primarily the result of increased linehaul, fuel and maintenance costs caused by the severe winter storms which occurred in Crouse's operating territory in the first quarter and the reduction in operating revenue per ton. Additionally, in the second quarter of 1996 fuel costs have remained at levels substantially above that experienced in 1995. In order to maintain its strong relationships with its key customers the Company has not passed these higher fuel costs on to its customers through fuel surcharges. Management expects the difficult economic operating environment in the transportation industry and the pressure on freight rates to continue in the short term.* In addition, a 3.7% contractual increase in union salaries and benefits went into effect on April 1, 1996. *This is a forward-looking statement which involves risks and uncertainties that are detailed under caption "Forward- Looking Statements". Financial Services In the second quarter and first six months of 1996, APR and UPAC (since March 29, 1996) financed $36.3 million and $50.5 million in insurance premiums at an average annual yield of $14.6% and 14.2%, respectively. These operations generated operating income of $108,000 on net finance charges and fees earned of $2.1 million for the second quarter of 1996, and operating income of $128,000 on net finance charges and fees earned of $3.0 million for the first six months of 1996, after certain costs incurred on the acquisition and integration of UPAC. Other Primarily as a result of its utilization of cash and short-term investments for the acquisitions of APR and UPAC since the first quarter of 1995, Anuhco recorded a substantial decrease in interest income for the second quarter and six months ended June 30, 1996, from the corresponding periods of 1995. Anuhco's effective tax rate for the second quarter and six months of 1996 and 1995 was 43%. During the second quarter and six months of 1995, the Company recognized income from discontinued operations relating to additional deferred tax benefits. Outlook The following statements are forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as such involve risks and uncertainties which are detailed below under the caption "Forward-Looking Statements". The Company is currently developing a three-year strategic plan with the goal of growing each of its business segments to be equal contributors to the Company's earnings per share. In the transportation segment the plan calls for the Company to continue to provide and improve upon its already superior service to its customers in its primary operating territory, while extending its operations throughout the Midwest. As the Company makes the strategic investments necessary to support this expansion, the Company intends to continue to improve the efficiency and effectiveness of its existing base of operations. The first step for the financial services segment is the successful integration of the operations of APR and UPAC. The continued growth of this operation will involve the expansion of its licensing and qualifications to include all 50 states. The financial services segment will also focus on increasing its market penetration in certain states with substantial population and industrial base. In addition to the expansion of its existing operations in each of its business segments, the Company continues to consider potential acquisitions which would complement these operations. Forward-Looking Statements Certain statements contained in this Quarterly Report on Form 10-Q which are not statements of historical fact constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, the statements specifically identified as forward-looking statements in this Form 10-Q. In addition, certain statements in future filings by the Company with the Securities and Exchange Commission, in the Company's press releases, and in oral statements made by or with the approval of an authorized executive officer of the Company which are not statements of historical fact constitute forward-looking statements within the meaning of the Act. Examples of forward- looking statements include, but are not limited to (i) projections of revenues, income or loss, earnings or loss per share, capital expenditures, the payment or non-payment of dividends, capital structure and other financial items, (ii) statements of plans and objectives of the Registrant or its management or Board of Directors, including plans or objectives relating to the products or services of the Registrant, (iii) statements of future economic performance, and (iv) statements of assumptions underlying the statements described in (i), (ii) and (iii). These forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from those in such statements. The following discussion identifies certain important factors that could affect the Company's actual results and actions and could cause such results or actions to differ materially from any forward-looking statements made by or on behalf of the Company that related to such results or actions. Other factors, which are not identified herein, could also have such an effect. Transportation Certain specific factors which may affect the Company's transportation operation include: increasing competition from other regional and national carriers for freight in the Company's primary operating territory; increasing price pressure; changes in fuel prices; labor matters; including changes in labor costs, and other labor contract issues; and, environmental matters. Financial Services Certain specific factors which may affect the Company's financial services operation include: the performance of financial markets and interest rates; the performance of the insurance industry; increasing competition from other premium finance companies and insurance carriers for finance business in the Company's key operating states; failure to achieve the Company's anticipated levels of expense savings from the integration of APR's and UPAC's administrative functions; difficulty in integrating the computer and operating systems; the loss of experienced, trained personnel during the transition period; the loss of customer identification with the Company as the businesses are combined; and, the inability to obtain continued financing at a competitive cost of funds. General Factors Certain general factors which could affect both the Company's transportation operation and the Company's financial services operation include: changes in general business and economic conditions; changes in governmental regulation, and; tax changes. Expansion of these businesses into new states or markets is substantially dependent on obtaining sufficient business volumes from existing and new customers in these new markets at compensatory rates. The cautionary statements made pursuant to Section 21E of the Securities Exchange Act of 1934, as amended, are made as of the date of this Report and are subject to change. The cautionary statements set forth in this Report are not intended to cover all of the factors that may affect the Company's businesses in the future. Forward-looking information disseminated publicly by the Company following the date of this Report may be subject to additional factors hereafter published by the Company. FINANCIAL CONDITION The Company's financial condition remained strong at June 30, 1996 with over $16 million in cash and investments at the Anuhco level, as well as approximately $14 million in cash and investments included in the net assets of AFS. In July 1996, AFS paid a dividend of $8.5 million to Anuhco from its excess cash and investments. During the first quarter of 1996 Anuhco completed the acquisition of UPAC using approximately $12 million in available funds. In addition, during the first six months of 1996, the Company has purchased $4.0 million of operating property and equipment, without incurring any long term indebtedness. On October 20, 1995 APR entered into a three year agreement with a receivable purchaser to sell an undivided interest in a designated pool of receivables. The maximum allowable receivables to be sold under this agreement is $30 million. Proceeds from the initial funding of this agreement were utilized to eliminate all outstanding balances under a prior agreement. As of June 30, 1996, APR had securitized receivables with an outstanding balance of $17.2 million. Anuhco serves as guarantor in certain limited circumstances under this agreement. UPAC finances its outstanding receivables under a secured credit agreement dated July 29, 1994, as amended on August 14, 1995 and April 3, 1996, which provides for maximum borrowings of the lesser of $30 million or 85% of qualified receivables. This agreement, as amended, is scheduled to expire in the fourth quarter of 1996. As of June 30, 1996, UPAC had outstanding secured notes payable under the credit agreement of $22.7 million. The Company is currently evaluating proposals to expand APR's receivables securitization agreement to include UPAC's receivables or to replace both financing arrangements within a combined receivables securitization agreement with UPAC's primary bank lender, under terms comparable to APR's securitization agreement. On June 26, 1995, the Company adopted a program to repurchase up to 10% of its outstanding shares of common stock. During the second quarter of 1996 the Company completed this program and expanded the program to include an additional 10% of its then outstanding shares. During the second quarter and six months of 1996, respectively, the Company repurchased an additional 502,600 and 521,300 shares of common stock bringing the total shares repurchased to 938,400, or 12.4% of outstanding shares before initiating the program, at a total cost of $7,928,000. This program is being funded from available cash and investments. PART II - OTHER INFORMATION Item 1. Legal Proceedings Reference is made to Item 3 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders (a) Annual Meeting of Shareholders was held on May 22, 1996. (b) The nominees for the board of directors previously reported to the Commission in the Company's Proxy Statement were re-elected. (c) The matters voted upon at the Annual Meeting were as follows: (1) All eight nominees for director were re-elected as follows:
Shares Voted Nominee For Withheld John P. Bigger 5,201,246 214,803 William D. Cox 5,277,746 138,303 Lawrence D. ("Larry") Crouse 5,292,546 123,503 Harold C. Hill, Jr. 5,292,771 123,278 Roy R. Laborde 5,292,546 123,503 Timothy P. O'Neil 5,276,746 139,303 Eleanor Brantley Schwartz 5,215,996 200,053 Walter P. Walker 5,215,546 200,503
(2) The selection of Coopers & Lybrand, L.L.P. as independent public accountants was ratified with 5,288,040 shares voting for, 90,440 shares voting against, and 37,569 shares abstaining. Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 19(a)* Report to Shareholders for the Second Quarter, 1996, dated August 12, 1996. 27 * Financial Data Schedule * Filed herewith. (b) Reports on Form 8-K None (SIGNATURE) Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Anuhco, Inc. Registrant By: /s/Timothy P. O'Neil Timothy P. O'Neil, President & Chief Financial Officer Date: August 14, 1996 EXHIBIT INDEX Assigned Exhibit Number Description of Exhibit 19(a) Report to Shareholders for the Second Quarter, 1996, dated August 12, 1996. 27 Financial Data Schedule. EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ANUHCO, INC. CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000719271 ANUHCO, INC. 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 6,073 10,583 49,257 1,098 0 83,716 37,633 18,696 112,657 35,361 0 76 0 0 76,596 112,657 0 53,561 0 52,941 0 0 17 1,254 539 715 0 0 0 715 .10 .10
EX-19 3 ANUHCO, INC. SECOND QUARTER 1996 REPORT TO SHAREHOLDERS Anuhco's second quarter 1996 results reflect the continued competitive pricing market in the transportation industry and the high level of fuel costs experienced so far this year. Consolidated income from continuing operations for the second quarter of 1996 was $362,000, or $0.05 per share, on operating revenue of $28.3 million; compared to $563,000, or $0.07 per share on operating revenue of $24.6 million during the same quarter of 1995. The second quarter 1995 results also included additional income from discontinued operations of $227,000, or $0.03 per share. While second quarter operating results for Crouse Cartage Company, Anuhco's general commodities motor carrier, were down compared to 1995, less-than-truckload ("LTL") tonnage showed a 17.8% improvement. Second quarter operating income was $737,000 on revenue of $26.2 million versus $1,041,000 on revenue of $24.2 million during 1996 and 1995, respectively. Pressure on freight rates resulting from industry over-capacity pushed Crouse Cartage's revenue per hundredweight down 6.1% compared to the same quarter of 1995, while continued high fuel costs contributed to an increase in operating expense. Agency Premium Resource, Inc. ("APR") and Universal Premium Acceptance Corporation ("UPAC"), Anuhco's insurance premium finance subsidiaries, generated operating income of $108,000 on net finance charges and fees earned of $2.1 million for the second quarter of 1996, after certain costs incurred on the acquisition and integration of UPAC. The back office operations of APR and UPAC are expected to be fully integrated by yearend. While some additional costs will be incurred in this process over the second half of 1996, the fully integrated operations of APR and UPAC will provide a nationwide presence and opportunity for further expansion in this market. Anuhco completed a program to repurchase up to 10% of its outstanding shares, 755,700 shares, in May and immediately expanded this program to include an additional 10% of its then outstanding shares, 681,300 shares. Through June 30, 1996, Anuhco has repurchased 938,400 shares, or 12.4% of its common stock outstanding at the inception of the program. Anuhco continues to maintain a strong cash and investment position of approximately $16.7 million as of June 30, 1996. In July 1996, AFS, Anuhco's discontinued operation, paid a dividend of $8.5 million to Anuhco from its excess cash and investments. After the dividend, AFS had remaining net assets of approximately $8 million, $6 million of which is in cash and investments. Timothy P. O'Neil, Roy R. Laborde, President Chairman August 12, 1996 ANUHCO, INC. UNAUDITED SUMMARY FINANCIAL STATEMENTS (in thousands, except per share data) CONSOLIDATED STATEMENTS OF INCOME Second Quarter and Six Months Ended June 30, 1996 and 1995
Second Quarter Six Months 1996 1995 1996 1995 Operating Revenues $28,345 $24,569 $53,561 $49,200 Operating Expenses 27,919 24,086 52,941 47,748 Operating Income 426 483 620 1,452 Non-Operating Income 209 505 634 1,135 Income From Continuing Operations Before Income Taxes 635 988 1,254 2,587 Income Tax Provision 273 425 539 1,113 Income From Continuing Operations 362 563 715 1,474 Income From Discontinued Operations -- 227 -- 595 Net Income $ 362 $ 790 $ 715 $ 2,069 Income Per Share - Continuing Operations $ 0.05 $ 0.07 $ 0.10 $ 0.19 Discontinued Operations 0.00 0.03 0.00 0.08 Total $ 0.05 $ 0.10 $ 0.10 $ 0.27 Average Common Shares Outstanding 6,892 7,555 7,014 7,554
CONSOLIDATED BALANCE SHEETS
06/30/96 12/31/95 ASSETS Cash and Short-Term Investments $ 16,656 $33,983 Finance Accounts Receivable, net 38,565 8,290 Other Current Assets 28,495 26,260 Total Current Assets 83,716 68,533 Operating Property, net 18,937 16,223 Intangible and Other Assets 10,004 3,670 $112,657 $88,426 LIABILITIES AND SHAREHOLDERS' EQUITY Notes Payable, Secured $ 24,297 $ -- Other Current Liabilities 11,064 7,603 Total Current Liabilities 35,361 7,603 Deferred Income Taxes 624 543 Shareholders' Equity 76,672 80,280 $112,657 $88,426
Anuhco, Inc. 8245 Nieman Road, Suite 100, Lenexa, Kansas 66214 (913) 859-0055 -----END PRIVACY-ENHANCED MESSAGE-----