-----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, KyVQqyFercsEvUooeAl8oqZQkqnSiTz7PMfiarnDGBey7klcH0/XGY8QpTV5Jj+b 7p5tqZZXAh1gVlsgx1+6LA== 0000745379-96-000008.txt : 19960514 0000745379-96-000008.hdr.sgml : 19960514 ACCESSION NUMBER: 0000745379-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: KENAN TRANSPORT CO CENTRAL INDEX KEY: 0000745379 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 560516485 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12058 FILM NUMBER: 96561028 BUSINESS ADDRESS: STREET 1: 143 W FRANKLIN ST STREET 2: UNIVERSITY SQ WEST POST OFFICE BOX 2729 CITY: CHAPEL HILL STATE: NC ZIP: 27516-3910 BUSINESS PHONE: 9199678221 MAIL ADDRESS: STREET 1: UNIVERSITY SQUARE WEST STREET 2: 143 W FRANKLIN ST P O BOX 2729 CITY: CHAPEL HILL STATE: NC ZIP: 27515-2729 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 ------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-12058 ------- KENAN TRANSPORT COMPANY ------------------------------------------------------ (Exact name of registrant as specified in its charter) North Carolina 56-0516485 ------------------------------- --------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) University Square - West, 143 W. Franklin Street Chapel Hill, North Carolina, 27516-3910 ----------------------------------------------------------- (Address of principal executive offices, including Zip Code) (919) 967-8221 ----------------------------------------------------------- (Registrant's telephone number, including Area Code) 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 April 30, 1996 -------------------------- ----------------------------- Common stock, no par value 2,389,497 KENAN TRANSPORT COMPANY INDEX Page ---- Part I - Financial Information Consolidated Balance Sheets as of March 31, 1996 and December 31, 1995 1 Consolidated Statements of Income for the three months ended March 31, 1996 and 1995 2 Consolidated Statements of Cash Flows for the three months ended March 31, 1996 and 1995 3 Notes to Consolidated Financial Statements 4 Management's Discussion and Analysis of Financial Condition and Results of Operations 5 Part II - Other Information Item 6 - Exhibits and Reports on Form 8-K 6 Signatures 7 Index to Exhibits 8 PART I - FINANCIAL INFORMATION KENAN TRANSPORT COMPANY CONSOLIDATED BALANCE SHEETS (Dollars in thousands) March 31, December 31, 1996 1995 ASSETS (Unaudited) (Note 1) - ------------------------------------------------------------------------- Current Assets Cash and cash equivalents $ 9,415 $ 3,220 Short-term investments 810 6,886 Accounts receivable 4,799 4,945 Operating supplies and parts 526 506 Prepayments -- Tires 1,161 1,238 Insurance, licenses and other 1,226 639 Deferred income taxes 1,772 1,878 ------------------------ Total Current Assets 19,709 19,312 Operating Property Land 3,398 3,398 Buildings and leasehold improvements 7,639 7,159 Revenue equipment 55,667 54,379 Other equipment 3,758 3,492 ------------------------ 70,462 68,428 Accumulated depreciation (28,250) (27,163) ------------------------ Net Operating Property 42,212 41,265 Other Assets 760 611 ------------------------ $62,681 $61,188 ======================== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------------------------------------------- Current Liabilities Accounts payable $ 1,577 $ 975 Wages and employee benefits payable 4,107 4,148 Claims payable 3,931 4,153 Other accrued expenses 87 160 Income taxes payable 598 308 ------------------------ Total Current Liabilities 10,300 9,744 Deferred Income Taxes 8,819 8,767 Stockholders' Equity Common stock; no par; 20,000,000 shares authorized; 2,389,497 shares issued and outstanding 2,996 2,996 Retained earnings 40,566 39,681 ------------------------ 43,562 42,677 ------------------------ $62,681 $61,188 ======================== The Notes to Consolidated Financial Statements are an integral part of these balance sheets. Page 1 KENAN TRANSPORT COMPANY CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended March 31, 1996 and 1995 (Unaudited and dollars in thousands except per share amounts) 1996 1995 - ------------------------------------------------------------------------ Operating Revenue $17,587 $15,397 Operating Expenses Wages and employee benefits 8,926 7,916 Fuel, parts, tires and other 3,298 2,739 Taxes and licenses 1,124 987 Claims and insurance 601 522 Communications, utilities and rent 429 348 Depreciation 1,561 1,349 ------------------------ 15,939 13,861 ------------------------ Operating Income 1,648 1,536 Interest income and other expenses, net 70 171 ------------------------ Income before Provision for Income Taxes 1,718 1,707 Provision for income taxes 678 683 ------------------------ Net Income $ 1,040 $ 1,024 ======================== Weighted average number of shares outstanding (in thousands) 2,389 2,380 Earnings per share $ .44 $ .43 Operating ratio 90.6% 90.0% Dividends paid per share $ .0650 $ .0625 The Notes to Consolidated Financial Statements are an integral part of these statements. Page 2 KENAN TRANSPORT COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 1996 and 1995 (Unaudited and dollars in thousands) 1996 1995 - ------------------------------------------------------------------------ Cash Provided by (Applied to): Operations $ 2,782 $ 2,682 Purchases of operating property, net (2,508) (299) Sales of short-term investments, net 6,076 1,000 Dividends (155) (149) ------------------------ Net Increase in Cash and Cash Equivalents 6,195 3,234 Beginning Cash and Cash Equivalents 3,220 12,759 ------------------------ Ending Cash and Cash Equivalents $ 9,415 $15,993 ======================== The Notes to Consolidated Financial Statements are an integral part of these statements. Page 3 KENAN TRANSPORT COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation - -------------------------- The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) that are, in the opinion of management, necessary for a fair statement of results for the interim periods. The balance sheet at December 31, 1995 has been taken from the audited financial statements at that date. The results of operations for the three months ended March 31, 1996 and 1995 are not necessarily indicative of the results to be expected for the full year. Page 4 KENAN TRANSPORT COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of certain significant factors that have affected the Company's financial position and operating results during the periods included in the accompanying financial statements. Results of Operations - ------------------------------- Revenue for the first quarter of 1996 was $17,587,000, an increase of $2,190,000 and 14% from the first quarter of 1995. Net income was $1,040,000 compared to $1,024,000 in 1995. Earnings per share were $.44 compared to $.43 during the same period last year. Colder than normal weather during the first quarter positively affected demand for heating fuels and our revenue from transportation of those products. The addition of transportation services to Cary Oil and entry into Alabama and Tennessee markets also contributed to revenue growth for the quarter. Miles operated increased 10% to 11,391,000 in 1996. Operating expenses for the first quarter of 1996 were $15,939,000 compared to $13,861,000 in 1995, an increase of 15%. Operating expenses increased due to additional costs incurred to handle the growth in revenue, higher costs of driver pay primarily caused by waiting time at congested pipeline terminals during peak demand periods and higher fuel prices. The severe winter weather and tight petroleum supplies combined to increase the price of diesel fuel used in our operation by 18%. Our operating ratio for the quarter was 90.6% compared to 90.0% in 1995 and an industry ratio over 96% for all of 1995. Liquidity and Capital Resources - ------------------------------- The Company believes its liquidity and capital resources are sufficient for the foreseeable future. Working capital was $9,409,000 compared to $9,568,000 at December 31, 1995, and the current ratios were 1.91 and 1.98, respectively. Cash and cash equivalents totaled $9,415,000 at March 31, 1996, and the Company had no debt outstanding under its $7,000,000 bank line of credit. Cash flows for the first three months of 1996 totaled $6,195,000 compared to $3,234,000 during the same period last year. Cash flows from operations were $2,782,000 compared to $2,682,000 in 1995. Completion of a new terminal facility in Atlanta, Georgia during the first quarter of 1996 caused net purchases of operating property to increase $2,209,000 over 1995 levels. Cash provided from the sale of short-term investments was up $5,076,000 over the first quarter of 1995 as short-term investments matured and were reinvested in cash equivalents. The Company has second quarter cash commitments of approximately $5,900,000 for tractor and trailer replacements, substantially completing capital expenditures for the year. It is expected that capital expenditure requirements will be met with internal cash resources. The Company's operations require the storage of fuel for use in its tractors in both underground and aboveground tanks. In 1989 the Company implemented a program to upgrade its fuel storage facilities. Under the program, the Company incurs costs to replace tanks, remediate soil contamination resulting from overfills, spills and leaks and monitor facilities on an ongoing basis. These costs are recorded when it is probable that a liability has been incurred and the related amount can be reasonably estimated. Such costs have not been and are not expected to be material to the Company's operations or liquidity. Page 5 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K - ------- -------------------------------- (a) The Exhibits to this Form 10-Q are listed on the accompanying Index to Exhibits. (b) No reports on Form 8-K have been filed during the quarter ended March 31, 1996. Page 6 SIGNATURES 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. KENAN TRANSPORT COMPANY (Registrant) DATE: May 10, 1996 BY:/s/ William L. Boone ---------------------------- Vice President-Finance and Chief Financial Officer Page 7 INDEX TO EXHIBITS The exhibits filed as part of this report are listed below: Exhibit Number Description --------- -------------------------------------------------------- 27 Financial Data Schedule for the quarter ending March 31, 1996. Page 8 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000745379 KENAN TRANSPORT COMPANY 1,000 3-MOS DEC-31-1996 MAR-31-1996 9,415 0 4,799 0 526 19,709 70,462 28,250 62,681 10,300 0 0 0 2,996 40,566 62,681 0 17,587 0 15,939 0 0 0 1,718 678 1,040 0 0 0 1,040 .44 .44
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