-----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, OD4X4zvvRW13mwNEUxdc7JFSDkCMSMIv5oGontB9A1dC8nQFK51vFngOEL8MZAlu v7rXDc1iEw8E0lbXz/JxmQ== 0000745379-96-000010.txt : 19960813 0000745379-96-000010.hdr.sgml : 19960813 ACCESSION NUMBER: 0000745379-96-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 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: 96608061 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 June 30, 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 July 31, 1996 -------------------------- ------------------------------ Common stock, no par value 2,389,497 KENAN TRANSPORT COMPANY INDEX Page ---- Part I - Financial Information Consolidated Balance Sheets as of June 30, 1996 and December 31, 1995 1 Consolidated Statements of Income for the three and six months ended June 30, 1996 and 1995 2 Consolidated Statements of Cash Flows for the six months ended June 30, 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 4 - Submission of Matters to a Vote of Security Holders 6 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)
June 30, December 31, 1996 1995 ASSETS (Unaudited) (Note 1) - ----------------------------------------------------------------------- Current Assets Cash and cash equivalents $ 6,591 $ 3,220 Short-term investments 810 6,886 Accounts receivable 5,310 4,945 Operating supplies and parts 450 506 Prepayments - Tires 1,239 1,238 Insurance, licenses and other 880 639 Deferred income taxes 1,714 1,878 - ----------------------------------------------------------------------- Total Current Assets 16,994 19,312 Operating Property Land 3,408 3,398 Buildings and leasehold improvements 7,789 7,159 Revenue equipment 56,118 54,379 Other equipment 4,450 3,492 - ----------------------------------------------------------------------- 71,765 68,428 Accumulated depreciation (26,506) (27,163) - ----------------------------------------------------------------------- Net Operating Property 45,259 41,265 Other Assets 1,222 611 - ----------------------------------------------------------------------- $63,475 $61,188 ======================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY - ----------------------------------------------------------------------- Current Liabilities Accounts payable $ 2,191 $ 975 Wages and employee benefits payable 4,121 4,148 Claims payable 3,772 4,153 Other accrued expenses 163 160 Income taxes payable -- 308 - ----------------------------------------------------------------------- Total Current Liabilities 10,247 9,744 Deferred Income Taxes 9,065 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 41,167 39,681 - ----------------------------------------------------------------------- 44,163 42,677 - ----------------------------------------------------------------------- $63,475 $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 (Unaudited and dollars in thousands except per share amounts) Three Months Ended Six Months Ended June 30, June 30, -------------------- -------------------- 1996 1995 1996 1995 - ----------------------------------------------------------------------------------------- Operating Revenue $16,637 $14,490 $34,224 $29,887 Operating Expenses Wages and employee benefits 8,606 7,433 17,532 15,349 Fuel, parts, tires and other 3,122 2,759 6,420 5,498 Taxes and licenses 1,046 948 2,170 1,935 Claims and insurance 596 636 1,197 1,158 Communications, utilities and rent 357 335 786 683 Depreciation 1,689 1,347 3,250 2,696 - ----------------------------------------------------------------------------------------- 15,416 13,458 31,355 27,319 - ----------------------------------------------------------------------------------------- Operating Income 1,221 1,032 2,869 2,568 Interest income and other expenses, net 33 146 103 317 - ----------------------------------------------------------------------------------------- Income before Provision for Income Taxes 1,254 1,178 2,972 2,885 Provision for income taxes 491 471 1,169 1,154 - ----------------------------------------------------------------------------------------- Net Income $ 763 $ 707 $ 1,803 $ 1,731 ========================================================================================= Weighted average number of shares outstanding (in thousands) 2,389 2,389 2,389 2,385 Earnings per share $ .32 $ .30 $ .76 $ .73 Operating ratio 92.7% 92.9% 91.6% 91.4% Dividends paid per share $ .0650 $ .0625 $ .1300 $ .1250 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 Six Months Ended June 30, 1996 and 1995 (Unaudited and dollars in thousands)
1996 1995 - ----------------------------------------------------------------------- Cash Provided by (Applied to): Operations $ 4,856 $ 3,553 Purchases of operating property, net (7,244) (5,556) Short-term investments, net 6,076 (2,061) Dividends (317) (305) - ----------------------------------------------------------------------- Net Increase (Decrease) in Cash and Cash Equivalents 3,371 (4,369) Beginning Cash and Cash Equivalents 3,220 12,759 - ----------------------------------------------------------------------- Ending Cash and Cash Equivalents $ 6,591 $ 8,390 ======================================================================= 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 and six months ended June 30, 1996 and 1995 are not necessarily indicative of the results to be expected for the full year. 2. Purchase of Assets On June 29, 1995, the Company purchased the transportation assets of Cary Oil Company, Inc. for cash and entered into a long-term contract to provide transportation services to Cary Oil. 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 second quarter of 1996 was $16,637,000, an increase of $2,147,000 and 15% over the second quarter of 1995. Net income was $763,000, an increase of $56,000 and 8% over the second quarter of 1995. Earnings per share were $.32 compared to $.30 in 1995. Miles operated increased 11% in comparison to the second quarter of 1995. Revenue for the six months ended June 30, 1996 was $34,224,000, an increase of $4,337,000 and 15% over the first half of 1995. Net income was $1,803,000, an increase of $72,000 and 4% over the first half of 1995. Earnings per share were $.76 compared to $.73 in 1995. Miles operated increased 11% in comparison to the first half of 1995. Operating expenses for the second quarter of 1996 totaled $15,416,000, an increase of $1,958,000 and 15% over the second quarter of 1995. The increase was primarily the result of additional volume and to a lesser extent, higher fuel prices, depreciation and drivers' pay. The operating ratio decreased to 92.7% from 92.9% in 1995. Operating expenses for the six months ended June 30, 1996 totaled $31,355,000, an increase of $4,036,000 and 15% over the first half of 1996. The operating ratio increased slightly to 91.6% from 91.4% in 1995. Liquidity and Capital Resources - ------------------------------- The Company believes its liquidity and capital resources are sufficient for the foreseeable future. Working capital was $6,747,000 compared to $9,568,000 at December 31, 1995, and the current ratios were 1.66 and 1.98, respectively. Cash and cash equivalents totaled $6,591,000 at June 30, 1996, and the Company had no debt outstanding under its $7,000,000 bank line of credit. Cash flows for the first half of 1996 totaled $3,371,000 compared to a decrease in cash of $4,369,000 during the same period last year. Cash flows from operations were $4,856,000 compared to $3,553,000 in 1995. Construction of new terminal facilities in Ft. Lauderdale and Atlanta caused net capital expenditures in 1996 to be up $1,688,000 over 1995 levels. Cash provided from the sale of short-term investments was $8,137,000 over the first half of 1995 as short-term investments matured and were reinvested in cash equivalents. 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 4. Submission of Matters to a Vote of Security Holders - ------- --------------------------------------------------- The Registrant's Annual Meeting of Stockholders was held on May 6, 1996 for the purpose of electing a board of directors and to transact other business as came before the meeting. Proxies for the meeting were solicited pursuant to Section 14(a) of the Securities Act of 1934 and there was no solicitation in opposition to management's solicitations. The proposals voted upon and the results of voting were as follows: (1) Nominees for directors as listed in the proxy statement were elected for a one year term with the following vote: Votes Votes Broker For Withheld Non-votes --------- -------- --------- Frank H. Kenan 1,974,920 -0- 386,356 Lee P. Shaffer 1,974,920 -0- 384,916 William C. Friday 1,974,080 -0- 384,916 Owen G. Kenan 1,974,920 -0- 384,916 Thomas S. Kenan, III 1,974,920 -0- 384,916 Braxton Schell 1,974,520 -0- 384,916 Paul Wright, Jr. 1,974,920 -0- 384,916 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 June 30, 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: August 8, 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 2nd Quarter 10-Q. Page 8
EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000745379 KENAN TRANSPORT COMPANY 1,000 6-MOS DEC-31-1996 JUN-30-1996 6,591 810 5,310 0 450 16,994 71,765 26,506 63,475 10,247 0 0 0 2,996 41,167 63,475 0 34,224 0 31,355 0 0 0 2,972 1,169 1,803 0 0 0 1,803 .76 .76
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