-----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, E7rICad2b/rA71B6HOeN240Bjozw6IRqRtSblOdCIh+UkRfsYvCHKE69+q4wcYYF 4I5xwgSR5tTtUp3aF0hQlQ== 0000745379-96-000012.txt : 19961113 0000745379-96-000012.hdr.sgml : 19961113 ACCESSION NUMBER: 0000745379-96-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 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: 96658124 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 September 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 September 30, 1996 -------------------------- ---------------------------------- Common stock, no par value 2,389,497 KENAN TRANSPORT COMPANY INDEX Page ---- Part I - Financial Information Consolidated Balance Sheets as of September 30, 1996 and December 31, 1995 1 Consolidated Statements of Income for the three and nine months ended September 30, 1996 and 1995 2 Consolidated Statements of Cash Flows for the nine months ended September 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 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)
September 30, December 31, 1996 1995 ASSETS (Unaudited) (Note 1) - ----------------------------------------------------------------------- Current Assets Cash and cash equivalents $ 9,540 $ 3,220 Short-term investments -- 6,886 Accounts receivable 4,499 4,945 Operating supplies and parts 463 506 Prepayments - Tires 1,141 1,238 Insurance, licenses and other 929 639 Deferred income taxes 1,805 1,878 - ----------------------------------------------------------------------- Total Current Assets 18,377 19,312 Operating Property Land 3,531 3,398 Buildings and leasehold improvements 8,309 7,159 Revenue equipment 56,685 54,379 Other equipment 4,431 3,492 - ----------------------------------------------------------------------- 72,956 68,428 Accumulated depreciation (28,119) (27,163) - ----------------------------------------------------------------------- Net Operating Property 44,837 41,265 Other Assets 1,123 611 - ----------------------------------------------------------------------- $64,337 $61,188 ======================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY - ----------------------------------------------------------------------- Current Liabilities Accounts payable $ 1,203 $ 975 Wages and employee benefits payable 5,246 4,148 Claims payable 3,837 4,153 Other accrued expenses 219 160 Income taxes payable -- 308 - ----------------------------------------------------------------------- Total Current Liabilities 10,505 9,744 Deferred Income Taxes 9,114 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 41,722 39,681 - ----------------------------------------------------------------------- 44,718 42,677 - ----------------------------------------------------------------------- $64,337 $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 Nine Months Ended September 30, September 30, -------------------- -------------------- 1996 1995 1996 1995 - ----------------------------------------------------------------------------------------- Operating Revenue $16,638 $15,128 $50,862 $45,015 Operating Expenses Wages and employee benefits 8,408 7,886 25,940 23,235 Fuel, parts, tires and other 3,190 2,921 9,610 8,419 Taxes and licenses 1,020 934 3,190 2,869 Claims and insurance 699 614 1,896 1,772 Communications, utilities and rent 346 430 1,132 1,113 Depreciation 1,704 1,419 4,954 4,115 - ----------------------------------------------------------------------------------------- 15,367 14,204 46,722 41,523 - ----------------------------------------------------------------------------------------- Operating Income 1,271 924 4,140 3,492 Interest income and other expenses, net (97) 48 6 365 - ----------------------------------------------------------------------------------------- Income before Provision for Income Taxes 1,174 972 4,146 3,857 Provision for income taxes 458 389 1,627 1,543 - ----------------------------------------------------------------------------------------- Net Income $ 716 $ 583 $ 2,519 $ 2,314 ========================================================================================= Weighted average number of shares outstanding (in thousands) 2,389 2,389 2,389 2,387 Earnings per share $ .30 $ .24 $ 1.05 $ .97 Operating ratio 92.4% 93.9% 91.9% 92.2% Dividends paid per share $ .0675 $ .0650 $ .1975 $ .1900 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 Nine Months Ended September 30, 1996 and 1995 (Unaudited and dollars in thousands)
1996 1995 - ----------------------------------------------------------------------- Cash Provided by (Applied to): Operations $ 8,438 $ 6,755 Purchases of operating property, net (8,526) (7,456) Short-term investments, net 6,886 (4,446) Dividends (478) (460) - ----------------------------------------------------------------------- Net Increase (Decrease) in Cash and Cash Equivalents 6,320 (5,607) Beginning Cash and Cash Equivalents 3,220 12,759 - ----------------------------------------------------------------------- Ending Cash and Cash Equivalents $ 9,540 $ 7,152 ======================================================================= 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 nine months ended September 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 third quarter of 1996 was $16,638,000, an increase of $1,510,000 and 10% over the third quarter of 1995. The growth in third quarter revenue is primarily the result of increased demand for transportation services. Miles operated increased 6% over 1995. Net income was $716,000, an increase of $133,000 and 23% over the third quarter of 1995. Earnings per share were $.30 compared to $.24 in 1995. Revenue for the nine months ended September 30, 1996 was $50,862,000, an increase of $5,847,000 and 13% over 1995. The increase in revenue primarily reflects the effect of increased demand, the acquisition of Cary Oil Company in June of 1995 and expansion into Alabama and Tennessee markets. Miles operated increased 9% over 1995. Net income was $2,519,000, an increase of $205,000 and 9% over the first nine months of 1995. Earnings per share were $1.05 compared to $.97 in 1995. Operating expenses for the third quarter of 1996 totaled $15,367,000, an increase of $1,163,000 and 8% over the third quarter of 1995. Operating expenses increased due to an increase in the volume of business and higher fuel prices. Diesel fuel prices began rising again during the quarter and suppliers are predicting that they will continue to increase through the winter heating season. The Company has fuel surcharge programs in effect that management expects will enable the Company to obtain price adjustments as costs increase due to higher fuel prices. Our operating ratio improved to 92.4% for the quarter from last year's ratio of 93.9%. Operating expenses for the nine months ended September 30, 1996 totaled $46,722,000, an increase of $5,199,000 and 13% over the first nine months of 1995. The operating ratio was 91.9% compared to 92.2% in 1995. Liquidity and Capital Resources - ------------------------------- The Company's liquidity and capital resources are sufficient for the foreseeable future. Working capital at September 30, 1996 was $7,872,000 compared to $9,568,000 at December 31, 1995, and the current ratios were 1.75 and 1.98, respectively. Cash and cash equivalents totaled $9,540,000 at September 30, 1996, and the Company had no debt outstanding under its $7,000,000 bank line of credit. Cash flows for the nine months ended September 30, 1996 totaled $6,320,000 compared to a decrease in cash of $5,607,000 during the same period last year. Cash provided from the sale of short-term investments was $11,332,000 over the first nine months 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 to 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 September 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: November 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 3rd 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 SPETEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000745379 KENAN TRANSPORT COMPANY 1,000 9-MOS DEC-31-1996 SEP-30-1996 9,540 0 4,499 0 463 18,377 72,956 28,119 64,337 10,505 0 0 0 2,996 41,722 64,337 0 50,862 0 46,722 0 0 0 4,146 1,627 2,519 0 0 0 2,519 1.05 1.05
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