-----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, BHL1DxeUBfcIZx6uuoJZCZyTiGX8G5yaV+m0l0LjXJPiLpocpnMV1U1RLv6WKPtw bIFpzUP5V9yfi0kuPbbmIA== 0000745379-97-000005.txt : 19970514 0000745379-97-000005.hdr.sgml : 19970514 ACCESSION NUMBER: 0000745379-97-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 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: 97601724 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, 1997 ------------------------- 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 No X ------- ------- 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, 1997 -------------------------- ----------------------------- Common stock, no par value 2,394,780 KENAN TRANSPORT COMPANY INDEX Page ---- Part I - Financial Information Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996 1 Consolidated Statements of Income for the three months ended March 31, 1997 and 1996 2 Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996 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, 1997 1996 ASSETS (Unaudited) (Note 1) - ------------------------------------------------------------------------- Current Assets Cash and cash equivalents $12,838 $11,181 Accounts receivable 4,265 4,988 Operating supplies and parts 551 413 Prepayments Tires 880 1,033 Insurance, licenses and other 1,223 698 Deferred income taxes 1,563 1,741 ------------------------ Total Current Assets 21,320 20,054 Operating Property Land 3,531 3,531 Buildings and leasehold improvements 9,643 9,279 Revenue equipment 55,437 56,015 Other equipment 3,996 3,923 ------------------------ 72,607 72,748 Accumulated depreciation (29,926) (28,615) ------------------------ Net Operating Property 42,681 44,133 Other Assets 1,139 857 ------------------------ $65,140 $65,044 ======================== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------------------------------------------- Current Liabilities Accounts payable $ 1,063 $ 1,257 Wages and employee benefits payable 4,440 5,136 Claims payable 3,180 3,409 Other accrued expenses 116 166 Income taxes payable 564 52 ------------------------ Total Current Liabilities 9,363 10,020 Deferred Income Taxes 9,020 9,181 Stockholders' Equity Common stock; no par; 20,000,000 shares authorized; 2,394,780 and 2,389,497 shares issued and outstanding 3,096 2,996 Retained earnings 43,661 42,847 ------------------------ 46,757 45,843 ------------------------ $65,140 $65,044 ======================== 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, 1997 and 1996 (Unaudited and dollars in thousands except per share amounts) 1997 1996 - ------------------------------------------------------------------------ Operating Revenue $17,746 $17,587 Operating Expenses Wages and employee benefits 8,950 8,926 Fuel, parts, tires and other 3,499 3,298 Taxes and licenses 1,094 1,124 Claims and insurance 644 601 Communications, utilities and rent 363 429 Depreciation 1,655 1,561 ------------------------ 16,205 15,939 ------------------------ Operating Income 1,541 1,648 Interest income and other expenses, net 46 70 ------------------------ Income before Provision for Income Taxes 1,587 1,718 Provision for income taxes 611 678 ------------------------ Net Income $ 976 $ 1,040 ======================== Weighted average number of shares outstanding (in thousands) 2,390 2,389 Earnings per share $ .41 $ .44 Operating ratio 91.3% 90.6% Dividends paid per share $ .0675 $ .0650 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, 1997 and 1996 (Unaudited and dollars in thousands) 1997 1996 - ------------------------------------------------------------------------ Cash Provided by (Applied to): Operations $ 2,022 $ 2,782 Purchases of operating property, net (203) (2,508) Sales of short-term investments, net -- 6,076 Dividends (162) (155) ------------------------ Net Increase in Cash and Cash Equivalents 1,657 6,195 Beginning Cash and Cash Equivalents 11,181 3,220 ------------------------ Ending Cash and Cash Equivalents $12,838 $ 9,415 ======================== 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, 1996 has been taken from the audited financial statements at that date. The results of operations for the three months ended March 31, 1997 and 1996 are not necessarily indicative of the results to be expected for the full year. 2. Effects of Recent Accounting Pronouncements - ------------------------------------------------ The Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share", in February 1997. The Company is required to adopt SFAS No. 128 for the year ended December 31, 1997. This statement establishes standards for computing and presenting earnings per share (EPS) and makes them comparable to international EPS standards. The statement requires dual presentation of basic and diluted EPS on the face of the income statement and requires a reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the diluted EPS calculation. Basic and diluted EPS will not be materially different from previously reported EPS. 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 1997 was $17,746,000 compared to $17,587,000 for the first quarter of 1996. Net income was $976,000 compared to $1,040,000 in 1996. Earnings per share were $.41 compared to $.44 during the same period last year. Miles operated decreased 1% from the first quarter of 1996. First quarter revenue and earnings were impacted by unusually warm winter weather which was significantly warmer than the first quarter last year. Demand for heating fuels that the Company transports was affected negatively by the warmer weather. Operating expenses for the first quarter of 1997 increased $266,000 or 2% over 1996 levels, due primarily to higher fuel prices and depreciation expense. Although fuel prices for the quarter were higher, we were able to obtain substantial relief from fuel surcharges that are included in revenue. The increase in depreciation expense was largely due to new terminal facilities and computer equipment placed in service during the past twelve months. Our operating ratio for the quarter was 91.3% compared to 90.6% in 1996. Liquidity and Capital Resources - ------------------------------- The Company's liquidity and capital resources are adequate. At March 31, 1997, working capital was $11,957,000 compared to $10,034,000 at December 31, 1996, and the current ratios were 2.28 and 2.00, respectively. Cash and cash equivalents totaled $12,838,000 at March 31, 1997, and the Company had no debt outstanding under its $7,000,000 bank line of credit. The Company has second quarter cash commitments of approximately $5,000,000 for tractor replacements. Management believes that cash flows from operations and the Company's bank line of credit will be sufficient to fund these planned expenditures as well as 1997 working capital requirements, expansion opportunities and other corporate needs. The Company's operations require the storage of fuel for use in its tractors in both underground and aboveground tanks. The Company has a program to maintain its fuel storage facilities in compliance with environmental regulation. 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, 1997. 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 9, 1997 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, 1997. 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, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000745379 KENAN TRANSPORT COMPANY 1,000 3-MOS DEC-31-1997 MAR-31-1997 12,838 0 4,265 0 551 21,320 72,607 29,926 65,140 9,363 0 0 0 3,096 43,661 65,140 0 17,746 0 16,205 0 0 0 1,587 611 976 0 0 0 976 .41 .41
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