-----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, Wdlc+jzd10L/MLz8k7hRU0hupO+t1vX6Oas2HQ7vsg39fNHTthdBFhAoV1y1zmMd Wcn2T4MjDbN08pNgltbCig== 0000950152-99-007077.txt : 19990823 0000950152-99-007077.hdr.sgml : 19990823 ACCESSION NUMBER: 0000950152-99-007077 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTRENET INC CENTRAL INDEX KEY: 0000778161 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 351597565 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14060 FILM NUMBER: 99697056 BUSINESS ADDRESS: STREET 1: 400 TECHNECENTER DRIVE SUITE 200 CITY: MILFORD STATE: OH ZIP: 45150 BUSINESS PHONE: 5135766666 FORMER COMPANY: FORMER CONFORMED NAME: CIRCLE EXPRESS INC DATE OF NAME CHANGE: 19900702 10-Q 1 INTRENET, INC. 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (AS FILED VIA EDGAR ON AUGUST 20, 1999) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - ----- EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 1999 ---------------- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - ----- EXCHANGE ACT OF 1934 For the transition period from ______________ to ____________ Commission file number 0-14060 --------- INTRENET, INC. -------------- (Exact name of registrant as specified in its charter) INDIANA 35-1597565 - ------------------------------- -------------------------------- (State or other jurisdiction of (IRS Employer Identification No) incorporation or organization) 400 TECHNECENTER DRIVE, SUITE 200, MILFORD, OHIO 45150 ------------------------------------------------ --------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (513) 576-6666 ------------------- Not Applicable --------------------------------------------------- Former name, former address and former fiscal year, if changed since last report 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 ------ ------ APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, without par value, 13,684,066 shares issued and outstanding at August 2, 1999. 2 INTRENET, INC. FORM 10-Q JUNE 30, 1999 INDEX
PAGE ---- Part I - Financial Information: Item 1. Financial Statements: Condensed Consolidated Balance Sheets June 30, 1999 and December 31, 1998 ............................. 3 Condensed Consolidated Statements of Operations Three Months and Six Months Ended ............................... 4 June 30, 1999 and 1998 Condensed Consolidated Statement of Shareholders' Equity Six Months Ended June 30, 1999 .................................. 5 Condensed Consolidated Statements of Cash Flows Three Months and Six Months Ended ............................... 6 June 30, 1999 and 1998 Notes to Condensed Consolidated Financial Statements .............. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ............................ 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk ......... 12 Part II - Other Information: Item 1. Legal Proceedings ................................................. 13 Item 2. Changes in Securities ............................................. 13 Item 3. Defaults Upon Senior Securities ................................... 13 Item 4. Submission of Matters to a Vote of Security Holders ............... 14 Item 5. Other Information ................................................. 14 Item 6. Exhibits and Reports on Form 8-K .................................. 14
2 3 INTRENET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 1999 AND DECEMBER 31, 1998 (In Thousands of Dollars)
Assets 1999 1998 ------ ---- ---- (UNAUDITED) Current assets: Cash and cash equivalents $ 340 $ 271 Receivables, principally freight revenue less allowance for doubtful accounts of $1,781 in 1999 and $1,538 in 1998 38,661 33,233 Prepaid expenses and other 6,102 5,402 ------- ------- Total current assets 45,103 38,906 Property and equipment, at cost, less accumulated depreciation 26,422 28,833 Reorganization value in excess of amounts allocated to identifiable assets, net of accumulated amortization 4,755 4,967 Deferred income taxes, net 2,886 2,886 Other assets 515 2,208 ------- ------- Total assets $79,681 $77,800 ======= ======= Liabilities and Shareholders' Equity ------------------------------------ Current liabilities: Current debt and capital lease obligations $ 4,024 $ 5,789 Accounts payable and cash overdrafts 9,179 9,439 Current accrued claim liabilities 7,541 7,878 Other accrued expenses 8,267 7,418 ------- ------- Total current liabilities 29,011 30,524 ------- ------- Long-term debt and capital lease obligations 25,924 20,105 Long-term accrued claim liabilities 2,800 2,800 ------- ------- Total liabilities 57,735 53,429 ------- ------- Shareholders' equity: Common stock, without par value; 20,000,000 shares authorized; 13,674,066 and 13,662,066 shares issued and outstanding, respectively 16,881 16,856 Retained earnings since January 1, 1991 5,065 7,515 ------- ------- Total shareholders' equity 21,946 24,371 ------- ------- Total liabilities and shareholders' equity $79,681 $77,800 ======= =======
The accompanying notes are an integral part of these consolidated financial statements. 3 4 INTRENET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (Unaudited) (In Thousands of Dollars, Except Per Share Data)
Three Months Six Months Ended June 30, Ended June 30, -------------- -------------- 1999 1998 1999 1998 ---- ---- ---- ---- Operating revenues $ 72,171 $ 66,351 $ 138,486 $ 127,027 Operating expenses: Purchased transportation and equipment rents 33,763 29,861 64,096 57,098 Salaries, wages, and benefits 18,215 15,767 35,105 30,231 Fuel and other operating expenses 12,982 11,961 24,712 23,160 Operating taxes and licenses 2,595 2,554 5,119 5,068 Insurance and claims 2,252 1,974 4,008 3,945 Depreciation 986 977 1,968 1,964 Other operating expenses 1,174 903 2,178 1,923 ------------ ------------ ------------ ------------ 71,967 63,997 137,186 123,389 ------------ ------------ ------------ ------------ Operating income 204 2,354 1,300 3,638 Interest expense (622) (643) (1,241) (1,303) Contigent liability special charge (2,207) -- (2,207) -- Other expense, net (105) (105) (210) (210) ------------ ------------ ------------ ------------ Earnings before income taxes (2,730) 1,606 (2,358) 2,125 Provision for income taxes 48 (360) (92) (491) ------------ ------------ ------------ ------------ Net earnings $ (2,682) $ 1,246 $ (2,450) $ 1,634 ============ ============ ============ ============ Earnings per common and common equivalent share Basic $ (0.20) $ 0.09 $ (0.18) $ 0.12 ============ ============ ============ ============ Diluted $ (0.19) $ 0.09 $ (0.18) $ 0.12 ============ ============ ============ ============ Weighted average shares outstanding during period 13,674,066 13,550,638 13,671,668 13,549,934 ============ ============ ============ ============
The accompanying notes are an integral part of these consolidated financial statements. 4 5 INTRENET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 1999 (Unaudited) (In Thousands of Dollars)
Common Stock ---------------------------- Retained Shareholders' Shares Dollars Earnings Equity ----------- ---------- ---------- ------------- Balance, December 31, 1998 13,662,066 $ 16,856 $ 7,515 $ 24,371 Exercise of stock options 12,000 25 -- 25 Net earnings for 1999 -- -- (2,450) (2,450) ---------- ---------- ---------- ---------- Balance, June 30, 1999 13,674,066 $ 16,881 $ 5,065 $ 21,946 ========== ========== ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. 5 6 INTRENET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (Unaudited) (In Thousands of Dollars)
Three Months Six Months Ended June 30, Ended June 30, --------------- -------------- 1999 1998 1999 1998 ---- ---- ---- ---- Cash flows from operating activities: Net earnings $(2,682) $ 1,246 $(2,450) $ 1,634 Adjustments to reconcile net earnings to net cash provided by operating activities: Deferred income taxes (61) 360 0 491 Depreciation and amortization 1,098 1,097 2,192 2,204 Provision for doubtful accounts 122 74 228 133 Contigent liability charge 2,118 -- 2,118 -- Changes in assets and liabilities, net: Receivables (2,414) (3,586) (5,656) (3,592) Prepaid expenses 1,001 397 (700) (1,743) Accounts payable and accrued expenses (11) (155) (172) 880 ------- ------- ------- ------- Net cash provided by (used in) operating activities (829) (567) (4,440) 7 ------- ------- ------- ------- Cash flows from financing activities: Net borrowings on line of credit, net 1,662 2,210 5,913 2,829 Principal payments on long-term debt (979) (854) (1,858) (1,826) Proceeds from exercise of stock options 0 0 25 5 ------- ------- ------- ------- Net cash provided by financing activities 683 1,356 4,080 1,008 ------- ------- ------- ------- Cash flows from investing activities: Additions to property and equipment (108) (557) (1,056) (646) Disposals of property and equipment 109 19 1,485 97 ------- ------- ------- ------- Net cash provided by (used in) investing activities 1 (538) 429 (549) ------- ------- ------- ------- Net increase (decrease) in cash and cash equivalents (145) 251 69 466 Cash and cash equivalents: Beginning of period 485 813 271 598 ------- ------- ------- ------- End of period $ 340 $ 1,064 $ 340 $ 1,064 ======= ======= ======= =======
The accompanying notes are an integral part of these consolidated financial statements. 6 7 INTRENET, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1999 (Unaudited) (1) UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS The accompanying unaudited consolidated financial statements include the accounts of Intrenet, Inc. and all of its subsidiaries (collectively, the Company). Operating subsidiaries at June 30, 1999 were Roadrunner Trucking, Inc. (RRT), Eck Miller Transportation Corporation (EMT), Advanced Distribution System, Inc. (ADS), and Roadrunner Distribution Services, Inc. (RDS). Also included is the Company's intermodal broker and logistics manager, INET Logistics, Inc. (INL). All significant intercompany transactions are eliminated in consolidation. Through its subsidiaries, the Company provides general and specialized truckload carrier, brokerage and logistics management services throughout North America. The consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In management's opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods presented. 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. For this reason, the accompanying consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes for the year ended December 31, 1998, included in the Company's 1998 Annual Report on Form 10-K. Earnings per common and common equivalent share have been computed on the basis of the weighted average common shares outstanding during the periods. The results for the three month and six month periods ended June 30, 1999, are not necessarily indicative of the results to be expected for the entire year. (2) INCOME TAXES Due to the year-to-date loss in 1999, the Company did not record Federal tax expense for the year. The Federal tax expense recorded in the first quarter was credited to income in the second quarter. The tax assets created in 1999 have been fully reserved. (3) CONTINGENT LIABILITIES On June 13, 1997, the Company received notice from the Central States Southeast and Southwest Areas Pension Fund (the "Fund") of a claim pursuant to the Employee Retirement Income Security Act of 1974, as amended by the Multi-employer Pension Plan Amendments Act of 1980 ("MPPAA"). MPPAA provides that, if an employer withdraws from participation in a multi-employer pension plan, such as the Fund, the employer and members of the employer's "controlled group" of businesses are jointly and severally liable for a portion of the plan's under funding. The claim is based on the withdrawal of R-W Service System, Inc. ("RW") from the Fund in 1992. The Company's records indicate that RW was an indirect subsidiary of the Company's predecessor, Circle Express, Inc., from March 1985 through April 1988, when it and certain other subsidiaries were sold. The Fund currently claims that RW's withdrawal liability is approximately $3.7 million plus accrued interest in the amount of approximately $1.7 million. The Company filed a formal request for review of the claim as provided by the MPPAA, the Fund rejected that request and the claim is now the subject of binding arbitration. The Company is obligated to make interim payments to the Fund until the issue of liability is resolved. The interim payment obligation is currently approximately $88,500 per month. Through June 30, 1999, the Company had made payments to the Fund that total approximately $2.1 million. Through the first quarter of 1999, the parties had widely divergent settlement positions. The claim was the subject of a binding arbitration proceeding and it was not possible to estimate a potential loss with respect to the claim. Therefore, the Company had not recorded a loss contingency for the claim. In August, the parties engaged in meaningful settlement negotiations. As part of the negotiations, the Company offered to pay the Fund $2.2 million in full satisfaction of the 7 8 claim. Accordingly, the Company established a special charge of $2.2 million with respect to this claim in the second quarter of 1999. At this point, neither the Fund nor the Company have agreed to any settlement. There can be no assurance that the ultimate resolution of this matter will not have a material adverse effect on the Company's liquidity, results of operations or financial condition. The Company's subsidiary, RDS, is a defendant in an action brought on March 20, 1997, in the 327th District Court, El Paso, Texas, by a former employee. The plaintiff alleged that he was injured as a result of the negligence and gross negligence of RDS and received discriminatory treatment in violation of the Texas Health and Safety Code. On March 13, 1998, a default judgment was entered against RDS in the approximate amount of $1.0 million, representing damages for medical expenses, loss of wage earning capacity, physical pain and mental anguish, physical impairment, disfigurement and punitive damages. RDS filed an appeal to the 8th Circuit Court of Appeals in El Paso, Texas. In its appeal, RDS asserted it was never properly served in the action and that there was insufficient basis to support an award of punitive damages. RDS has notified its workers' compensation carrier of the award. On July 29, 1999, the 8th Circuit Court of Appeals in El Paso issued a favorable ruling for RDS, reversing the default judgment and remanding the case for trial. Management believes that this action should not have a material adverse effect on the Company's liquidity, results of operations or financial condition. There are no other material pending legal proceedings to which the Company or any of its subsidiaries is a party or of which any of their property is the subject, other than routine litigation incidental to its business, primarily involving claims for personal injury and property damage incurred in the transportation of freight. The Company maintains insurance which covers liability resulting from such transportation related claims in amounts customary for the industry and which management believes to be adequate. (4) TRANSACTIONS WITH AFFILIATED PARTIES To date, in 1999, the Company has leased approximately 125 tractors from an unaffiliated leasing company which had purchased the trucks from a dealership affiliated with a member of the Company's Board of Directors and a current officer of the Company. The lessor paid a selling commission to the dealership. The terms of the lease were the result of negotiations between the Company and the lessor. The Company believes the involvement of the selling dealership did not result in lease terms that are more of less favorable to the Company than would otherwise be available to it. During the last three years, the Company has leased an average of 225 tractors a year that were purchased from the dealership. The Company also purchases maintenance parts and services from the dealership from time to time. Total payments to the dealership for these services have average approximately $500,000 per year for the last three years. 8 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS INTRODUCTION The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this report. Certain statements made in this report relating to trends in the Company's business, as well as other statements including such words as "believe", "expect", "anticipate", and other similar expressions constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For a description of risks and uncertainties relating to forward looking statements, see the discussion in the Company's Annual Report on Form 10-K for the year ended December 31, 1998. The Company reported a net loss of $2,682,000 on revenues of $72.2 million in the three months and a net loss of $2,450,000 on revenues of $138.5 million in the six months ended June 30, 1999. This compares with net earnings of $1,246,000 on revenues of $66.4 million, and net earnings of $1,634,000 on revenues of $127.0 million in the comparable periods of 1998, respectively. The Company's revenue grew by 8.7 percent in the second quarter of 1999 and all of its subsidiaries reported revenue improvements during the quarter and for the full year. Fuel prices have been rising all year, reflecting a price per gallon for the second quarter that was approximately $.03 higher than the prior year's quarter, however the average price for the six months period was approximately $.03 per gallon lower than the prior year. Revenue miles increased for the quarter and year to date; however, increased fuel cost, driver turnover, higher driver wages and inefficient equipment utilization have adversely affected profitability. The Company has implemented programs to improve equipment utilization and believes that higher wages will reduce driver turnover. The Company also experienced one time expenses totaling $2.8 million in connection with a pending legal proceeding and severance arrangements with former Company management. Barring any unforeseen changes in the overall economy, the Company expects it will benefit from continuing cost reduction programs in the areas of a better fuel purchase network, safety, purchasing and insurance costs. Revenue miles for the second quarter of 1999 increased to 44.6 million miles from 42.6 million miles as a result a greater average number of tractors in the fleet. Revenue per revenue mile in the second quarter of 1999 improved by 2.2 percent to $1.40 per mile, up from $1.37 last year, continuing the trend reported in the first quarter. On July 19, 1999, RRT entered into an agency agreement in the Dallas, Texas, area which added approximately 100 company drivers and 50 owner operators which should positively affect its revenue for the balance of the year. The Company's total operating fleet, including owner-operators, at the end of the second quarter of 1999 was 2,402 tractors, up from 2,250 at the end of the second quarter of 1998, an increase of 7 percent. The number of Company owned tractors, at the end of the second quarter in 1999, grew by 6 percent, as compared with 1998. A discussion of the impact of the above and other factors on the results of operations in the three months and six months ended June 30, 1999, as compared to the comparable periods of 1998 follows.
1999 COMPARED TO 1998 - ------------------------------------------------------------------------------------------------------------------------------ Three Months Ended June 30 Six Months Ended June 30 ---------------------------------- % -------------------------------- % KEY OPERATING STATISTICS 1999 1998 Change 1999 1998 Change - ------------------------ ----- ----- ------ ------ ----- ------ Operating Revenues ($ millions) $72.2 $66.4 8.7% $138.5 $127.0 9.1% Average Number of Tractors 2,349 2,249 4.4% 2,330 2,225 4.7% Total Loads (000's) 96.5 91.1 5.9% 188.5 174.9 7.8% Revenue Miles (millions) 44.6 42.6 4.7% 85.8 82.6 3.9% Average Revenue per Revenue Mile * $1.40 $1.37 2.2% $1.39 $1.36 2.2% - ------------------------------------------------------------------------------------------------------------------------------ * Excluding brokerage revenue
9 10 OPERATING REVENUES Operating revenues for the three months and six months ended June 30, 1999, totaled $72.2 million and $138.5 million, respectively, as compared to $66.4 million and $127.0 million for the same periods in 1998, reflecting better freight availability than the prior year. All of the Company's five subsidiaries continued to grow in 1999. Revenue increased by $5.8 million, or 8.7 percent, in the three months, and $11.5 million, or 9.1 percent, in the six months ended June 30, 1999, over the comparable 1998 periods. The average number of Company owned tractors increased 10.0 percent from 1,205 to 1,326 in the six month period ended June 30, 1999, from the comparable period in 1998, while the average owner-operator tractor count decreased 1.6 percent from 1,020 to 1,004. Approximately 49.8 percent of the Company's revenue was generated by Company-operated equipment, and 36.1 percent by owner-operator equipment in the six months ended June 30, 1999. This compares to 50.8 percent and 37.3 percent, respectively, in the 1998 period. The remaining revenues were from freight brokered to other carriers ("brokered freight"). The Company experienced a 2.2 percent improvement in the average revenue per revenue mile in the first six months of 1999, as compared to 1998. This is generally the result of a slight tightening of capacity in the markets served by the Company. OPERATING EXPENSES The following table sets forth the percentage relationship of operating expenses to operating revenues for the three months and six months ended June 30.
Three Months Ended June 30 Six Months Ended June 30 -------------------------- ------------------------ 1999 1998 1999 1998 ----- ----- ---- ---- Operating revenues 100 % 100 % 100 % 100 % Operating expenses: Purchased transportation and equipment rents 46.8 45.0 46.3 44.9 Salaries, wages and benefits 25.2 23.8 25.4 23.8 Fuel and other operating expenses 18.0 18.0 17.8 18.2 Operating taxes and licenses 3.6 3.8 3.7 4.0 Insurance and claims 3.1 3.0 2.9 3.2 Depreciation 1.4 1.5 1.4 1.5 Other operating expenses 1.6 1.4 1.6 1.5 --- --- --- --- Total operating expenses 99.7% 96.5% 99.1% 97.1% ==== ==== ==== ====
Purchased transportation and equipment rents increased as a percentage of revenue due to the increased amount of brokered freight. Salaries, wages and benefits increased as a percentage of revenue because of the increases in driver pay at all of the trucking subsidiaries plus one time charges relating to severance agreements with two former executives that totaled approximately $550,000. The driver pay increases were in response to competitive marketplace for driver services. Fuel and other operating expenses are attributable to Company-operated equipment and these expenses remain relatively unchanged. Other operating expenses increased slightly due to increases in communications and bad debt provisions. All other operating expenses have remained relatively unchanged. In summary, driver turnover, higher driver wages, management changes and inefficient equipment utilization have adversely affected the Company's operating expenses for the first six months of 1999. 10 11 INTEREST EXPENSE Bank borrowings were higher in 1999 than 1998 while capitalized lease debt was lower. The less expensive bank debt and the reduction in the borrowing rate due to the amended bank agreement in 1999 caused interest expense to remain approximately the same in 1999 as it was in 1998. CONTINGENT LIABILITY SPECIAL CHARGE During the second quarter of 1999, the Company charged the income statement $2.2 million representing the amount of the Company's offer to settle a pending claim asserted by the Central States Southeast and Southwest Areas Pension Fund (the "Fund"). As of June 30, 1999, the Company had made interim payments to the Fund that total approximately $2.1 million. For further information, see Part II - Item 1 of this report. PROVISION FOR INCOME TAXES Due to the year-to-date loss in 1999, the Company did not record Federal tax expense for the year. The Federal tax expense recorded in the first quarter was credited to income in the second quarter. The tax assets created in 1999 have been fully reserved. LIQUIDITY AND CAPITAL RESOURCES The Company generated $69,000 of cash in the first six months of 1999, compared to $466,000 in 1998. As reflected in the accompanying Consolidated Statements of Cash Flows, $4.5 million of cash was used in operating activities, primarily by increased accounts receivable and cash used to purchase plates and permits for the Company's fleet, offset by depreciation. The cash flow from operations were not effected because income before depreciation and other noncash charges was offset by increased working capital requirements of approximately $6.5 million. The largest working capital need was incurred in accounts receivable of $5.6 million. Net cash of $4.1 million was generated by financing activities, primarily bank borrowings. Net cash of $428,000 was provided in financing activities, primarily from the net disposal of property and equipment. The Company's day-to-day financing is provided by borrowings under its bank credit facility. The credit facility, as amended on May 7, 1999, consists of a $2 million term loan and a $5 million capital expenditure loan, both with a maturity date of December 31, 2000 and a $28 million revolving line of credit, which expires January 1, 2001. Quarterly principal payments of $100,000 on the term loan are required. There is currently nothing outstanding under the capital expenditure loan. The line of credit includes provisions for the issuance of standby letters of credit which, as issued, reduce available borrowings under the line of credit. Borrowings under the line of credit are limited to amounts determined by a formula tied to the Company's eligible accounts receivable and inventories, as defined in the credit facility. Borrowings under the revolving line of credit totaled $14.8 million at June 30, 1999, and outstanding letters of credit totaled $6.9 million at that date. The combination of these two bank credits totaled $21.7 million, leaving $5.5 million of borrowing capacity available at June 30, 1999. The Company's May 7, 1999, amended bank agreement, resulted in changes to maturity dates, term loan principal, applicable interest rates and financial covenants. The maturity of the revolving line of credit was extended to January 1, 2001, from January 1, 2000. The term loan changes resulted in a principal capacity reduction from $5.0 million to $2.0 million and an extension on the maturity date from December 31, 1999, to December 31, 2000. The term loan principal capacity reduced the entire credit facility to $35.0 million, from $38.0 million. The new term loan agreement requires quarterly payments of $100,000 starting July 1, 1999, with the final installment due on December 31, 2000. The maturity date for a capital expenditures loan was also extended to December 31, 2000, from December 31, 1999. The interest rate margin on all credit lines was reduced to 175 basis points over LIBOR, from 250 basis points over LIBOR. In addition, changes were made to a number of the financial covenants in the agreement. As a result of the second quarter loss in 1999, the Company would not have been in compliance with all of the financial covenants contained in the May 7, 1999, amended bank agreement. The Company's bank agreement was amended again in August, 1999. The amended agreement, which became effective June 30, 1999, amended the financial covenants for June 1999, and future periods in a manner to accommodate the expenses related 11 12 to the contingent liability special charge and the severance arrangements with former management. This amendment also limited the availability to the Company's capital expenditure loan of $5,000,000 until the Company has meet a specified fixed charge ratio coverage for three consecutive months. The Company was in compliance with all its debt covenants, as amended, for the period ending June 30, 1999. The Company believes that cash generated from operations, and cash available to it under the bank credit facility will be sufficient to meet the Company's needs for the foreseeable future. YEAR 2000 The Company has assessed, and continues to assess, the impact of the Year 2000 Issue on its reporting systems and operations. The Year 2000 Issue exists because many computer systems and applications currently use two-digit date fields to designate a year. As the century date occurs, date sensitive systems will recognize the year 2000 as 1900 or not at all. This inability to recognize or properly treat the year 2000 may cause our systems to process critical financial and operational information incorrectly or may cause the system to discontinue functioning altogether. One of the more significant Year 2000 issues faced by the Company is from its fully integrated dispatch and equipment control systems, which were not Year 2000 compliant. The Company updated and worked with the vendors of any products it is using to install new models and/or modify all of its applications and computer systems and, in particular, its dispatch and equipment control system to insure that they will be Year 2000 compliant. All programs have been tested and problems have been resolved by June 30, 1999. The Company does not expect the costs associated with becoming Year 2000 compliant to be material. The Company has incurred cost of approximately $50,000 to date, and expects any future costs to be minimal. These costs are being charged to operations as incurred. Management has not developed any contingency plan regarding its dispatch and equipment control systems at this time, but will develop one, if deemed necessary. As part of the Company's comprehensive review, it is continuing to verify the Year 2000 readiness of third parties (vendors and customers) with whom the Company has material relationships. At present, the Company is not able to determine the effect on the Company's results of operations, liquidity, and financial condition in the event the Company's material vendors and customers are not Year 2000 compliant. The Company will continue to monitor the progress of its material vendors and customers and formulate a contingency plan when the Company believes a material vendor or customer will not be compliant. The estimated percentage of completion as of June 30, 1999, the date on which the Company believes it had completed with its Year 2000 compliance efforts, and the expenses related to the Company's Year 2000 compliance efforts are based on management's best estimates. Actual results could materially differ from those anticipated. Specific factors that might cause such material differences include, but are not limited to, the availability of personnel trained in this area and the ability to locate and correct all relevant computer codes. In addition, there can be no assurances that the systems or products of third parties on which the Company relies will be timely converted or that a failure by a third party, or a conversion that is incompatible with the Company's systems, would not have a material adverse effect on the Company. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's earnings are impacted by financial risk related to volatility in interest rates related to variable debt instruments. These debt instruments are non-trading in nature and are used to fund the Company's day-to-day operations. Based upon the principal amounts outstanding at June 30, 1999, for those variable rate debt instruments, a market change of 100 basis-points in interest rates would correspond to an approximately $150,000 impact in interest expense for a one-year period. This sensitivity analysis does not account for any change in the borrowings outstanding, which may be reduced through payments or increased through additional borrowings, and does not consider the Company's ability to fix the interest rate on one of the three variable rate debt instruments. The Company has no material future earnings impact or cash flow expense from changes in interest rates related to its financing of operating equipment as all of the Company's equipment financing has fixed rates. 12 13 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. On June 13, 1997, the Company received notice from the Central States Southeast and Southwest Areas Pension Fund (the "Fund") of a claim pursuant to the Employee Retirement Income Security Act of 1974, as amended by the Multi-employer Pension Plan Amendments Act of 1980 ("MPPAA"). MPPAA provides that, if an employer withdraws from participation in a multi-employer pension plan, such as the Fund, the employer and members of the employer's "controlled group" of businesses are jointly and severally liable for a portion of the plan's under funding. The claim is based on the withdrawal of R-W Service System, Inc. ("RW") from the Fund in 1992. The Company's records indicate that RW was an indirect subsidiary of the Company's predecessor, Circle Express, Inc., from March 1985 through April 1988, when it and certain other subsidiaries were sold. The Fund currently claims that RW's withdrawal liability is approximately $3.7 million plus accrued interest in the amount of approximately $1.7 million. The Company filed a formal request for review of the claim as provided by the MPPAA, the Fund rejected that request and the claim is now the subject of binding arbitration. The Company is obligated to make interim payments to the Fund until the issue of liability is resolved. The interim payment obligation is currently approximately $88,500 per month. Through June 30, 1999, the Company had made payments to the Fund that total approximately $2.1 million. Through the first quarter of 1999, the parties had widely divergent settlement positions. The claim was the subject of a binding arbitration proceeding and it was not possible to estimate a potential loss with respect to the claim. Therefore, the Company had not recorded a loss contingency for this claim. In August, the parties engaged in meaningful settlement negotiations. As part of the negotiations, the Company offered to pay the Fund $2.2 million in full satisfaction of the claim. Accordingly, the Company established a special charge of $2.2 million with respect to this claim in the second quarter of 1999. At this point, neither the Fund nor the Company have agreed to any settlement. There can be no assurance that the ultimate resolution of this matter will not have a material adverse effect on the Company's liquidity, results of operations or financial condition. The Company's subsidiary, RDS, is a defendant in an action brought on March 20, 1997, in the 327th District Court, El Paso, Texas, by a former employee. The plaintiff alleged that he was injured as a result of the negligence and gross negligence of RDS and received discriminatory treatment in violation of the Texas Health and Safety Code. On March 13, 1998, a default judgment was entered against RDS in the approximate amount of $1.0 million, representing damages for medical expenses, loss of wage earning capacity, physical pain and mental anguish, physical impairment, disfigurement and punitive damages. RDS filed an appeal to the 8th Circuit Court of Appeals in El Paso, Texas. In its appeal, RDS asserted it was never properly served in the action and that there was insufficient basis to support an award of punitive damages. RDS has notified its workers' compensation carrier of the award. On July 29, 1999, the 8th Circuit Court of Appeals in El Paso issued a favorable ruling for RDS, reversing the default judgment and remanding the case for trial. Management believes that this action should not have a material adverse effect on the Company's liquidity, results of operations or financial condition. There are no other material pending legal proceedings to which the Company or any of its subsidiaries is a party or of which any of their property is the subject, other than routine litigation incidental to its business, primarily involving claims for personal injury and property damage incurred in the transportation of freight. The Company maintains insurance which covers liability resulting from such transportation related claims in amounts customary for the industry and which management believes to be adequate. ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None 13 14 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The annual meeting of shareholders of the Company was held on May 19, 1999. The following individuals were elected as directors for the ensuing year or until their successors are duly elected and qualified with the following votes cast for or against. There were no abstentions or broker non-votes.
For Against --- ------- Vincent A. Carrino 12,884,383 4,989 John P. Delavan 12,884,409 4,963 Robert B. Fagenson 12,883,243 6,129 Ned N. Fleming III 12,884,411 4,961 Eric C. Jackson 12,884,411 4,961 Edwin H. Morgens 12,884,411 4,961 Thomas J. Noonan, Jr. 12,883,267 6,105 Gerald Anthony Ryan 12,883,243 6,129 Philip Scaturro 12,884,411 4,961
As previously announced, on June 18th, John P. Delavan resigned from the Company as President, CEO and a board member and was replaced by Eric C. Jackson as President and CEO. The shareholders of the Company also ratified the selection of Arthur Andersen LLP as auditors for 1998 with 12,879,805 votes in favor, 4,918 against, and 4,649 abstentions. There were no broker non-votes. The shareholders of the Company also ratified the resolution to restore voting rights to "control shares" of the Brookhaven Group. A total of 7,531,851 shares were considered "interested shares" and not eligible to vote on this matter. The vote by eligible shareholders was 3,713,851 votes in favor, 127,443 against and 1,712,751 abstentions. ITEM 5. OTHER INFORMATION On August 6, 1999, Roger T. Burbage resigned as Executive Vice-President and Chief Financial Officer of the Company. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits Exhibit 10.1 - Fifth Amendment to the Fourth Amended and Restated Loan Agreement dated as of May 7, 1999. Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K None 14 15 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. INTRENET, INC. ----------------------------- (Registrant) /S/ ERIC C. JACKSON ----------------------------- Eric C. Jackson, President and Chief Executive Officer August 20, 1999 /S/ RUSSELL L. DEEG ---------------- ----------------------------- Russell L. Deeg, Vice-President and Controller (Principal Financial and Accounting Officer) 15 EX-10.1 2 EXHIBIT 10.1 1 Exhibit 10.1 FIFTH AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AGREEMENT THIS FIFTH AMENDMENT (this "Amendment") to the Fourth Amended and Restated Loan Agreement is entered into as of the 5th day of May, 1999, by and between The Huntington National Bank (the "Bank") as lender, and Intrenet, Inc. (the "Borrower"), and its wholly owned subsidiaries Advanced Distribution System, Inc., Eck Miller Transportation Corporation, INET Logistics, Inc., Mid-Western Transport, Inc., Roadrunner Enterprises, Inc., Roadrunner Trucking, Inc., Roadrunner Distribution Services, Inc. and Roadrunner International Services, Inc. (collectively the "Subsidiaries") as borrowers. The Borrower and the Subsidiaries are herein collectively referred to as the "Companies" and separately as a "Company"). RECITALS: A. On or about January 15, 1996, the Companies (with the exception of INET Logistics, Inc.) and the Bank executed a certain Fourth Amended and Restated Loan Agreement that was amended by a certain (i) First Amendment to Fourth Amended and Restated Loan Agreement dated as of March 31, 1996, (ii) Second Amendment to Fourth Amended and Restated Loan Agreement (pursuant to which INET Logistics became obligated under the terms of the 1996 Loan Agreement) dated as of March 7, 1997, (iii) Third Amendment to Fourth Amended and Restated Loan Agreement dated as of March 31, 1998, and (iv) Fourth Amendment to Fourth Amended and Restated Loan Agreement dated as of February 4, 1999, (collectively, the "1996 Loan Agreement"), setting forth the terms of certain extensions of credit to the Companies; and B. In connection with the 1996 Loan Agreement and predecessor documents thereto, the Companies executed and delivered to the Bank certain other loan documents, promissory notes, amendments to open-end mortgages, assignment of rents and security agreements, consents, assignments, security agreements, agreements, instruments and financing statements in connection with the indebtedness referred to in the 1996 Loan Agreement (all of the foregoing, together with the 1996 Loan Agreement, are hereinafter collectively referred to as the "1996 Loan Documents") (the 1996 Loan Documents together with the 1988 Loan Documents, the 1989 Loan Documents, the 1991 Loan Documents and the 1993 Loan Documents (as those terms are defined in the 1996 Loan Agreement) are hereinafter collectively referred to as the "Loan Documents"); and C. The Companies have requested that the Bank amend and modify certain terms and covenants in the Loan Agreement to reduce the pricing, extend the maturity dates and modify the performance pricing of the extensions of credit subject to the 1996 Loan Agreement, to modify certain financial covenants and to increase the amount of term indebtedness, and the Bank is willing to do so upon the terms and conditions contained herein. 2 NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises contained herein, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto for themselves and their successors and assigns do hereby agree, represent and warrant as follows: 1. Definitions. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the 1996 Loan Agreement. 2. Section 1, "Amount of Loan," of the 1996 Loan Agreement is hereby amended to recite in its entirety as follows: SECTION 1. AMOUNT OF LOAN. The Bank agrees to extend credit to the Companies up to the aggregate sum of $35,000,000.00 in original principal amount (herein collectively referred to as the "Loan"), subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties contained herein. The Loan shall be comprised of the credit facilities described in paragraphs 1.1, 1.2, 1.2.1 and 1.3 below. 3. Section 1.1, "Revolving Loan," of the 1996 Loan Agreement is hereby amended to recite in its entirety as follows: 1.1 Revolving Loan. The Bank agrees to extend credit to the Companies pursuant to a revolving credit facility up to the maximum principal amount of $28,000,000.00 (herein referred to as the "Revolving Loan"), subject to paragraphs 1.3 and 1.4 below and to the terms and conditions of the Agreement; provided, however, that the outstanding principal balance of the Revolving Loan, plus the aggregate outstanding stated amounts of the Letters of Credit (as defined below) shall never exceed $28,000,000.00. The outstanding principal of the Revolving Loan may be increased and decreased an unlimited number of times prior to January 1, 2001 (the "Revolving Loan Termination Date"). The Companies' right to obtain advances pursuant to the Revolving Loan shall terminate on, and the unpaid principal balance plus all accrued interest on the Revolving Loan shall be due and payable on, the Revolving Loan Termination Date; provided, however, that the Bank shall have no obligation to advance or re-advance any sums pursuant to the Revolving Loan at any time when there exists any set of facts or circumstances that, by itself, upon the giving of notice, the lapse of time, or any one or more of the foregoing, would constitute an Event of Default under this Agreement. 4. Section 1.2 "Term Loan," of the 1996 Loan Agreement is hereby amended to recite in its entirety as follows: 3 1.2 Term Loan. The Bank agrees to extend credit to the Companies pursuant to a term facility in the principal amount of $2,000,000.00 (herein referred to as the "Term Loan"), subject to paragraph 1.4 below and to the terms and conditions of this Agreement. The principal balance of the Term Loan shall be due and payable in six consecutive quarterly installments of $100,000.00 each, beginning on July 1, 1999, and continuing on each October 1, January 1, April 1 and July 1 thereafter through and including October 1, 2000, and with the final installment due on December 31, 2000 (the "Term Loan Termination Date"). 5. Section 1.2.3, "Terms of Capex Loan," of the 1996 Loan Agreement is hereby amended to recite in its entirety as follows: 1.2.3 Terms of Capex Loan. All principal, interest, and other fees outstanding on the Capex Loan shall be due and payable no later than the Capex Loan Maturity Date. "Capex Loan Maturity Date" shall mean with respect to any advances under the Capex Loan, December 31, 2000. The Borrower may elect in the same manner as Section 2.4 hereof to have interest accrue on the Capex Loan at (a) Daily LIBOR plus the Daily LIBOR Margin or (b) the Prime Commercial Rate. 6. The definition of "Daily LIBOR Margin" in Section 2.3, "Daily LIBOR," of the 1996 Loan Agreement is hereby amended to recite as follows: "Daily LIBOR Margin" shall mean 175 basis points (1.75%), subject to the provisions of Section 2.11 set forth below. In addition, Section 2.3 is hereby amended to provide that the Companies may obtain Daily LIBOR Advances under the Term Loan at a rate of interest equal to Daily LIBOR, plus the applicable Daily LIBOR Margin. The remainder of Section 2.3, "Daily LIBOR," shall remain as originally written. 7. Section 2.11, "Reduction of Applicable Margins," of the 1996 Loan Agreement is hereby amended to recite in its entirety as follows: 2.11. Reduction of Applicable Margins. In respect of the Revolving Loan and the Capex Loan only, the Prime Margin, the Eurodollar Margin and the Daily LIBOR Margin shall each be reduced by 25 basis points (0.25%) effective on the first day of the month (no sooner than March 31, 2000) following the Bank's receipt and acceptance of a certificate signed by the president or 4 chief financial officer of the Borrower and delivered pursuant to Section 11 (b) of this Agreement, certifying (i) the compliance of the Companies with all of the terms of this Agreement for the fiscal year ending December 31, 1999, and setting forth the calculation of the financial covenants contained in Section 10 of this Agreement and (ii) the Companies' consolidated Fixed Charge Coverage Ratio for the fiscal year ending December 31, 1999, is not less than 1.05 to 1.00; provided, however, that no such reduction shall be made if any set of facts or circumstances exists that, by itself, upon the giving of notice, the lapse of time, or any one or more of the foregoing, would constitute an Event of Default hereunder. 8. Section 4, "Prepayment," of the 1996 Loan Agreement is hereby amended to recite in its entirety as follows: SECTION 4. PREPAYMENT. Subject to the terms and conditions of this Agreement, the Companies shall have the right to prepay at any time and from time to time before maturity any amount or amounts due to the Bank pursuant to this Agreement or to any notes or agreements executed pursuant hereto or to seek cancellation of the Letters of Credit; provided, that if the Companies prepay the Revolving Loan, the Term Loan and the Capex Loan in full prior to the Revolving Loan Termination Date, the Companies shall jointly and severally pay to the Bank a prepayment fee equal to $200,000.00; provided, however, that no such prepayment fee shall be due if the Revolving Loan, the Term Loan and the Capex Loan are prepaid in full solely as a result of the refinancing or restructuring of such obligations by the (i) Bank or by (ii) a lender group arranged by the Bank or an affiliate thereof and for which the Bank or its affiliates serve as Syndication Agent and Administrative Agent. If the Bank, in its sole and absolute discretion, determines not to renew or extend the maturity of the Revolving Loan, then the Term Loan and the Capex Loan shall be due and payable at the maturity of the Revolving Loan. 9. Section 10.12, "Book Net Worth," of the 1996 Loan Agreement is hereby amended to recite in its entirety as follows: 10.12 Book Net Worth. The Companies shall achieve a Book Net Worth of not less than: the sum of (i) $23,500,000.00 plus (ii) the net cash proceeds resulting from the issuance by the Borrower on or after January 1, 1999, of any capital stock of any nature, whether voting or non-voting, common, preferred or otherwise ("Capital Stock") as of June 30, 1999, and the sum of (i) $25,000,000.00, plus (ii) the net cash proceeds resulting from the issuance by the Borrower on or after January 1, 1999, of any Capital Stock as of December 31, 1999, and continuing at all times thereafter. 5 10. The first paragraph of Section 10.26, "Fixed Charge Coverage Ratio," of the 1996 Loan Agreement is hereby amended to recite as follows: The Companies, on a consolidated basis, shall maintain at all times specified below a ratio of (a) EBITDA plus Historical Operating Lease Payments to (b) Fixed Charges plus Prospective Operating Lease Payments (the "Fixed Charge Coverage Ratio") of not less than (i) 1.00 to 1.00 for the period beginning July 1, 1998, and continuing, through and including December 31, 1999, and (ii) 1.05 to 1.00 for the period beginning January 1, 2000, and continuing at all times thereafter. If the Companies or their auditors make any adjustment in EBITDA, the Companies shall immediately (i) provide notice of such adjustment to the Bank, (ii) reflect such adjustment in the calculation of the Fixed Charge Coverage Ratio, and (iii) provide financial statements to the Bank reflecting such adjustments for all periods to which the adjustments relate. The remainder of Section 10.26, "Fixed Charge Coverage Ratio," shall remain as originally written. 11. Conditions of Effectiveness. This Amendment shall become effective as of April 30, 1999, upon satisfaction of all of the following conditions precedent: (a) The Bank shall have received two duly executed copies of this Amendment and such other certificates, instruments, documents, agreements, and opinions of counsel as may be required by the Bank, each of which shall be in form and substance satisfactory to the Bank and its counsel; (b) The representations contained in paragraph 12 below shall be true and accurate. 12. Representations. Each of the Companies represents and warrants that after giving effect to this Amendment (a) each and every one of the representations and warranties made by or on behalf of each of the Companies in the 1996 Loan Agreement or the Loan Documents is true and correct in all respects on and as of the date hereof, except to the extent that any of such representations and warranties related, by the expressed terms thereof, solely to a date prior hereto; (b) each of the Companies has duly and properly performed, complied with and observed each of its covenants, agreements and obligations contained in the 1996 Loan Agreement and the Loan Documents; and (c) no event has occurred or is continuing, and no condition exists which would constitute an Event of Default. 13. Amendment to 1996 Loan Agreement. (a) Upon the effectiveness of this Amendment, each reference in the 1996 Loan Agreement to "Fourth Amended and Restated Loan Agreement," "Loan and Security Agreement," "Loan Agreement," "Agreement," the prefix "herein," "hereof," or words of similar import, and each reference in the Loan Documents to the 1996 Loan Agreement, shall mean and be a reference to the 1996 Loan Agreement as amended hereby. (b) Except as modified 6 herein, all of the representations, warranties, terms, covenants and conditions of the 1996 Loan Agreement, the Loan Documents and all other agreements executed in connection therewith shall remain as written originally and in full force and effect in accordance with their respective terms, and nothing herein shall affect, modify, limit or impair any of the rights and powers which the Bank may have thereunder. The amendment set forth herein shall be limited precisely as provided for herein, and shall not be deemed to be a waiver of, amendment of, consent to or modification of any of the Bank's rights under or of any other term or provisions of the 1996 Loan Agreement, any Loan Document, or other agreement executed in connection therewith, or of any term or provision of any other instrument referred to therein or herein or of any transaction or future action on the part of the Companies which would require the consent of the Bank, including, without limitation, waivers of Events of Default which may exist after giving effect hereto. Each of the Companies ratifies and confirms each term, provision, condition and covenant set forth in the 1996 Loan Agreement and the Loan Documents and acknowledges that the agreement set forth therein continue to be legal, valid and binding agreements, and enforceable in accordance with their respective terms. 14. Authority. Each of the Companies hereby represents and warrants to the Bank that as to such Company (a) such Company has legal power and authority to execute and deliver the within Amendment; (b) the officer executing the within Amendment on behalf of such Company has been duly authorized to execute and deliver the same and bind such Company with respect to the provisions provided for herein; (c) the execution and delivery hereof by such Company and the performance and observance by such Company of the provisions hereof do not violate or conflict with the articles of incorporation, regulations or by-laws of such Company or any law applicable to such Company or result in the breach of any provision of or constitute a default under any agreement, instrument or document binding upon or enforceable against such Company; and (d) this Amendment constitutes a valid and legally binding obligation upon such Company in every respect. 15. Counterparts. This Amendment may be executed in two or more counterparts, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute one and the same document. Separate counterparts may be executed with the same effect as if all parties had executed the same counterparts. 16. Governing Law. This Amendment shall be governed by and construed in accordance with the law of the State of Ohio. IN WITNESS WHEREOF, each of the Companies and the Bank have hereunto set their hands as of the date first set forth above. 7 THE BORROWER: INTRENET, INC. By: /s/ Roger T. Burbage ------------------------------- Its: Executive Vice President and Chief Financial Officer THE SUBSIDIARIES: ADVANCED DISTRIBUTION SYSTEM, INC. By: /s/ Roger T. Burbage ------------------------------- Its: Vice President ECK MILLER TRANSPORTATION CORPORATION By: /s/ Roger T. Burbage ------------------------------- Its: Vice President INET LOGISTICS, INC. By: /s/ Roger T. Burbage ------------------------------- Its: Vice President MID-WESTERN TRANSPORT, INC. By: /s/ Roger T. Burbage ------------------------------- Its: Vice President ROADRUNNER ENTERPRISES, INC. By: /s/ Roger T. Burbage ------------------------------- Its: Vice President 8 ROADRUNNER TRUCKING, INC. By: /s/ Roger T. Burbage ------------------------------- Its: Vice President ROADRUNNER DISTRIBUTION SERVICES, INC. By: /s/ Roger T. Burbage ------------------------------- Its: Vice President ROADRUNNER INTERNATIONAL SERVICES, INC. By: /s/ Roger T. Burbage ------------------------------- Its: Vice President THE BANK: THE HUNTINGTON NATIONAL BANK By: /s/ Leonard Amoroso ------------------------------- Its: Vice President EX-27 3 EXHIBIT 27
5 0000778161 INTRENET, INC. 1,000 U.S. DOLLARS 6-MOS DEC-31-1999 JAN-01-1999 JUN-30-1999 1 340 0 40,442 1,781 0 45,103 26,422 0 79,681 29,011 25,924 0 0 16,881 5,065 79,681 0 138,486 0 137,186 2,417 0 1,241 (2,358) 92 (2,450) 0 0 0 (2,450) (0.20) (0.19)
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