-----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, APmbBpe3sFFtPJmy4wv+LF5MoZZVAsqTtfvaLOjTVxjZXxsTToSL371JWO6rGSsR rztwjOHOXQhseWWfloBShw== 0000790372-98-000003.txt : 19980402 0000790372-98-000003.hdr.sgml : 19980402 ACCESSION NUMBER: 0000790372-98-000003 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980331 DATE AS OF CHANGE: 19980401 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MS CARRIERS INC CENTRAL INDEX KEY: 0000790372 STANDARD INDUSTRIAL CLASSIFICATION: 4213 IRS NUMBER: 621014070 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-14781 FILM NUMBER: 98584502 BUSINESS ADDRESS: STREET 1: 3171 DIRECTORS ROW CITY: MEMPHIS STATE: TN ZIP: 38116 BUSINESS PHONE: 9013322500 MAIL ADDRESS: STREET 1: 3171 DIRECTORS ROW CITY: MEMPHIS STATE: TN ZIP: 38116 10-K 1 M.S. CARRIERS, INC.'S 10-K FOR 1997 M.S. Carriers, Inc. 3171 Directors Row Memphis, TN 38131 March 28, 1997 Securities and Exchange Commission Washington, D.C. 20549 Gentlemen: Pursuant to the requirements of the Securities Exchange Act of 1934, we are transmitting herewith the attached Form 10-K. Sincerely, s/ M.J. Barrow M.J. Barrow, Senior Vice President United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-K [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1997 Commission file number 0-14781 M.S. Carriers, Inc. (Exact name of registrant as specified in its charter) Tennessee 62-1014070 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 3171 Directors Row, Memphis, TN 38131 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (901) 332-2500 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01 Par Value Nasdaq National Market 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 periods that the registrant was required to filed such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ___X___ No _______ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the registrant's $.01 par value common stock held by non-affiliates of the registrant as of March 6, 1998 was $263,175,311 (based on the closing sale price of $29.50 per share on that date, as reported by NASDAQ). As of March 6, 1998, 12,251,101 shares of the registrant's common stock were outstanding. Documents Incorporated by Reference Materials from the Registrant's Proxy Statement relating to the 1998 Annual Meeting of Shareholders to be held on May 1, 1998 have been incorporated by reference into Part III, Items 11, 12 and 13. 1 PART I ITEM 1. BUSINESS General - - ------- M.S. Carriers, Inc. (with its subsidiaries, the "Company" or "M.S. Carriers") is a transportation company primarily engaged in the hauling of truckload shipments of general commodities throughout the United States and the provinces of Quebec and Ontario in Canada. M.S. Carriers is a Tennessee corporation headquartered in Memphis, Tennessee. The Company's principal executive's offices are located at 3171 Directors Row, Memphis, Tennessee 38131, and its telephone number is (901) 332-2500. M.S. Carriers has both common and contract authority to transport any type of freight (except certain types of explosives, household goods and commodities in bulk) from any point in the continental United States to any other point in any state over any route selected by the Company. The Company has authority in Canada granted by the Quebec Transport Commission and the Ontario Highway Transport Board to haul general commodities from points in the United States to points in Quebec and Ontario and from points in Quebec and Ontario into the United States. The Company also provides interline service to and from Mexico. The Company's primary line-haul traffic flows are between the Middle South and the Southwest, Midwest, Central States, Southeast and Northeast. In addition, the Company operates regional networks which serve the West, Southeast, Southwest, Middle South, Central States and Northeast. The average length of a trip (one-way) was approximately 633 miles in 1997 and 534 miles in 1996. The principal types of freight transported are packages, retail goods, nonperishable foodstuffs, paper and paper products, household appliances, furniture and packaged petroleum products. Business Strategy - - ----------------- M.S. Carriers has targeted the service-sensitive segment of the transportation market rather than that segment which uses price as its primary consideration. The Company has chosen to provide premium services and charge compensating rates rather than to compete solely on the basis of price. The principal elements of the Company's premium service are on time deliveries, dependable late-model equipment, fully integrated computer systems to monitor shipment status and variations from schedules, on-board communications systems, multiple and appointment pickups and deliveries, assistance in loading and unloading, the availability of extra trailers which can be placed for the convenience of customers and sufficient equipment to respond promptly to customers' varying requirements. Operations - - ---------- The Company's operations are designed to maximize efficiency while maintaining the emphasis placed on providing premium service to customers. Through the use of the Company's information and satellite tracking systems, the location of all shipments and equipment is continuously monitored to coordinate routes and increase equipment utilization. The Company's usual hauling method requires the unit carrying the shipment to proceed directly from origin to destination with no delay enroute occasioned by a change of drivers, relays or circuitous routing. The Company's customer service department maintains constant customer 2 contact regarding overall service requirements and specific freight movements and also attempts to produce backhauls for each unit. Because the average trip has been approximately 633 miles, most of the Company's shipments are hauled by one driver rather than two. The relatively short trips ordinarily run by the Company make this method of operation preferable to team operations. Each of the Company's over-the-road tractors is equipped with a sleeper cab so that the driver can comply with the Department of Transportation's hours of service guidelines. Marketing - - --------- The Company's individualized service requires a strong commitment to marketing. The Company's marketing efforts concentrate on attracting customers that ship multiple loads from numerous locations that complement the Company's existing traffic flows. As shipping patterns of existing customers expand or change, the Company attempts to obtain additional customers to complement the new traffic flows. Thus, the effort to attract new customers varies from time to time depending upon growth or changes in the shipping patterns of existing customers. The Company's major revenue sources are the medium to long line-haul and the regional short-haul segments of the dry van truckload market. In these markets, the Company focuses on customers who value the broad geographic coverage, premium services and flexibility available from a larger carrier. These customers generally prefer to have their freight handled by a few carriers with whom they can establish long-term relationships. The Company also provides dedicated fleet services and logistics services. These services supplement the Company's strengths in its traditional markets and position the Company to meet the anticipated needs of its customers. The Company had revenues of $38.8 million in 1997 and $33.2 million in 1996 from freight shipments having either a point of origin or a point of destination in Mexico. These shipments represented approximately 9.3% and 9.8%, respectively, of total revenues for 1997 and 1996. The largest 25, 10 and 5 customers accounted for approximately 57%, 43% and 33%, respectively, of the Company's revenues during 1997. Most of these customers are large, publicly-held companies. One customer, Sears, accounted for approximately 14% of the Company's revenues during 1997 and 17% in 1996. No other customer accounted for more than 10% of the Company's revenues during 1997 or 1996. Drivers and Employees - - --------------------- The Company recognizes the importance of maintaining a professional driver work force. The Company has established several programs to increase driver loyalty and to give drivers a stake in the Company. The drivers are compensated on the basis of miles driven and other services such as loading and unloading and number of deliveries. Base pay for miles driven increases with a driver's length of employment with the Company. The Company maintains a defined contribution plan under Section 401(k) of the Internal Revenue Code for drivers and all other employees. The Company matches 50% of the employee's contribution, but limited to a maximum of 3% of the employee's compensation. The Company also grants to each driver and other employees, after the completion of six months of service, an option to purchase 3 500 shares of the Company's Common Stock at the market price on the date of grant. The option is exercisable five years from the date of grant provided the driver or employee continues employment with the Company. Drivers are selected in accordance with specific Company guidelines relating primarily to safety records, driving experience and personal evaluations. Once selected, a driver is trained in all phases of Company policies and operations as well as safety techniques and fuel efficient operation of equipment. In addition, all new drivers must pass a road test prior to assignment to a vehicle. Recognizing the importance of driver contact while on the road for extended periods, the Company maintains an electronic mailbox system which allows the drivers to transmit and receive messages 24 hours a day, equips each of its tractors with a mobile two-way satellite communication system and maintains regular telephonic contact between dispatchers and drivers. The Company also recognizes that owner-operators provide the Company with another source of drivers to support its operations. Owner-operators are independent contractors who supply their own tractors and drivers, and are responsible for their operating expenses in return for a negotiated fee based upon number of miles driven and accessorial services provided. While the Company's primary benefit from owner-operators is the acquisition of the services of a qualified driver, an additional benefit is the Company requires less capital for growth as owner-operators provide their own tractors. The Company intends to continue its emphasis on recruiting and retaining owner-operators. Since competition for qualified drivers is intense, the Company emphasizes the importance of attracting and retaining qualified drivers. The Company employs driver recruiters and owner-operator recruiters. The driver compensation programs, together with the Company's late-model equipment, relatively short trips and get-home policies provide important incentives to attract and retain qualified drivers. In addition, the Company operates a professional driving academy to train new drivers and employs full-time recruiters in connection therewith. Despite these incentives and programs, the Company experiences difficulty from time to time in attracting and retaining qualified drivers. At December 31, 1997, the Company employed 3,112 persons, of whom 2,344 were drivers, 214 were mechanics and other equipment maintenance personnel, and 554 were support personnel including management and administration. The Company also leased 771 tractors with qualified drivers from owner-operators. None of the Company's employees are represented by a collective bargaining unit, and management considers the Company's relationship with its employees to be excellent. Acquisitions - - ------------ The trucking industry has historically been a fragmented industry which management of the Company believes is starting to consolidate. In 1997, the Company adopted a strategy of seeking to acquire small-to-medium trucking companies throughout the United States. The Company believes any acquisition should be accretive to earnings within six months and should place the Company in new markets for customers and drivers or provide additional capacity for other new business opportunities. In September 1997, the Company completed its first acquisition, Hi-Way Express. This acquisition added 262 tractors to the Company's fleet. In March 4 1998, the Company concluded the purchase of certain assets relating to the U.S. operations of Challenger Motor Freight. At closing, the Company added 195 tractors and 481 trailers to its fleet. Competition - - ----------- The entire transportation industry, including the trucking industry, is highly competitive. The Company competes primarily with other truckload carriers. Competition for the freight transported by the Company is based, in the long- term, primarily on service and efficiency and, to a lesser degree, on freight rates. However, in recent years the Company has experienced an increased focus on freight rates in certain of the markets served by the Company. Several other truckload carriers have substantially greater financial resources, own more equipment or carry a larger volume of freight than the Company. Regulation - - ---------- The Company is a motor carrier regulated by the United States Department of Transportation. Additionally, such matters as weight and dimensions of equipment are subject to federal, state and international regulations. The Company believes that it is in substantial compliance with all licensing and regulatory requirements in each jurisdiction in which it operates. Seasonality - - ----------- In the trucking industry generally, results of operations tend to show a seasonal pattern as some customers reduce shipments during and after the winter holiday season and during the summer months due to temporary plant closings for vacations. Revenues can also be affected by bad weather and holidays, since revenue is directly related to available working days. Furthermore, operating expenses historically have been higher in the winter months due primarily to decreased fuel efficiency and increased maintenance costs of revenue equipment in cold weather. Fuel - - ---- Shortages of fuel or increases in fuel prices could have a materially adverse effect on the operations and profitability of the Company. From time to time, the Company has implemented a fuel surcharge program in response to sudden increases in the cost of fuel. However, there is no assurance that such fuel surcharges could be used to offset future increases in fuel prices. During 1997, fuel prices steadily declined, and have remained at levels close to historical norms. The Company maintains fuel storage tanks at certain of its terminals. Leakage or damage to these tanks could subject the Company to environmental clean-up costs. The Company believes it is in substantial compliance with all environmental laws and regulations. ITEM 2. PROPERTIES Office and Terminal Facilities - - ------------------------------ The Company's executive offices and principal terminal are located in Memphis, Tennessee on 3-acre and 48-acre tracts of land, respectively, both of which are owned by the Company. The executive offices have 57,000 square feet of office 5 space. The principal terminal consists of 52,000 square feet of office space and 41,000 square feet of maintenance facilities. The Company owns office and maintenance facilities of 34,500 square feet in Columbus, Ohio, 16,500 square feet in Laredo, Texas, 16,500 square feet in Martinsburg, West Virginia and 45,500 square feet in Atlanta, Georgia. Additionally, the Company owns a 3,000 square foot office and terminal on a 4- acre tract of land in Tupelo, Mississippi. The Company leases several small offices and/or trailer parking yards throughout the country. Revenue Equipment - - ----------------- The Company has a policy of purchasing standardized tractors and trailers manufactured to the Company's specifications. At December 31, 1997, the Company owned and operated 2,370 Company-owned tractors and leased 771 tractors owned by owner-operators. The Company owns 8,981 van trailers; all trailers are 102 inches wide with a minimum of 109.5 inches of inside height. Most of the tractors are manufactured by Freightliner and most of the trailers are manufactured by Lufkin or Great Dane. Standardization enables the Company to simplify driver training, control the cost of spare parts inventory and enhance its preventive maintenance program. The Company adheres to a comprehensive maintenance program, based on the amount of use of the tractor, designed to minimize equipment down-time and enhance the resale value of all of its equipment. The Company constantly monitors the fuel efficiency of its power equipment. The following table shows the type and age of equipment operated by the Company at December 31, 1997:
Model Year Tractors Trailers -------------------------------------------- 1998 602 2,192 1997 896 2,147 1996 515 1,189 1995 339 1,101 1994 1 998 1993 1 855 1992 11 217 1991 0 98 1990 3 107 1989 0 56 1988 1 7 1987 1 14 --------------------------- 2,370 8,981 --------------------------- ---------------------------
ITEM 3. LEGAL PROCEEDINGS The Company is a party to routine litigation incidental to its business, primarily involving claims for personal injuries and property damage incurred in the transportation of freight. The Company believes adverse results in one or more of these cases would not have a material adverse effect on its financial position or its results of operations. The Company self-insures for liability of $1,500,000 for the largest occurrence per policy year, $1,250,000 for the second largest occurrence per policy year, and $1,000,000 for each other 6 occurrence involving bodily injury and property damage. The Company maintains insurance which covers liability in excess of the self-insured amounts at coverage levels that management considers adequate. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the fourth quarter of 1997. 7 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS Price Range of Common Stock - - --------------------------- The Company's Common Stock is traded in the Nasdaq National Market ("Nasdaq") under the symbol "MSCA". The following table sets forth, for the calendar periods indicated, the high and low sales prices for the Company's Common Stock as reported by Nasdaq for the periods indicated.
High Low ----------------- 1997 1st Quarter 17 3/4 15 3/4 2nd Quarter 25 1/8 16 1/2 3rd Quarter 26 3/4 21 7/8 4th Quarter 27 15/16 20 1996 1st Quarter 20 15 1/4 2nd Quarter 21 1/4 17 3/4 3rd Quarter 22 1/8 19 4th Quarter 19 3/4 15 1/2
On March 6, 1998, the last reported sales price of the Company's common stock was $29.50 per share. At that date, the number of shareholders of record was 216. The Company estimates that there are approximately 3,000 beneficial owners of the Company's outstanding shares of Common Stock. Dividend Policy - - --------------- The Company has never paid a cash dividend on its Common Stock. It is the current intention of the Company's Board of Directors to continue to retain earnings to finance the growth of the Company's business rather than to pay dividends. Future payment of cash dividends will depend upon the financial condition, results of operations and capital commitments of the Company as well as other factors deemed relevant by the Board of Directors. 8 ITEM 6. SELECTED FINANCIAL DATA The following selected financial data should be read in conjunction with the financial statements and notes thereto appearing elsewhere herein.
Year ended December 31 1997 1996 1995 1994 1993 (In thousands, except per share amounts) -------------------------------------------------------- Statement of income data: Operating revenues $415,933 $340,236 $333,070 $292,883 $224,716 Operating expenses: Salaries, wages and benefits 133,517 127,237 126,176 111,493 84,820 Operations and maintenance 71,381 66,224 66,961 64,498 60,880 Taxes and licenses 10,708 8,973 10,024 8,746 6,901 Insurance and claims 18,462 18,777 15,666 14,471 9,545 Communications and utilities 5,711 5,209 6,081 4,698 4,135 Depreciation and amortization 40,094 37,010 39,143 33,694 27,360 Gains on disposals of revenue equipment ( 490) (2,397) Rent and purchased transportation 99,584 53,014 41,946 23,564 4,246 Other 2,077 2,362 2,435 2,058 1,792 -------------------------------------------------------- Total operating expenses 381,044 316,409 308,432 263,222 199,679 -------------------------------------------------------- Operating income 34,889 23,827 24,638 29,661 25,037 Interest expense (5,775) (4,844) (5,525) (1,802) (2,041) Interest income 92 1,449 Other (expense) income 320 395 (25) 147 118 -------------------------------------------------------- Income before income taxes and cumulative effect of change in accounting for income taxes 29,434 19,470 20,537 28,006 23,114 Income taxes 10,472 7,031 7,386 10,856 9,512 -------------------------------------------------------- Income before cumulative effect of accounting change 18,962 12,439 13,151 17,150 13,602 Cumulative effect as of January 1, 1993 of change in accounting for income taxes 500 -------------------------------------------------------- Net income $18,962 $12,439 $13,151 $17,150 $14,102 -------------------------------------------------------- -------------------------------------------------------- Diluted earnings per share: Income before cumulative effect of accounting change $1.54 $1.02 $1.01 $1.31 $1.13 Cumulative effect of accounting change 0.04 -------------------------------------------------------- Diluted earnings per share $1.54 $1.02 $1.01 $1.31 $1.17 -------------------------------------------------------- -------------------------------------------------------- Basic earnings per share: Income before cumulative effect of accounting change $1.57 $1.03 $1.02 $1.33 $1.15 Cumulative effect of accounting change $0.04 -------------------------------------------------------- Basic earnings per share $1.57 $1.03 $1.02 $1.33 $1.15 -------------------------------------------------------- --------------------------------------------------------
9
December 31 1997 1996 1995 1994 1993 (In thousands) -------------------------------------------------------- Balance sheet data: Total assets $362,246 $290,662 $279,934 $276,073 $198,960 Long-term obligations 79,977 45,373 47,377 51,187 17,985 Stockholders' equity 177,391 154,211 152,524 147,924 131,939
The following tables set forth data regarding the freight revenues, operations, revenue equipment and employees of the Company. 1997 1996 1995 1994 1993 -------------------------------------------------------- For the year ended December 31: Operating ratio (1) 91.6% 93.0% 92.6% 89.9% 88.9% Average number of truckloads per week (2) 9,385 9,277 8,265 6,971 5,759 Average revenues per tractor per week (2) $2,652 $2,575 $2,569 $2,613 $2,530 Average miles per trip (2) 633 534 584 617 618 Average revenue per mile (2) $1.19 $1.23 $1.25 $1.26 $1.19 At December 31: - - --------------- Total tractors operated Company owned 2,370 2,046 2,078 2,106 1,854 Owner-Operator owned 771 419 253 207 0 Total tractors 3,141 2,465 2,331 2,313 1,854 Total trailers 8,981 7,156 7,190 6,481 5,256 Number of employees 3,112 2,886 2,947 3,238 2,705 (1) Operating expenses as a percentage of operating revenues. (2) Excludes revenues from logistics services which began in September 1993.
10 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following table sets forth the percentage relationship of revenue and expense items to operating revenues for the periods indicated.
Percentage of Operating Revenues Year ended December 31 1997 1996 1995 ---------------------------------- Operating revenues 100.0% 100.0% 100.0% Operating expenses: Salaries, wages and benefits 32.1 37.4 37.9 Operations and maintenance 17.2 19.5 20.1 Taxes and licenses 2.6 2.6 3.0 Insurance and claims 4.4 5.5 4.7 Communications and utilities 1.4 1.5 1.8 Depreciation and amortization 9.6 10.9 11.8 Gains on disposals of revenue equipment (0.1) (0.7) Rent and purchased transportation 23.9 15.6 12.6 Other 0.5 0.7 0.7 ---------------------------------- Total operating expenses 91.6 93.0 92.6 ---------------------------------- Operating income 8.4 7.0 7.4 Interest expense 1.4 1.4 1.7 Interest income (0.5) Other (income) expense (0.1) (0.1) 0.1 ---------------------------------- Income before income taxes 7.1 5.7 6.1 Income taxes 2.5 2.0 2.2 ---------------------------------- Net income 4.6% 3.7% 3.9% ---------------------------------- ----------------------------------
The sources of the Company's operating revenues were as follows:
Year ended December 31 1997 1996 1995 [Dollars in Thousands] ------------------------------- Domestic Linehaul $206,368 $162,790 $166,655 Interline Service - Mexico 38,849 33,183* 28,299 Dedicated 28,266 27,644 22,129 Regional 107,366 93,794* 97,806 Logistics 35,084 22,825 18,181 ------------------------------- Total $415,933 $340,236 $333,070 ------------------------------- ------------------------------- * Interline Service - Mexico revenue was restated for 1996 to include international freight carried by regional trucks. Regional revenue for 1996 was reduced by the same amount.
11 1997 Compared to 1996 - - --------------------- Operating revenues grew 22.2% to $416 million in 1997 from $340 million in 1996. The Company's increase in revenues was due primarily to increased demand from customers, expansion of the Company's fleet and increased logistics revenues. Total trucking revenues during 1997 increased 20.0% compared to 1996 and logistics revenues during 1997 increased 53.7% compared to 1996. The Company's fleet increased to 3,141 tractors at December 31, 1997 from 2,465 at December 31, 1996, an increase of 676 tractors. In September 1997, the Company concluded the acquisition of certain assets of New Hi-Way Express, Inc., including 220 company-owned tractors and contracts with 42 owner-operators. Revenues per mile were $1.19 in 1997 compared to $1.23 in 1996, due to a decrease in the average loaded rate per mile experienced by the Company in 1997. The decrease resulted from a change in freight mix rather than a change in freight rates. Average length of haul increased to 633 miles in 1997 up from 534 miles in 1996. The operating ratio (operating expenses as a percentage of operating revenues) for 1997 was 91.6% compared to 93.0% for 1996. Salaries, wages and benefits decreased to 32.1% of revenues in 1997 compared to 37.4% of revenues in 1996. This decrease was due primarily to the owner-operator tractors representing a larger percentage of the average number of total tractors in service during 1997 compared to 1996, which caused a shift in operating expenses as amounts paid to owner-operators are recorded as purchased transportation. The Company had 771 owner-operators at December 31, 1997 compared to 419 at December 31, 1996. Operations and maintenance expenses decreased to 17.2% of revenues in 1997 from 19.5% of revenues in 1996. This decrease resulted from the expanded use of owner-operators and lower fuel costs. Insurance and claims expense was 4.4% of revenues in 1997 compared to 5.5% of revenues in 1996. This decrease was due primarily to increased logistics revenues in 1997 and to unfavorable claims experience during the last quarter of 1996. Depreciation and amortization decreased to 9.6% of revenues in 1997 compared to 10.9% of revenues in 1996. This decrease resulted primarily from the expanded use of owner-operators and increased logistics revenues. The Company reported gains equal to .1% of revenues, or approximately $500,000, from the disposal of revenue equipment in 1997 compared to .7% of revenues, or approximately $2.4 million, in 1996. Rent and purchased transportation increased to 23.9% of revenues in 1997 from 15.6% of revenues in 1996. This increase was attributable primarily to the expanded use of owner-operators by the Company and increased expenses related to logistics services. 12 Interest expense was $5,775,020 in 1997 compared to $4,844,062 in 1996. This increase in interest expense was due to an increase in average outstanding debt during 1997 as compared to 1996. The effective income tax rate decreased to 35.6% in 1997 compared to 36.1% in 1996, as described in Note 7 to the Notes to Consolidated Financial Statements. 1996 Compared to 1995 - - --------------------- Operating revenues increased to $340 million in 1996 from $333 million in 1995. This 2.1% increase in revenues was due primarily to increased revenue from logistics and dedicated fleet services. Total trucking revenues during 1996 increased slightly compared to 1995. The Company's fleet increased to 2,465 tractors at December 31, 1996 from 2,310 at December 31, 1995, an increase of 155 tractors. Revenues per mile were $1.23 in 1996 compared to $1.25 in 1995, due to a decrease in the average loaded rate per mile experienced by the Company in 1996. Salaries, wages and benefits were 37.4% of revenues in 1996 compared to 37.9% of revenues in 1995. The decrease was due to owner-operator tractors representing a larger percentage of the average number of total tractors in service during 1996 as compared to 1995. The Company had 419 owner-operators at December 31, 1996 compared to 253 at December 31, 1995. Operations and maintenance expenses decreased to 19.5% of revenues in 1996 from 20.1% of revenues in 1995, despite higher fuel costs. This decrease resulted from the larger percentage of owner-operator tractors used in 1996 and an updated fleet of tractors due to a reduction in the disposal cycle of tractors. Taxes and licenses expense was 2.6% of revenues in 1996 compared to 3.0% in 1995. This decrease was due to various unexpected sales and operating tax refunds received from overpayments of taxes in prior years. Insurance and claims expense was 5.5% of revenues in 1996 compared to 4.7% in 1995. This increase was attributable primarily to unfavorable claims experience during the last quarter of 1996. Depreciation and amortization decreased to 10.9% of revenues in 1996 compared to 11.8% of revenues in 1995. This decrease resulted primarily from a change in accounting estimate to increase the estimated salvage value of substantially all of the Company's trailers to more accurately reflect market conditions. See Note 3 of the Notes to Consolidated Financial Statements. The Company reported gains equal to .7% of operating revenues, or approximately $2.4 million, from the disposal of revenue equipment in 1996. Prior to 1996, the Company traded in revenue equipment and reduced the basis of new additions. Rent and purchased transportation increased to 15.6% of revenues in 1996 compared to 12.6% of revenues in 1995. This increase was attributable primarily to the expanded use of owner-operators by the Company and increased expenses related to logistics services. 13 Interest expense was $4,844,062 in 1996 compared to $5,524,467 in 1995. This decrease in interest expense was due to the decrease in average outstanding debt during 1996 as compared to 1995. The effective income tax rate increased to 36.1% in 1996 compared to 36.0% in 1995, as described in Note 7 of the Notes to Consolidated Financial Statements. Liquidity and Capital Resources - - ------------------------------- The Company's business continues to require significant investments in new revenue equipment and office and terminal facilities. These investments have been financed largely from cash provided by operating activities, secured and unsecured borrowing and unsecured credit facilities during the past three years. Net cash provided by operating activities was approximately $59.2 million in 1997, $53.7 million in 1996, and $55.4 million in 1995. At December 31, 1997, the Company had total outstanding obligations of $95.7 million related to purchases of revenue equipment. The Company expects to have expenditures, net of sales, of approximately $100 million for additional revenue equipment in 1998. The Company expects to fund these expenditures through cash provided by operating activities, secured borrowings, or existing credit facilities. Prevailing interest rates and the market for used revenue equipment may affect the timing of the Company's purchase of new and replacement revenue equipment. Historically, cash provided by operating activities, secured and unsecured borrowing and existing credit facilities have been sufficient to satisfy substantially all of the Company's working capital and capital expenditure requirements. The Company has bank lines of credit providing for total borrowings of up to $70 million, with interest at the lower of the bank's prime rate or the 30-day LIBOR rate plus .45%. At December 31, 1997, there was $48.5 million outstanding under these lines of credit. Management expects to maintain these or similar credit facilities for an indefinite period. Impact of Year 2000 - - ------------------- The Company has completed an assessment and will have to modify or replace portions of its software so that its computer systems will function properly with respect to dates in the Year 2000 and thereafter. The project is estimated to be completed no later than July 31, 1999, which is prior to any anticipated impact on its operating systems. Management estimates that the total Year 2000 project costs will not have a material impact on the Company's results of operations, financial position or capital resources. The Company believes that with modifications to its existing software, the Year 2000 Issue will not pose significant operational problems for its computer systems. The assessment of the impact of the Year 2000 Issue is based on management's best estimates, which were derived utilizing numerous assumptions of future events, including the continued availability of certain resources and other factors. However, there is no guarantee that these estimates will be achieved and actual results could differ materially from those anticipated. Specific factors that might cause material differences include, but are not limited to, the availability and costs of personnel trained in this area, the ability to locate and correct all relevant computer codes, the timely conversion of systems of other companies which interface with the Company's systems, and similar uncertainties. 14 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Company's Consolidated Financial Statements and Financial Statement Schedules are included on pages 24 to 41. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 15 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The names, ages and certain other information about the Company's directors, executive officers and other officers as of March 6, 1998 are set forth below: Name Age Position - - ------------------------------------------------------------------------- Michael S. Starnes 53 Chairman of the Board, President, Chief Executive Officer and Director James W. Welch 54 Senior Vice President - Marketing and Director M. J. Barrow 53 Senior Vice President - Finance and Administration, Secretary - Treasurer and Director Mike Reaves 53 Senior Vice President - Driver Services Robert P. Hurt 63 Vice President - Maintenance Assistant Secretary John M. Hudson 57 Vice President - Human Resources Kenneth B. Stonebrook 36 Vice President - Asset Utilization Russell J. Begin 39 Vice President - Chairman's Office Lisa Ayotte 33 Vice President - Safety and Risk Management Dwight M. Bassett 38 Controller, Chief Accounting Officer, Assistant Secretary Carl J. Mungenast 58 Director Morris H. Fair 68 Director Jack H. Morris, III 67 Director 16 Michael S. Starnes has served as a director, Chief Executive Officer and President of the Company since 1978. In 1986, Mr. Starnes was named Chairman of the Board. Mr. Starnes is also a director of RFS Hotel Investors, Inc., a real estate investment trust. James W. Welch joined the Company in 1982 as a director and Vice President- Sales. In 1989, Mr. Welch was named Senior Vice President-Marketing of the Company and is an executive officer of the Company. M. J. Barrow joined the Company in 1982 as Controller and Treasurer. Shortly thereafter, he was elected as a director of the Company and named Vice President-Finance. Mr. Barrow was named Secretary-Treasurer of the Company in 1986 and Senior Vice President-Finance of the Company in 1989. In 1996, he was named Senior Vice President - Finance and Administration. Mike Reaves joined the Company on June 20, 1994 and was named Vice President-Driver Services of the Company in 1995. In 1996, he was named Senior Vice President - Driver Services. Prior to joining the Company, Mr. Reaves was employed by Yellow Corporation, the parent company of several less-than-truckload carriers, for more than five years in various sales management positions. Robert P. Hurt joined the Company in 1983 as a director and Vice President - Operations and Maintenance. Mr. Hurt was named Vice President - Maintenance of the Company in 1984. John M. Hudson joined the Company in 1990 and was named Vice President- Human Resources of the Company in 1991 and Vice President-Process and Individual Development of the Company in 1994. In 1996, he resumed the position of Vice President - Human Resources. Kenneth B. Stonebrook joined the Company 1983 and was named Vice President-Human Resources of the Company in 1994. He was named Vice President and General Manager - Southeast Region in 1996 and became Vice President - Asset Utilization in 1997. Russell J. Begin joined the Company in 1992 as a Cost Accountant. He was subsequently named Senior Financial Analyst, and later Divisional Sales Manager of the Southeast Region. In 1996 he was named Director of Marketing, and in 1997 assumed the position of Vice President - Chairman's Office. Lisa Ayotte joined the Company in 1997 as Vice President - Safety and Risk Management. Ms. Ayotte was previously employed by AmeriTruck Distribution Corporation as Director of Risk Management. Dwight M. Bassett joined the Company in 1986 and was named Director of Accounting and Controller in 1992. In 1996, Mr. Bassett was named Director and General Manager of the Company's Western Division and in 1997 he resumed his position as Director of Accounting and Controller. In 1997, he was also named Assistant Secretary of the Company. Carl J. Mungenast joined the Company as Executive Vice President and Chief Operating Officer in April 1994. Mr. Mungenast was elected as a director of the Company in May 1994. In June 1996, for health reasons, Mr. Mungenast's duties were curtailed and he was named Advisor to the Chairman. In November 1997, Mr. Mungenast became a consultant to the Company. Mr. Mungenast was employed by Sears Roebuck and Company from 1958 until his retirement in December 1993. At the time of his retirement, 17 he was Senior Vice President for Sears Logistics Services in Itasca, Illinois and responsible for all distribution, transportation and home delivery services for Sears. Morris H. Fair has served as a director of the Company since 1986. Mr. Fair was Senior Vice President of Union Planters Corporation, a bank holding company, from September 1988 to December 1992. Mr. Fair has been associated with Raymond James & Associates, Inc. since April 1995. Jack H. Morris, III has served as a director of the Company since 1986. Mr. Morris has been Chief Executive Officer of Auto Glass of Memphis, Inc. for more than five years. The Amended and Restated Bylaws of the Company provide for a Board of Directors consisting of not less than three members, which number may be fixed from time to time by resolution of the Board of Directors. The term of each director expires at the next annual meeting of shareholders following the election of the director. Section 16(a) of the Securities Exchange Act of 1934 requires the Company's officers and directors, and persons who own more than 10% of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (the "SEC"). Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely upon a review of the copies of such forms furnished to the Company, the Company believes that its officers, directors and greater than 10% beneficial owners complied with all Section 16(a) filing requirements applicable to them during the Company's preceding fiscal year, except (i) Mr. Starnes filed a late Form 5 relating to the gift of 1,045 shares of Common Stock in December 1996, (ii) Mr. Reaves reported the purchase of 500 shares of Common Stock in May 1996 late on a Form 5 and (iii) Robert P. Hurt reported the exercise of a stock option for 20,000 shares of Common Stock in October 1997 late on Form 5. 18 ITEM 11. EXECUTIVE COMPENSATION Information with respect to executive compensation is set forth under the captions "Executive Compensation," "Summary Compensation Table," "Option Grants in 1997," "Aggregated Option Exercises in 1997 and Year-End Value Table" and "Employment Contracts" in the Registrant's Proxy Statement dated March 23, 1998 relating to its 1998 Annual Meeting of Shareholders (the "1998 Proxy Statement") to be held on May 1, 1998, which is incorporated by reference into the Form 10- K. With the exception of the foregoing information and other information specifically incorporated by reference in this Form 10-K, the 1998 Proxy Statement is not being filed as a part hereof. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information with respect to security ownership of certain beneficial owners and management is included under the caption "Beneficial Ownership of Common Stock" in the 1998 Proxy Statement and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Executive Compensation Committee of the Board of Directors is comprised of Michael S. Starnes, Morris H. Fair and Jack H. Morris, III, all of whom participated in deliberations concerning executive officer compensation. Mr. Starnes also serves as President and Chief Executive Officer of the Company. The Committee establishes the compensation for Mr. Starnes and reviews compensation set by Mr. Starnes for other executive officers. Mr. Starnes does not participate in the Committee's deliberations concerning his compensation. 19 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K (a) Financial Statements and Financial Statement Schedules. (1) The following consolidated Financial Statements of the Company and its Subsidiaries are included herein on the page indicated. Page No. Report of Independent Auditor 25 Consolidated Balance Sheets 26-27 Consolidated Statements of Income 28 Consolidated Statements of Stockholders' Equity 29 Consolidated Statements of Cash Flow 30 Notes of Consolidated Statements 31-40 (2) Financial Statement Schedules Schedule II - Valuation and Qualifying Accounts for the Company is included herein on page 41. (3) Exhibits -- An Exhibit Index of the exhibits required by Item 601 of Regulation S-K is included herein on page 22-23. (b) Reports on Form 8-K. The Company did not file any report on Form 8-K during the last quarter of 1997. 20 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. M.S. Carriers, Inc. (Registrant) By: s/ Michael S. Starnes --------------------- Michael S. Starnes Chairman of the Board, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. s/ Michael S. Starnes Chairman of the Board, President, March 31, 1998 - - --------------------- Chief Executive Officer and -------------- Michael S. Starnes Director Date s/ James W. Welch Senior Vice President - March 31, 1998 - - --------------------- Marketing and Director -------------- James W. Welch Date s/ M.J. Barrow Senior Vice President - March 31, 1998 - - --------------------- Finance and Administration, -------------- M.J. Barrow Secretary-Treasurer and Director Date s/ Dwight M. Bassett Controller, Chief Accounting March 31, 1998 - - --------------------- Officer and Assistant Secretary -------------- Dwight M. Bassett Date s/ Jack H. Morris, III Director March 31, 1998 - - --------------------- -------------- Jack H. Morris, III Date - - --------------------- Carl J. Mungenast Director -------------- Date - - --------------------- -------------- Morris H. Fair Director Date 21 EXHIBIT INDEX Exhibit Page Number or Incorporation Number Description By Reference - - ---------------------------------------------------------------------------- 3(i).1 Restated Charter of M.S. Carriers, Incorporated by reference from Inc. exhibits to the Registrant's Registration Statement on Form S-1 (Registration Number 33-12070). 3(i).2 Articles of Amendment to Charter Incorporated by reference from of M.S. Carriers, Inc. exhibits to the Registrant's Registration Statement on Form S-3 (Registration Number 33-63280). 3(ii) Amended and Restated By-Laws of M.S. Incorporated by reference from Carriers, Inc. exhibits to the Registrant's Registration Statement on Form S-3 (Registration Number 33-63280). 10.1 Incentive Stock Option Plan Incorporated by reference from exhibits to the Registrant's Registration Statement on Form S-1 (Registration Number 33-12070). 10.2 Amendment to Incentive Stock Option Incorporated by reference from Plan exhibits to the Registrant's Registration Statement on Form S-1 (Registration Number 33-12070). 10.3 1993 Stock Option Plan Incorporated by reference from exhibits to the Registrant's Registration Statement on Form S-3 (Registration Number 33-63280). 10.4 Non-Employee Directors Stock Option Incorporated by reference Plan from Registrant's Proxy Statement dated March 31, 1995. 10.5 Employment Agreements with James W. Incorporated by reference Welch, M.J. Barrow and Robert P. from exhibits to the Hurt Registrant's Statement on Form S-1 (Registration Number 33-12070). 10.6 Employment Agreement with Michael S. Incorporated by reference Starnes from exhibits to the Registrant's 2nd Quarter 1995 Form 10-Q. 22 10.6 M.S. Carriers, Inc. 1996 Stock Incorporated by reference Option Plan from exhibits to the Registrant's Proxy Statement dated April 4, 1996 21 Subsidiaries of the Registrant Page 42 27 Financial Data Schedule NOT INCLUDED WITH PAPER FILING 23 Annual Report on Form 10-K Item 8, Item 14(a)(1) and (2), (c) and (d) Index of Financial Statements and Financial Statement Schedule Financial Statements and Supplementary Data Certain Exhibits Financial Statement Schedule Year ended December 31, 1997 M.S. Carriers, Inc. Memphis, Tennessee 24 Report of Independent Auditors Board of Directors M.S. Carriers, Inc. We have audited the accompanying consolidated balance sheets of M.S. Carriers, Inc. and subsidiaries as of December 31, 1997 and 1996, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1997. Our audits also included the financial statement schedule listed in the Index at Item 14(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of M.S. Carriers, Inc. and subsidiaries at December 31, 1997 and 1996, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1997 in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. s/ Ernst & Young LLP -------------------- Memphis, Tennessee January 27, 1998 25
M.S. Carriers, Inc. Consolidated Balance Sheets December 31 1997 1996 ---------------------------- Assets Current assets: Cash and cash equivalents $ 351,919 $ 1,153,993 Accounts receivable: Trade, net 44,551,316 33,018,388 Officers and employees 660,370 1,506,247 ---------------------------- 45,211,686 34,524,635 Recoverable income taxes 4,520,917 5,870,263 Deferred income taxes 5,427,000 3,755,000 Prepaid expenses and other 4,979,826 4,898,183 ---------------------------- Total current assets 60,491,348 50,202,074 Property and equipment: Land and land improvements 6,221,032 6,110,279 Buildings 30,128,055 30,128,055 Revenue equipment 326,709,385 260,026,924 Service equipment and other 40,089,062 37,014,110 Construction in progress 114,015 177,218 ---------------------------- 403,261,549 333,456,586 Accumulated depreciation and amortization 106,090,776 96,240,862 ---------------------------- 297,170,773 237,215,724 Other assets 4,584,340 3,243,916 ---------------------------- Total assets $362,246,461 $290,661,714 ---------------------------- ----------------------------
26
M.S. Carriers, Inc. Consolidated Balance Sheets (continued) December 31 1997 1996 ---------------------------- Liabilities and Stockholders' equity Current liabilities: Trade accounts payable $ 5,448,110 $ 7,288,149 Accrued compensation and related costs 2,343,595 3,125,694 Other accrued expenses 8,438,898 6,608,104 Claims payable 14,826,627 11,694,210 Current maturities of long-term obligations 15,737,609 14,315,462 ---------------------------- Total current liabilities 46,794,839 43,031,619 Long-term obligations, less current maturities 79,977,266 45,373,288 Deferred income taxes 58,083,519 48,045,423 Commitments and contingencies Stockholders' equity: Common stock, $.01 par value: Authorized shares- 20,000,000 Issued and outstanding shares-12,210,601 in 1997 and 12,009,633 in 1996 122,106 120,096 Additional paid-in capital 64,175,260 9,959,590 Retained earnings 115,097,125 96,135,352 Cumulative translation adjustments (2,003,654) (2,003,654) ---------------------------- Total stockholders' equity 177,390,837 154,211,384 Total liabilities and stockholders' equity $362,246,461 $290,661,714 ---------------------------- ---------------------------- See accompanying notes.
27
M.S. Carriers, Inc. Consolidated Statements of Income Year ended December 31 1997 1996 1995 ------------------------------------------ Operating revenues $415,932,825 $340,235,583 $333,069,506 Operating expenses: Salaries, wages and benefits 133,517,321 127,236,924 126,176,172 Operations and maintenance 71,380,518 66,224,264 66,961,380 Taxes and licenses 10,707,885 8,972,386 10,024,270 Insurance and claims 18,462,037 18,776,953 15,666,099 Communications and utilities 5,710,433 5,208,967 6,080,563 Depreciation and amortization 40,093,988 37,010,281 39,142,879 Gains on disposals of revenue equipment (489,519) (2,397,205) Rent and purchased transportation 99,584,257 53,014,083 41,945,874 Other 2,077,206 2,361,881 2,434,767 ------------------------------------------ 381,044,126 316,408,534 308,432,004 ------------------------------------------ Operating income 34,888,699 23,827,049 24,637,502 Other expense (income): Interest expense 5,775,020 4,844,062 5,524,467 Interest income (91,926) (1,448,577) Other (319,977) (395,488) 24,081 ------------------------------------------ 5,455,043 4,356,648 4,099,971 ------------------------------------------ Income before income taxes 29,433,656 19,470,401 20,537,531 Income taxes 10,471,883 7,031,357 7,386,439 ------------------------------------------ Net income $18,961,773 $12,439,044 $13,151,092 ------------------------------------------ ------------------------------------------ Basic earnings per share $ 1.57 $ 1.03 $ 1.02 ------------------------------------------ ------------------------------------------ Diluted earnings per share $ 1.54 $ 1.02 $ 1.01 ------------------------------------------ ------------------------------------------ See accompanying notes.
28
M.S. Carriers, Inc. and Subsidaries Consolidated Statements of Stockholders' Equity Additional Cumulative Common Stock Paid-in Retained Translation Shares Amount Capital Earnings Adjustments Total -------------------------------------------------------------------------------------------- Balance at January 1, 1995 12,878,300 $128,783 $64,137,909 $84,842,041 $ (1,185,000) $147,923,733 Net income 13,151,092 13,151,092 Repurchase of common stock (413,900) (4,139) (2,061,222) (5,691,214) (7,756,575) Translation adjustments (794,231) (794,231) -------------------------------------------------------------------------------------------- Balance at December 31, 1995 12,464,400 124,644 62,076,687 92,301,919 (1,979,231) 152,524,019 Net income 12,439,044 12,439,044 Exercise of stock options 131,333 1,313 801,681 802,994 Repurchase of common stock (586,100) (5,861) (2,918,778) (8,605,611) (11,530,250) Translation adjustments (24,423) (24,423) -------------------------------------------------------------------------------------------- Balance at December 31, 1996 12,009,633 120,096 59,959,590 96,135,352 (2,003,654) 154,211,384 Net income 18,961,773 18,961,773 Issuance of common stock upon business acquisition 153,468 1,535 3,574,270 3,575,805 Exercise of stock options 47,500 475 641,400 641,875 -------------------------------------------------------------------------------------------- Balance at December 31, 1997 12,210,601 $122,106 $64,175,260 $115,097,125 $(2,003,654) $177,390,837 -------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------- See accompanying notes.
29
M.S. Carriers, Inc. Consolidated Statements of Cash Flows Year ended December 31 1997 1996 1995 --------------------------------------- Operating activities Net income $18,961,773 $12,439,044 $13,151,092 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 40,093,988 37,010,281 39,142,879 Gains on disposals of revenue equipment (489,519) (2,397,205) Other (220,695) (324,759) (208,613) Deferred income taxes 8,366,096 10,669,902 6,326,521 Changes in operating assets and liabilities: Accounts receivable (10,687,051) (5,699,198) 4,959,327 Current and other assets 1,533,687 (1,084,198) (5,407,782) Trade accounts payable (1,840,039) 2,951,302 (2,004,678) Other current liabilities 3,485,198 154,542 (585,670) --------------------------------------- Net cash provided by operating activities 59,203,438 53,719,711 55,373,076 Investing activities Purchases of property and equipment (96,025,327) (57,929,668) (76,590,161) Proceeds from disposals of property and equipment 34,064,457 19,958,710 2,490,800 Business acquisition (672,739) --------------------------------------- Net cash used in investing activities (62,633,609) (37,970,958) (74,099,361) Financing activities Proceeds from long-term obligations 139,515 Net change in line of credit obligations 23,403,189 12,213,000 12,856,000 Proceeds from issuance of common stock 641,875 802,994 Repurchase of common stock (11,530,250) (7,756,575) Principal payments on long-term obligations (21,416,967) (16,706,478) (16,693,412) --------------------------------------- Net cash provided by (used in) financing activities 2,628,097 (15,081,219) (11,593,987) --------------------------------------- Increase (decrease) in cash and cash equivalents (802,074) 667,534 (30,320,272) Cash and cash equivalents at beginning of year 1,153,993 486,459 30,806,731 --------------------------------------- Cash and cash equivalents at end of year $ 351,919 $ 1,153,993 $ 486,459 --------------------------------------- --------------------------------------- See accompanying notes.
30 M.S. Carriers, Inc. Notes to Consolidated Financial Statements December 31, 1997 1. Nature of Business M.S. Carriers, Inc. is an irregular route, truckload carrier transporting a wide range of commodities throughout the United States, and the provinces of Ontario and Quebec, Canada, with interline service to Mexico. The Company may transport any type of freight (except certain types of explosives, household goods and commodities in bulk) from any point in the continental United States to any other point in another state over any route selected by the Company. The Company's primary traffic flows are between the Middle South and the Southwest, Midwest, Central States, Southeast and Northeast. The principal types of freight transported are packages, retail goods, non-perishable foodstuffs, paper and paper products, household appliances, furniture and packaged petroleum products. Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities comprising the Company's customer base and their dispersion across many different industries. The Company performs ongoing credit evaluations and generally does not require collateral. 2. Significant Accounting Policies Organization and Principles of Consolidation The consolidated financial statements include the accounts of M.S. Carriers, Inc. and its wholly-owned subsidiaries, M.S. Carriers Warehousing and Distribution, Inc., M.S. Carriers Logistics Mexico, S.A. de C.V., M.S. International, Inc. and M.S. Global, Inc. Significant intercompany accounts and transactions have been eliminated in consolidation. The Company accounts for its 50% investment in Transportes EASO S.A. de C.V. (EASO), a Mexican trucking company, by the equity method. This investment is classified as other assets in the consolidated financial statements and is approximately $1,503,000 and $1,197,000 at December 31, 1997 and 1996, respectively. The Company recognized income of approximately $306,000 in 1997 from its investment in EASO. The operations of EASO were approximately break even in 1996 and 1995. Revenue Recognition Operating revenues are recognized on the date the freight is delivered. Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. 31 M.S. Carriers, Inc. Notes to Consolidated Financial Statements (continued) 2. Significant Accounting Policies (continued) Property and Equipment Property and equipment are stated at cost. Depreciation, which includes amortization of assets held under capital leases, is computed on the straight- line method over the estimated useful lives as follows: Buildings 15-30 Years Revenue equipment 3-6 Years Service equipment and other 3-5 Years Tires and tubes purchased as part of revenue equipment are capitalized as a cost of the equipment. Replacement tires and tubes are expensed when placed in service. Foreign Currency Translation Prior to January 1, 1997, the functional currency of the Company's foreign subsidiary and equity investee was the local currency, the Mexican peso. Balance sheet accounts were translated at exchange rates in effect at the end of the year and income statement accounts were translated at average exchange rates for the year. Translation gains and losses were included as a separate component of stockholders' equity. Effective January 1, 1997, Mexico was designated as a highly inflationary economy. As a result, the functional currency was changed from the local currency to the reporting currency. Translation gains and losses beginning January 1, 1997 are recorded in the statement of income rather than as a separate component of stockholders' equity. Income Taxes The Company accounts for income taxes using the liability method. Earnings Per Share In 1997, the Financial Accounting Standards Board (FASB) issued and the Company adopted Statement No. 128, Earnings per Share. Statement 128 replaced the calculation of primary and fully diluted earnings per share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share excludes any dilutive effects of options, warrants and convertible securities. Diluted earnings per share is very similar to the previously reported fully diluted earnings per share. All earnings per share amounts for all periods have been presented, and where appropriate, restated to conform to the Statement 128 requirements. Risks and Uncertainties The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. 32 M.S. Carriers, Inc. Notes to Consolidated Financial Statements (continued) 2. Significant Accounting Policies (continued) Stock-Based Compensation The Company accounts for stock-based compensation awards under provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. Accounting Pronouncements In 1997, the FASB issued Statement No. 130, Reporting Comprehensive Income, which is effective for fiscal years beginning after December 15, 1997. Statement 130 establishes standards for the reporting and display of comprehensive income and its components. The Statement requires that all items that are included in comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. The Company is currently evaluating the reporting formats recommended under this statement. In 1997, the FASB issued Statement No. 131, Disclosures about Segments of an Enterprise and Related Information, which is effective for fiscal years beginning after December 15, 1997. Statement 131 changes the way public companies report segment information in annual financial statements and also requires those companies to report selected segment information in interim financial reports to shareholders. The Company is evaluating the provisions of this statement and, upon adoption, may establish different operating segments for reporting purposes. 3. Change in Accounting Estimate Effective February 1, 1996, the Company changed the estimated salvage value of substantially all of its trailers to more accurately reflect market conditions. This change in accounting estimate decreased depreciation expense by approximately $3,500,000, resulting in an increase in net income of approximately $2,200,000 and an increase in both basic and diluted earnings per share of $.18 per share for the year ended December 31, 1996. 4. Business Acquisition In September 1997, the Company acquired substantially all of the assets and assumed certain liabilities of a truckload carrier located in Arkansas. The Company acquired assets, which consisted primarily of revenue equipment, totaling approximately $19,575,000, and assumed liabilities, which consisted primarily of capitalized lease obligations, totaling approximately $15,943,000. In connection with this acquisition, the Company issued to the seller 153,468 shares of the Company's common stock valued at $3,575,805, recorded approximately $443,000 in deferred payments and paid cash of $673,000. The acquisition resulted in goodwill of approximately $1,060,000, which is being amortized using the straight-line method over five years. This acquisition was accounted for by the Company using the purchase method of accounting. The results of operations of the acquired company are included in the accompanying consolidated statement of income from the acquisition date, and are immaterial to the Company's results of operations. 33 M.S. Carriers, Inc. Notes to Consolidated Financial Statements (continued)
5. Long-Term Obligations Long-term obligations consist of the following: December 31 1997 1996 -------------------------- Equipment loans $ 4,638,127 $13,291,078 Capitalized lease obligations 42,604,559 21,328,672 Revolving lines of credit 48,472,189 25,069,000 -------------------------- 95,714,875 59,688,750 Less current maturities (15,737,609) (14,315,462) -------------------------- $79,977,266 $45,373,288 -------------------------- --------------------------
The equipment loan is due in 1998 in monthly installments and bears interest at a rate of 8.12%. The Company has a line of credit available for borrowings of up to $60,000,000 with interest at the lower of the bank's prime rate or the 30-day LIBOR rate plus .45% (6.41% at December 31, 1997). The balance outstanding under this line of credit was $38,472,189 and $25,069,000 at December 31, 1997 and 1996, respectively. There are no commitment fees or compensating balance requirements for the line of credit, which expires June 1, 1999. During 1994, the Company entered into sale leaseback transactions related to revenue equipment. These capital leases are secured by the related revenue equipment with a net book value at December 31, 1997 and 1996 of approximately $19,700,000 and $23,100,000, respectively, which is net of accumulated amortization of $9,900,000 and $6,900,000, respectively, and bear interest at 8.12%. The remaining lease terms are from 1 to 2 years and contain renewal or fixed price purchase options and guarantees of residual value at the end of the lease terms. During 1997, the Company entered into an agreement with a bank to provide for borrowings of up to $10,000,000 under a separate line of credit. The line of credit bears interest at varying rates based upon the lower of the bank's prime rate or the 30-day LIBOR rate plus .45% (6.41% at December 31, 1997). The balance outstanding under this line of credit, which expires June 1, 1998, was $10,000,000 at December 31, 1997. This amount is classified as a long-term obligation in the accompanying consolidated balance sheet because the Company intends to refinance the line of credit on a long-term basis through a new credit facility or through the existing $60,000,000 line of credit. During December 1997, the Company entered into a sale leaseback transaction related to revenue equipment. These capital leases bear interest at varying rates based upon the 30-day LIBOR rate less .60% (5.37% at December 31, 1997) and are secured by the related revenue equipment with a net book value at December 31, 1997 of $18,300,000. Amortization of the revenue equipment will begin January 1, 1998, when the assets are placed in service. The lease terms are 3 years and contain guarantees of residual value at the end on the lease terms. In connection with the acquisition described in note 4, the Company assumed approximately $15,700,000 in capitalized lease obligations related to acquired revenue equipment with a fair value of approximately $19,175,000 at the time of acquisition. These capital leases are secured by the related revenue equipment 34 M.S. Carriers, Inc. Notes to Consolidated Financial Statements (continued) 5. Long-Term Obligations (continued) with a net book value at December 31, 1997 of $18,445,000, which is net of accumulated amortization of $730,000 and bear interest at rates ranging from 8% to 11%. Certain of the Company's debt agreements contain covenants including required ratios of notes payable to net worth and notes payable to cash flow. The future maturities of long-term debt and future minimum lease payments under capitalized lease obligations, by year and in the aggregate, consist of the following at December 31, 1997:
Long-Term Capitalized Lease Debt Obligations --------------------------------- 1998 $ 4,638,127 $13,426,030 1999 48,472,189 17,448,964 2000 15,392,802 2001 2,002,949 --------------------------------- 53,110,316 48,270,745 Amounts representing interest 5,666,186 --------------------------------- Total long-term obligations $53,110,316 $42,604,559 --------------------------------- ---------------------------------
The Company paid interest of approximately $5,775,000 in 1997, $4,769,000 in 1996 and $5,524,000 in 1995. 6. Claims Payable Under an agreement with its insurance underwriters, the Company self-insures for liability of $1,500,000 for the initial occurrence per policy year, $1,250,000 for the second occurrence per policy year, and $1,000,000 for each occurrence thereafter involving bodily injury and property damage. Excess liability is assumed by the insurance underwriters. Reserves for claims are provided in amounts which management considers adequate. The Company self-insures employee health claims up to $175,000 per employee per policy year and workers' compensation claims up to $300,000 per employee per policy year and has provided reserves which management considers adequate for the Company's estimated liability for covered claims. 7. Income Taxes The liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Income tax expense (benefit) consists of the following: 35 M.S. Carriers, Inc. Notes to Consolidated Financial Statements (continued) 7. Income Taxes (continued)
Year ended December 31 1997 1996 1995 --------------------------------------------- Current: Federal $ 1,931,443 $ (3,085,513) $ 1,115,242 State 174,344 (553,032) (55,324) --------------------------------------------- 2,105,787 (3,638,545) 1,059,918 Deferred: Federal 7,173,148 9,148,595 5,273,783 State 1,192,948 1,521,307 1,052,738 --------------------------------------------- 8,366,096 10,669,902 6,326,521 --------------------------------------------- $10,471,883 $ 7,031,357 $ 7,386,439 --------------------------------------------- ---------------------------------------------
The effective tax rate varied from the statutory federal income tax rate of 35% as follows: Year ended December 31 1997 1996 1995 -------------------------------------------- Taxes at statutory rate $10,301,780 $6,814,640 $7,188,136 State income taxes, net of federal tax benefits 919,231 696,066 734,215 Other (749,128) (479,349) (535,912) -------------------------------------------- $10,471,883 $7,031,357 $7,386,439 -------------------------------------------- --------------------------------------------
Income tax payments (refunds) were approximately $351,000 in 1997, $(2,046,000) in 1996 and $6,593,000 in 1995. The Company has alternative minimum tax credit carryforwards of approximately $630,000 at December 31, 1997, which have no expiration date and which have been utilized for financial statement purposes. Significant components of the Company's deferred tax liabilities and assets as of December 31 are as follows:
1997 1996 -------------------------- Deferred tax liabilities: Property and equipment $59,234,157 $48,563,673 Other --net 1,969,673 1,774,718 -------------------------- Total deferred tax liabilities 61,203,830 50,338,391 -------------------------- Deferred tax assets: Claims payable 5,719,357 4,511,042 Other -- net 2,827,954 1,536,926 -------------------------- Total deferred tax assets 8,547,311 6,047,968 -------------------------- Net deferred tax liabilities $52,656,519 $44,290,423 -------------------------- --------------------------
8. Employee Benefit Plan The M.S. Carriers, Inc. Retirement Savings Plan (the Plan) is a defined contribution plan under Section 401(k) of the Internal Revenue Code (IRC) and provides for voluntary contributions by employees and matching contributions by the Company. All employees who are 19 years of age or older and have completed six months of service are eligible for the Plan. The Plan provides each 36 M.S. Carriers, Inc. Notes to Consolidated Financial Statements (continued) 8. Employee Benefit Plan (continued) participant with the option of contributing from 1% to 15% of the employee's annual compensation subject to IRC limitations. The Company matches the employee contribution up to 50% of the participant's contribution, but limited to a maximum of 3% of the participant's compensation. The Company's contribution to the Plan, net of forfeitures, was approximately $1,098,000 for 1997, $1,178,000 for 1996 and $1,078,000 for 1995. 9. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share:
1997 1996 1995 ------------------------------------------- Numerator: Net income available to common stockholders $18,961,773 $12,439,044 $13,151,092 ------------------------------------------- ------------------------------------------- Denominator: Weighted-average shares for basic earnings per share 12,074,140 12,123,472 12,843,326 Dilutive employee stock options 261,064 121,401 185,236 ------------------------------------------- Adjusted weighted average shares for diluted earnings per share 12,335,204 12,244,873 13,028,562 ------------------------------------------- ------------------------------------------- Basic earnings per share $ 1.57 $ 1.03 $ 1.02 ------------------------------------------- ------------------------------------------- Diluted earnings per share $ 1.54 $ 1.02 $ 1.01 ------------------------------------------- -------------------------------------------
10. Stock Options The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related Interpretations in accounting for its employee stock options because the alternative fair value accounting provided for under FASB Statement No. 123, Accounting for Stock-Based Compensation (Statement 123), requires use of option valuation models that were not developed for use in valuing employee stock options. Under APB 25, because the exercise price of the Company's employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized. The Company's Stock Option Plans (the Option Plans) provide for the granting of either qualified or nonqualified stock options. Options are subject to terms and conditions determined by the Compensation Committee of the Board of Directors. Options granted under the 1986 Incentive Stock Option Plan generally are exercisable in increments of one-third per year beginning two years from the date of grant and expire ten years from the date of grant. Options granted under the 1993 and 1996 Stock Option Plans are exercisable five years from the date of grant. Under the Option Plans, the Company may grant options to purchase up to a total of 2,600,000 shares of common stock at the prevailing market price at the date of grant. Pro forma information regarding net income and earnings per share is required by FASB Statement 123, and has been determined as if the Company had accounted 37 M.S. Carriers, Inc. Notes to Consolidated Financial Statements (continued) 10. Stock Options (continued) for its employee stock options under the fair value method of Statement 123. The fair value for the Company's options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 1997, 1996 and 1995, respectively: risk-free interest rates of 5.3% in 1997, 6.6% in 1996 and 6.5% in 1995, a volatility factor of the expected market price of the Company's common stock of .27 in 1997 and .25 in 1996 and 1995; a weighted-average expected life of the options of 7 years, and no dividend payments. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the respective options' vesting period. The Company's pro forma information follows:
Year ended December 31 1997 1996 1995 --------------------------------------- Pro forma net income $17,638,311 $11,676,648 $13,104,073 Pro forma basic earnings per share $ 1.46 $ .96 $ 1.02 Pro forma diluted earnings per share $ 1.43 $ .95 $ 1.01
Because Statement 123 applies only to stock-based compensation awards for 1995 and future years, the pro forma disclosures under Statement 123 are not likely to be indicative of future disclosures until the disclosures reflect all outstanding, nonvested awards. 38 M.S. Carriers, Inc. Notes to Consolidated Financial Statements (continued) 10. Stock Options (continued) A summary of the Company's stock option plan activity is as follows:
Number of Weighted Shares Under Average Option Exercise Price ------------------------------- Balance at January 1, 1995 627,000 $14.82 Options granted 45,000 22.61 Options canceled (18,000) 21.31 ------------------------------- Balance at December 31, 1995 654,000 15.18 Options granted 1,539,000 19.03 Options exercised (131,333) 6.11 Options canceled (365,667) 19.86 ------------------------------- Balance at December 31, 1996 1,696,000 18.37 Options granted 516,500 20.93 Options exercised (47,500) 13.93 Options canceled (429,000) 18.67 ------------------------------- Balance at December 31, 1997 1,736,000 $19.01 ------------------------------- -------------------------------
Options exercisable were 200,833, 177,999 and 229,669 at December 31, 1997, 1996 and 1995, respectively. The weighted-average fair value of options granted during 1997, 1996 and 1995 was $8.86, $8.37 and $9.82, respectively. Exercise prices for options outstanding as of December 31, 1997 ranged from $7.19 to $26.94. The following table segregates option information between ranges of exercise prices as of December 31, 1997:
Exercise Price Less Than Greater Than $10 $10 Total ---------------------------------------- Number of shares under option 132,000 1,604,000 1,736,000 Weighted-average exercise price $ 7.19 $ 19.92 $ 19.01 Weighted-average years of remaining contractual life 3.0 7.9 7.5 Exercisable options 132,000 76,833 200,833 Weighted-average exercise price of exercisable options $ 7.19 $ 21.85 $ 13.00
At December 31, 1997, the Company had reserved 685,167 shares of its common stock for issuance pursuant to stock option plans. 11. Significant Customers The Company operates primarily in one business segment, that of a truckload carrier. One customer, Sears, accounted for 10% or more of revenues in 1997, 1996, and 1995 with revenues of $59,577,000, $57,358,000 and $59,533,000, respectively. 12. Commitments and Contingencies The Company is involved in certain legal actions and claims arising in the ordinary course of business. It is the opinion of management that such litigation and claims will be resolved without material effect on the Company's financial position or results of operations. 39 M.S. Carriers, Inc. Notes to Consolidated Financial Statements (continued) 13. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value. The book value of long-term obligations, including current portion, approxi-mates fair value based on the Company's current incremental borrowing rates for similar types of borrowing arrangements. 14. Selected Quarterly Data (Unaudited) Summarized quarterly data for 1997 and 1996 follows:
1997 March 31 June 30 September 30 December 31 ------------------------------------------------------- Operating revenues $92,699,990 $101,511,950 $107,465,935 $114,254,950 Operating expenses 86,806,599 92,422,387 97,140,083 104,675,057 ------------------------------------------------------- Operating income 5,893,391 9,089,563 10,325,852 9,579,893 Other expense 1,249,589 1,397,517 1,670,508 1,137,429 ------------------------------------------------------- Income before taxes 4,643,802 7,692,046 8,655,344 8,442,464 Income taxes 1,643,822 2,790,178 3,085,265 2,952,618 ------------------------------------------------------- Net income $ 2,999.980 $4,901,868 $ 5,570,079 $ 5,489,846 ------------------------------------------------------- ------------------------------------------------------- Basic earnings per share $ .25 $ .41 $ .46 $ .45 ------------------------------------------------------- ------------------------------------------------------- Diluted earnings per share $ .25 $ .40 $ .45 $ .44 ------------------------------------------------------- -------------------------------------------------------
1996 (A) March 31 June 30 September 30 December 31 ------------------------------------------------------- Operating revenues $79,690,228 $84,267,277 $85,822,977 $90,455,101 Operating expenses 75,811,677 76,610,270 78,134,832 85,851,755 ------------------------------------------------------- Operating income 3,878,551 7,657,007 7,688,145 4,603,346 Other expense 1,132,854 1,099,724 1,044,321 1,079,749 ------------------------------------------------------- Income before taxes 2,745,697 6,557,283 6,643,824 3,523,597 Income taxes 1,020,626 2,364,097 2,387,308 1,259,326 ------------------------------------------------------- Net income $ 1,725,071 $ 4,193,186 $ 4,256,516 $ 2,264,271 ------------------------------------------------------- ------------------------------------------------------- Basic earnings per share $ .15 $ .34 $ .35 $ .19 ------------------------------------------------------- ------------------------------------------------------- Diluted earnings per share $ .15 $ .34 $ .34 $ .19 ------------------------------------------------------- ------------------------------------------------------- (A) Includes the effect of a change in accounting estimate. See note 3.
40
Schedule II Valuation and Qualifying Accounts M.S. Carriers, Inc. Column A Column B Column C Column D Column E - - ------------------------------------------------------------------------------------------------------------------- Additions Charged Charged Balance at to to Balance at Beginning Costs and Other End Description Of Period Expenses Accounts Deductions Of Period - - ------------------------------------------------------------------------------------------------------------------- Year ended December 31, 1997 Deducted from asset accounts: Allowance for doubtful accounts receivable $514,610 $1,268,497 $285,456 (1) $1,497,651 Year ended December 31, 1996 Deducted from asset accounts: Allowance for doubtful accounts receivable $508,919 $ 400,000 $394,309 (1) $ 514,610 Year ended December 31, 1995 Deducted from asset accounts: Allowance for doubtful accounts receivable $492,400 $ 202,176 $185,657 (1) $ 508,919 (1) Uncollectible accounts written off, net of recoveries.
41 Exhibit 21 Subsidaries of M.S. Carriers, Inc. Jurisdiction of Subsidiary Incorporation --------------- M.S. Carriers Warehousing & Distribution, Inc. Tennessee M.S. Nationwide, Inc. (inactive) Tennessee M.S. Carriers Logistics Mexico, S.A. de C.V. Mexico M.S. International, Inc. Nevada M.S. Global, Inc. Nevada 42 EX-27 2 ART. 5 FINANCIAL DATA SCHEDULES FOR 10-K
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1997, AND THE RELATED CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR DECEMBER 31, 1997, AND THE NOTES RELATED THERETO AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. YEAR DEC-31-1997 DEC-31-1997 351,919 0 46,048,967 1,497,651 0 60,491,348 403,261,549 106,090,776 362,246,461 46,794,839 79,977,266 122,106 0 0 177,390,837 362,246,461 0 415,932,825 0 381,044,126 0 0 5,775,020 29,433,656 10,471,883 18,961,773 0 0 0 18,961,773 1.57 1.54
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