-----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, LIVLmjwZzpFQMrBC/c8aEyfgW0GRLA2tczfDjH91aVTL/XMmAeMr/taOB7RiltPL OAdoVF3WT6wbxB3p9tpKJw== 0000790372-95-000012.txt : 19951119 0000790372-95-000012.hdr.sgml : 19951119 ACCESSION NUMBER: 0000790372-95-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MS CARRIERS INC CENTRAL INDEX KEY: 0000790372 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 621014070 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14781 FILM NUMBER: 95589580 BUSINESS ADDRESS: STREET 1: 3171 DIRECTORS ROW STREET 2: P O BOX 30788 CITY: MEMPHIS STATE: TN ZIP: 38131 BUSINESS PHONE: 9013322500 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1995 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 No.) 3171 Directors Row, Memphis, TN 38131 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (901) 332-2500 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: Outstanding common shares at October 1, 1995 - 12,878,300 M.S. Carriers, Inc. Index to Form 10-Q Contents Part I - Financial Information Item 1 - Financial Statements (Unaudited) Balance Sheets as of September 30, 1995 and December 31, 1994............ 3 Statements of Income for the Three Months Ended September 30, 1995 and 1994 and the Nine Months Ended September 30, 1995 and 1994......... 5 Statement of Stockholders' Equity for the Nine Months Ended September 30, 1995...................................................... 6 Statements of Cash Flows for the Nine Months Ended September 30, 1995 and 1994............................................. 7 Notes to Financial Statements............................................. 8 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations..................................... 9 Part II - Other Information Item 1 - Legal Proceedings................................................ 12 Item 2 - Changes in Securities............................................ 12 Item 3 - Defaults Upon Senior Securities.................................. 12 Item 4 - Submission of Matters to a Vote of Security Holders.............. 12 Item 5 - Other Information................................................ 12 Item 6 - Exhibits and Reports on Form 8-K................................. 13 Signatures................................................................ 14 PART I - FINANCIAL INFORMATION Item 1. Financial Statements M.S. Carriers, Inc. and Subsidiaries Consolidated Balance Sheets
September 30 December 31 1995 1994 _________________________________________ (Unaudited) Assets Current assets: Cash and cash equivalents $ 3,360,502 $ 30,806,731 Accounts receivable: Trade, net 29,848,721 33,327,599 Officers and employees 834,426 457,165 ____________ ____________ 30,683,147 33,784,764 Recoverable income taxes 389,481 Deferred income taxes 5,515,000 4,774,000 Prepaid expenses and other 5,481,912 4,419,081 ____________ ____________ Total current assets 45,430,042 73,784,576 Property, plant and equipment: Land and land improvements 6,221,980 6,201,674 Buildings 24,432,584 23,393,800 Revenue equipment 253,731,203 232,771,820 Service equipment and other 32,918,239 28,531,425 Construction in progress 7,416,168 2,813,438 ____________ ____________ 324,720,174 293,712,157 Accumulated depreciation and amortization 96,431,237 95,019,410 ____________ ____________ 228,288,937 198,692,747 Other assets 4,163,333 3,595,196 ____________ ____________ Total assets $277,882,312 $276,072,519 ____________ ____________ ____________ ____________
M.S. Carriers, Inc. and Subsidiaries Consolidated Balance Sheets (continued)
September 30 December 31 1995 1994 _________________________________________ (Unaudited) Liabilities and stockholders' equity Current liabilities: Trade accounts payable $ 5,728,510 $ 6,341,525 Accrued expenses 8,851,296 8,277,724 Claims payable 14,113,156 12,325,226 Incomes taxes payable 1,256,186 Current maturities of long-term debt 17,101,569 16,693,512 ____________ ____________ Total current liabilities 45,794,531 44,894,173 Long-term debt, less current maturities 38,339,181 51,186,613 Deferred income taxes 35,659,445 32,068,000 Stockholders' equity: Common stock, $.01 par value, Authorized shares - 20,000,000 128,783 128,783 Issued and outstanding shares - 12,878,300 in 1995 and 1994 Additional paid-in capital 64,137,909 64,137,909 Retained earnings 95,211,549 84,842,041 Equity adjustment from foreign currency translation (1,389,086) (1,185,000) ____________ ____________ Total stockholders' equity 158,089,155 147,923,733 Total liabilities and stockholders' equity $277,882,312 $276,072,519 ____________ ____________ ____________ ____________
See accompanying notes. M.S. Carriers, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited)
Three Months Ended Nine Months Ended September 30 September 30 1995 1994 1995 1994 ____________________________________________________________ Operating revenues $ 84,326,406 $ 80,303,567 $250,568,876 $210,294,598 Operating expenses: Salaries, wages and benefits 32,533,431 29,679,173 94,997,826 80,734,181 Operations and maintenance 17,001,491 16,101,324 50,830,687 47,473,628 Taxes and licenses 2,514,021 2,226,907 7,603,309 6,321,129 Insurance and claims 4,018,213 3,982,140 11,674,408 10,483,319 Communications and utilities 1,678,114 1,116,205 4,680,409 3,182,513 Depreciation and amortization 9,818,082 8,731,535 29,015,451 24,552,950 Rent and purchased transportation 11,215,610 8,601,915 30,987,300 14,716,243 Other 621,009 577,421 1,769,219 1,533,749 ____________ ____________ ____________ ____________ $ 79,399,971 $ 71,016,620 $231,558,609 $188,997,712 ____________ ____________ ____________ ____________ Operating income 4,926,435 9,286,947 19,010,267 21,296,886 Other expense (income): Interest expense 1,008,931 487,425 2,942,070 1,216,978 Other (92,953) (13,493) (156,811) (75,756) ____________ ____________ ____________ ____________ 915,978 473,932 2,785,259 1,141,222 ____________ ____________ ____________ ____________ Income before income taxes 4,010,457 8,813,015 16,225,008 20,155,664 Income taxes 1,429,377 3,463,000 5,855,500 7,966,000 ____________ ____________ ____________ ____________ Net income $ 2,581,080 $ 5,350,015 $ 10,369,508 $ 12,189,664 ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ Earnings per share $0.20 $0.41 $0.79 $0.93 ____________ ____________ ___________ ___________ ____________ ____________ ___________ ___________
See accompaning notes. M.S. Carriers, Inc. and Subsidiaries Consolidated Statement of Stockholders' Equity (Unaudited) Nine Months Ended September 30, 1995
Equity Adjustment From Additional Foreign Common Stock Paid-In Retained Currency Shares Amount Capital Earnings Translation 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 10,369,508 10,369,508 Equity Adjustment from Foreign Currency Translation (204,086) (204,086) __________________________________________________________________________ Balance at September 30, 1995 12,878,300 $128,783 $64,137,909 $95,211,549 $ (1,389,086) $158,089,155 __________________________________________________________________________ __________________________________________________________________________
See accompanying notes. M.S. Carriers, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30 1995 1994 ___________________________________________ Operating activities Net income $ 10,369,508 $ 12,189,664 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 29,015,451 24,552,950 Loss on disposals of property and equipment 117,008 Provision for losses on accounts receivable 170,950 Other 161,648 Provision for deferred income taxes 2,850,445 4,696,000 Changes in operating assets and liabilities: Accounts receivable 3,101,617 (8,753,582) Current and other assets (2,449,798) 1,280,754 Trade accounts payable (613,015) 1,171,140 Other current liabilities 1,105,316 4,930,043 _____________ ____________ 33,171,664 28,165,263 _____________ ____________ Net cash provided by operating activities 43,541,172 40,354,927 Investing activities Purchases of property, plant and equipment (59,033,026) (58,588,483) Proceeds from disposals of property and equipment 485,000 1,304,272 _____________ ____________ Net cash used in investing activities (58,548,026) (57,284,211) Financing activities Proceeds from revolving line of credit and long-term debt 68,257,716 Proceeds from issuance of Common Stock 19,183 Principal payments on revolving line of credit and long-term debt (12,439,375) (51,341,716) _____________ _____________ Net cash provided by (used in) financing activities (12,439,375) 16,935,183 _____________ _____________ Increase (decrease) in cash and cash equivalents (27,446,229) 5,899 Cash and cash equivalents at beginning of period 30,806,731 110,080 _____________ _____________ Cash and cash equivalents at end of period $ 3,360,502 $ 115,979 _____________ ______________ _____________ ______________
See accompanying notes. M.S. Carriers, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) September 30, 1995 1. Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended September 30, 1995 are not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information and a listing of the Company's significant accounting policies, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1994. 2. Net Income Per Common Share
Three Months Ended Nine Months Ended September 30 September 30 1995 1994 1995 1994 _________________________________________________________ Average common shares outstanding 12,878,300 12,878,300 12,878,300 12,878,300 Common stock equivalents 176,828 219,691 193,660 220,651 ____________ ____________ ____________ ___________ Average common shares and common stock equivalents 13,055,128 13,097,991 13,071,960 13,098,951 ____________ ____________ ____________ ___________ ____________ ____________ ____________ ___________ Net income $ 2,581,080 $ 5,350,015 $ 10,369,508 $12,189,664 ____________ ____________ ____________ ___________ ____________ ____________ ____________ ___________ Net income per common and equivalent share $0.20 $0.41 $0.79 $0.93 ____________ ____________ ____________ ___________ ____________ ____________ ____________ ___________
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following table sets forth the percentage relationship of revenue and expense items to operating revenues for the periods indicated.
Percentage of Operating Revenues Three Months Ended Nine Months Ended September 30 September 30 1995 1994 1995 1994 ____________________________________________________________ Operating revenues 100.0% 100.0% 100.0% 100.0% Operating expenses: Salaries, wages and benefits 38.6 37.0 37.9 38.4 Operations and maintenance 20.2 20.0 20.3 22.6 Taxes and licenses 3.0 2.8 3.0 3.0 Insurance and claims 4.8 5.0 4.6 5.0 Communications and utilities 2.0 1.4 1.9 1.5 Depreciation and amortization 11.6 10.8 11.6 11.7 Rent and purchased transportation 13.3 10.7 12.4 7.0 Other 0.7 0.7 0.7 0.7 ____________ ____________ ____________ ____________ Total operating expenses 94.2 88.4 92.4 89.9 ____________ ____________ ____________ ____________ Operating income 5.8 11.6 7.6 10.1 Interest expense (1.2) (0.6) (1.2) (0.6) Other income 0.1 --- 0.1 0.1 ____________ ____________ ____________ ____________ Income before income taxes 4.7 11.0 6.5 9.6 Income taxes 1.7 4.3 2.4 3.8 ____________ ____________ ____________ ____________ Net income 3.0% 6.7% 4.1% 5.8% ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________
Results of Operations Operating revenues for the first nine months of 1995 increased 19% over the same period in the prior year. For the quarter ended September 30, 1995, operating revenues increased 5% over the same quarter of 1994. The Company's growth in revenues slowed during the quarter ended September 30, 1995, as a result of softness in the markets which the Company serves as well as increased competition from other carriers. Management expects its revenue growth to continue to be slowed during the remaining months of 1995. The operating ratio (operating expenses as a percent of operating revenues) for the first nine months of 1995 was 92.4% compared to 89.9% for the same period in 1994 and was 94.2% for the third quarter of 1995 compared to 88.4% for the same period in 1994. Salaries, wages and benefits increased to 38.6% of operating revenues for the three-month period ended September 30, 1995 from 37.0% for the same period in 1994, due primarily to a wage increase for drivers which was implemented in the fourth quarter of 1994. However, salaries, wages and benefits as a percentage of operating revenues for the nine-month period ended September 30, 1995 was 37.9% compared to 38.4% for the nine-month period ended September 30, 1994. This decrease for the nine-month period is due to the Company's increased use of owner-operators during 1995. The utilization of owner-operators results in operating revenues and the amounts paid to owner-operators are recorded as purchased transportation. Operations and maintenance decreased to 20.3% of operating revenues for the nine-month period ended September 30, 1995 from 22.6% for the nine-month period ended September 30, 1994, due primarily to the increased use of owner- operators. The Company began increasing its use of owner-operators during the third quarter of 1994. Rent and purchased transportation increased to 12.4% and 13.3%, respectively, for the nine-month and three-month periods ended September 30, 1995 from 7.0% and 10.7%, respectively, for the same periods ended September 30, 1994. These increases resulted from the increased use of owner-operators and the expansion of the Company's logistic operations. The increase in interest expense is due to the increase in outstanding debt during the nine-month and three-month periods ended September 30, 1995 compared to the same periods in 1994. The effective tax rates were 36.1% and 39.5% for the nine-month period ended September 30, 1995 and 1994, respectively. This decrease was due to reduced state income taxes and tax benefits from leasing transactions. Liquidity and Capital Resources The continued growth of the Company's business has required significant investments in new revenue equipment and office and terminal facilities, historically financed through cash from operations, secured borrowings, unsecured credit facilities, and capital markets. During the nine-month period ending September 30, 1995, the Company expended in excess of $58,000,000 for purchases of property, plant and equipment funded solely through cash from operations and cash on hand at December 31, 1994. During this same period, the Company reduced its long-term debt by approximately $12,400,000. At September 30, 1995, the Company had obligations of approximately $55,000,000 related to purchases of revenue equipment. The Company has a bank line of credit providing for borrowings of up to $10,000,000, with interest at the lower of the bank's corporate prime rate or the 30-day LIBOR rate plus .45%. At September 30, 1995 there were no amounts outstanding under this line of credit. Management expects to maintain this line of credit for an indefinite period. The Company expects to finance its normal operating requirements and future revenue equipment purchases through cash from operations and secured borrowings. PART II - Other Information Item 1. Legal Proceedings The Company is involved in certain ordinary routine litigation incidental to its business. The Company does not expect that the outcome of any of these proceedings will have a material adverse effect upon the Company's operations or its financial position. Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of security holders during the third quarter of 1995. Item 5. Other Information None Item 6 - Exhibits and Reports on Form 8-K (a) The exhibits filed as a part of this report are listed below: Exhibit Number Description of Exhibit _____________________________________________________________________________ 3A Restated Charter of M.S. Carriers, Inc.* 3B Articles of Amendment to Charter of M.S. Carriers, Inc.** 3C Amended and Restated By-Laws of M.S. Carriers, Inc.** 10A Incentive Stock Option Plan* 10B Amendment to Incentive Stock Option Plan* 10C 1993 Stock Option Plan** 10D Non-Employee Directors Stock Option Plan*** 10E Employment Agreements with James W. Welch, M.J. Barrow and Robert P. Hurt* 10F Employment Agreement with Michael S. Starnes**** 10G Employment Agreement with Carl J. Mungenast**** 10H 1993 Incentive Plan for Designated Key Employees**** 11 Statement regarding computation of per share earnings - see Note 2 of the notes to financial statements included in Part I - Financial Information 27 Financial Data Schedule * Incorporated by reference from exhibits to the Registrant's Registration Statement on Form S-1 (Registration Number 33-12070). ** Incorporated by reference from exhibits to the Registrant's Registration Statement on Form S-3 (Registration Number 33-63280). *** Incorporated by reference from Registrant's Proxy Statement dated March 31, 1995. **** Incorporated by reference from exhibits to the Registrant's 2nd Quarter 1995 Form 10-Q. b) The Company did not file any reports on Form 8-K during the three months ended September 30, 1995. 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. M.S. Carriers, Inc. (Registrant) November 10, 1995 Dwight Bassett Date Dwight Bassett, Controller (Chief Accounting Officer of the Company) EX-27 2 ART. 5 FINANCIAL DATA SCHEDULES FOR 3RD QTR 10-Q FOR 1995
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AS OF SEPTEMBER 30, 1995, AND THE RELATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995, AND THE NOTES RELATED THERETO AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1995 JUL-01-1995 SEP-30-1995 3,360,502 0 30,482,136 633,415 0 45,430,042 324,720,174 96,431,237 277,882,312 45,794,531 38,339,181 128,783 0 0 157,960,372 277,882,312 0 84,326,406 0 79,399,971 0 0 1,008,931 4,010,457 1,429,377 2,581,080 0 0 0 2,581,080 .20 .20
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