-----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, InfFTUaXRSUfTdzfH5xjahQSNbASJExxCoQDpLKSEKeK8bsDYdufOBdIwr90Ig6j 2JabP+pDsO2UjYJosYr/Uw== 0000790372-97-000006.txt : 19970520 0000790372-97-000006.hdr.sgml : 19970520 ACCESSION NUMBER: 0000790372-97-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 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: 97607980 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 March 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 No.) 3171 Director's 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 March 31, 1997 - 12,009,633 - 1 - M.S. Carriers, Inc. Index to Form 10-Q Contents Part I - Financial Information Item I - Financial Statements (Unaudited) Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996.... 3 Consolidated Statements of Income for the Three Months Ended March 31, 1997 and 1996................................................. 5 Consolidated Statement of Stockholders' Equity for the Three Months Ended March 31, 1997............................................. 6 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1996................................................. 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................................. 12 Signatures................................................................ 14 - 2 - PART I - Financial Information Item 1. Financial Statements (unaudited) M.S. Carriers, Inc. and Subsidiaries Consolidated Balance Sheets
March 31 December 31 1997 1996 _________________________________________ (Unaudited) Assets Current assets: Cash and cash equivalents $ 602,356 $ 1,153,993 Accounts receivable: Trade, net 38,963,073 33,018,388 Officers and employees 1,029,981 1,506,247 _______________________________________ 39,993,054 34,524,635 Recoverable income taxes 5,092,196 5,870,263 Deferred income taxes 3,811,000 3,755,000 Prepaid expenses and other 7,299,704 4,898,183 _______________________________________ Total current assets 56,798,310 50,202,074 Property and equipment: Land and land improvements 6,147,876 6,110,279 Buildings 30,128,055 30,128,055 Revenue equipment 266,800,408 260,026,924 Service equipment and other 37,110,862 37,014,110 Construction in progress 144,391 177,218 _______________________________________ 340,331,592 333,456,586 Accumulated depreciation and amortization 95,092,201 96,240,862 _______________________________________ 245,239,391 237,215,724 Other assets 3,639,128 3,243,916 _______________________________________ Total assets $305,676,829 $290,661,714 _______________________________________ _______________________________________
See accompanying notes. - 3 - M.S. Carriers, Inc. and Subsidiaries Consolidated Balance Sheets (continued)
March 31 December 31 1997 1996 _________________________________________ (Unaudited) Liabilities and stockholders' equity Current liabilities: Trade accounts payable $ 5,072,174 $ 7,288,149 Accrued expenses 12,691,278 9,733,798 Claims payable 11,749,113 11,694,210 Current maturities of long-term debt 13,183,947 14,315,462 _____________________________________ Total current liabilities 42,696,512 43,031,619 Long-term debt, less current maturities 56,850,619 45,373,288 Deferred income taxes 48,918,334 48,045,423 Stockholders' equity: Common stock, $.01 par value, 120,096 120,096 Authorized shares - 20,000,000 Issued and outstanding shares - 12,009,633 at March 31, 1997 and at December 31, 1996 Additional paid-in capital 59,959,590 59,959,590 Retained earnings 99,135,332 96,135,352 Cumulative translation adjustments (2,003,654) (2,003,654) _______________________________________ Total stockholders' equity 157,211,364 154,211,384 Total liabilities and stockholders' equity $305,676,829 $290,661,714 ________________________________________ ________________________________________
See accompanying notes. - 4 - M.S. Carriers, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited)
Three Months Ended March 31 1997 1996 ___________________________________________ Operating revenues $ 92,699,990 $ 79,690,228 Operating expenses: Salaries, wages and benefits 31,566,921 31,272,571 Operations and maintenance 17,720,060 16,411,632 Taxes and licenses 2,470,530 2,394,767 Insurance and claims 4,293,679 4,297,390 Communications and utilities 1,254,897 1,357,231 Depreciation and amortization 9,378,652 9,459,154 Gain on disposals of revenue equipment (87,590) (459,016) Rent and purchased transportation 19,686,370 10,588,490 Other 523,080 489,458 ______________________________________ 86,806,599 75,811,677 ______________________________________ Operating income 5,893,391 3,878,551 Other expense (income): Interest expense 1,203,973 1,288,474 Other 45,616 (155,620) _______________________________________ 1,249,589 1,132,854 _______________________________________ Income before income taxes 4,643,802 2,745,697 Income taxes 1,643,822 1,020,626 _______________________________________ Net income $ 2,999,980 $ 1,725,071 _______________________________________ _______________________________________ Common shares and common stock equivalents 12,096,982 12,456,183 Earnings per share $0.25 $0.14 _______________________________________ _______________________________________
See accompanying notes. - 5 - M.S. Carriers, Inc. and Subsidiaries Consolidated Statement of Stockholders' Equity (Unaudited) Three Months Ended March 31, 1997
Additional Cumulative Common Stock Paid-In Retained Translation Shares Amount Capital Earnings Adjustments Total __________________________________________________________________________ Balance at January 1, 1997 12,009,633 $120,096 $59,959,590 $96,135,352 $(2,003,654) $154,211,384 Net Income 2,999,980 2,999,980 _______________________________________________________________________________________________ Balance at March 31, 1997 12,009,633 $120,096 $59,959,590 $99,135,332 $(2,003,654) $157,211,364 _______________________________________________________________________________________________ _______________________________________________________________________________________________
See accompanying notes. - 6 - M.S. Carriers, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31 1997 1996 ___________________________________________ Operating activities Net income $ 2,999,980 $ 1,725,071 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 9,378,652 9,459,154 Gain on disposals of revenue equipment (87,590) (459,016) Other 75,087 79,249 Deferred income taxes 816,911 502,063 Changes in operating assets and liabilities: Accounts receivable (5,468,419) (2,523,091) Current and other assets (2,093,753) (1,405,987) Trade accounts payable (2,215,975) 2,147,359 Other current liabilities 3,012,383 (1,673,866) _______________________________________ Net cash provided by operating activities 6,417,276 7,850,936 Investing activities Purchases of property and equipment (24,141,515) (7,606,375) Proceeds from disposals of property and equipment 6,826,786 1,893,560 _______________________________________ Net cash used in investing activities (17,314,729) (5,712,815) Financing activities Proceeds from revolving line of credit and long-term debt 50,659,000 29,375,769 Proceeds from issuance of common stock 554,584 Repurchase of common stock (4,301,250) Principal payments on revolving line of credit and long-term debt (40,313,184) (27,083,791) _______________________________________ Net cash provided by (used in) financing activities 10,345,816 (1,454,688) _______________________________________ Increase (decrease) in cash and cash equivalents (551,637) 683,433 Cash and cash equivalents at beginning of period 1,153,993 486,459 _______________________________________ Cash and cash equivalents at end of period $ 602,356 $ 1,169,892 _______________________________________ _______________________________________
See accompanying notes. - 7 - M.S. Carriers, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) March 31, 1997 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 three month period ended March 31, 1997 are not necessarily indicative of the results that may be expected for the year ended December 31, 1997. 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, 1996. 2. Net Income Per Common Share Three Months Ended March 31 1997 1996 ____________________________________ Average common shares outstanding 12,009,633 12,295,149 Common stock equivalents 87,349 161,034 ____________________________________ Average common shares and common stock equivalents 12,096,982 12,456,183 ____________________________________ ____________________________________ Net income $ 2,999,980 $ 1,725,071 ____________________________________ ____________________________________ Net income per common and equivalent share $ 0.25 $ 0.14 ____________________________________ ____________________________________ - 8 - 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 March 31 1997 1996 ___________________________________ Operating revenues 100.0% 100.0% Operating expenses: Salaries, wages and benefits 34.0% 39.2% Operations and maintenance 19.1% 20.6% Taxes and licenses 2.7% 3.0% Insurance and claims 4.6% 5.4% Communications and utilities 1.4% 1.7% Depreciation and amortization 10.1% 11.9% Gain on disposals of revenue equipment (0.1%) (0.6%) Rent and purchased transportation 21.2% 13.3% Other 0.6% 0.6% __________________________________ Total operating expenses 93.6% 95.1% __________________________________ Operating income 6.4% 4.9% Interest expense 1.3% 1.6% Other expense (income) 0.1% (0.2%) __________________________________ Income before income taxes 5.0% 3.5% Income taxes 1.8% 1.3% __________________________________ Net income 3.2% 2.2% __________________________________ __________________________________ - 9 - Results of Operations Operating revenues for the first three months of 1997 increased $13 million, or 16.3%, to $92.7 million compared with $79.7 million for the same period in the prior year. The Company's increase in revenues was due primarily to increased capacity and increased logistic revenues. The Company's fleet increased to 2,602 tractors at March 31, 1997 from 2,288 at March 31, 1996, an increase of 314 tractors. The sources of the Company's revenues were as follows: Three Months Ended March 31 1997 1996 ___________________________________ (in thousands) Domestic Linehaul $ 44,678 $ 40,037 Interline Service - Mexico 7,516 7,657 Dedicated 6,601 6,324 Regional 27,329 21,341 Logistics 6,576 4,331 ______________________ Total $ 92,700 $ 79,690 ______________________ ______________________ Revenues per mile were $1.20 for the first quarter of 1997 compared to $1.23 for the first quarter of 1996, due to a decrease in the average loaded rate per mile experienced by the Company. The decline in the average loaded rate per mile corresponds with the average length of haul increasing to 600 miles in the first quarter of 1997 from 529 miles in the first quarter of 1996. The operating ratio (operating expenses as a percentage of revenues) for the first three months of 1997 was 93.6% compared to 95.1% for the same period of 1996. Salaries, wages and benefits decreased to 34.0% of operating revenues for the three month period ending March 31, 1997 from 39.2% for the same period in 1996, due primarily to the increased use of owner-operators. Operations and maintenance expenses decreased to 19.1% of operating revenues for the three month period ending March 31, 1997 from 20.6% for the same period in 1996. This decrease was due primarily from the increased use of owner-operators by the Company. - 10 - Insurance and claims decreased to 4.6% of operating revenues for the three month period ending March 31, 1997 from 5.4% for the same period of 1996. This decrease was due to adjustments made in the first quarter 1996 to reflect increased liability related to claims incurred in prior periods. Depreciation and amortization was 10.1% and 11.9% of operating revenues for the first three months of 1997 and 1996, respectively. The decrease was primarily attributable to the increased use of owner-operators. Rent and purchased transportation increased to 21.2% of operating revenues in the first three months of 1997 compared to 13.3% for the same period in 1996 primarily as a result of the increased use of owner-operators by the Company and increased expense relating to logistic operations. The Company had 588 owner-operators at March 31, 1997 compared to 270 at March 31, 1996. Interest expense was $1,203,973 for the first quarter of 1997 compared to $1,288,474 for the same period in 1996. The decrease in interest expense was due primarily to the amount of structured debt obligations at higher interest rates outstanding during the first quarter of 1997 being significantly less than the amount of such debt outstanding during the same period of 1996. The average debt outstanding was higher during the first quarter of 1997 as compared to the first quarter of 1996. Liquidity and Capital Resources The Company's business has required significant investment in new equipment and office and terminal facilities, historically financed through cash from operations, secured borrowings, unsecured credit facilities and capital markets. During the three month period ending March 31, 1997, the Company had expenditures, net of sales, of $17.3 million for purchases of property and equipment. The Company funded these purchases of property and equipment through cash on hand, cash from operations and the Company's bank line of credit. Net cash provided by operating activities was $6.4 million and net cash provided by financing activities was $10.3 million. The Company has a bank line of credit providing for borrowings of up to $48.5 million, with interest at the lower of the bank's corporate prime rate or the 30-day LIBOR rate plus .45%. At March 31, 1997 there was $39.3 million 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 planned revenue equipment purchases through cash from operations, the Company's bank line of credit and secured borrowings. In the future, the Company will continue to have significant capital requirements, which may require the Company to seek additional borrowings or to access capital markets. The - 11 - availability of debt financing or equity capital will depend upon the Company's financial condition and results of operations as well as prevailing market conditions and other factors over which the Company has little or no control. 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 first quarter of 1997. 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 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). - 12 - 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. 10.7 1993 Incentive Plan for Designated Incorporated by reference Key Employees from exhibits to the registrant's 2nd Quarter 1995 Form 10-Q. 10.8 1996 Stock Option Plan Incorporated by reference from registrant's Proxy Statement dated April 4, 1996 - 13 - 11 Statement regarding computation of 8 per share earnings 27 Financial Data Schedule NOT INCLUDED WITH PAPER FILING (b) On February 13, 1997, the Company filed a Form 8-K which contained copies of the slides used by Michael S. Starnes, the Company's chief executive officer, during his presentation to the Seventh Annual Transportation Conference given on the same date. - 14 - 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) Date: May 15, 1997 s/ Daniel P. Goodspeed Daniel P. Goodspeed, Controller (Chief Accounting Officer of the Company) - 15 - EX-27 2 ART. 5 FINANCIAL DATA SCHEDULES FOR 1ST QTR 10-Q FOR 1997
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AS OF MARCH 31, 1997, AND THE RELATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1997, AND THE NOTES RELATED THERETO AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 602,356 0 39,530,646 567,573 0 56,798,310 340,331,592 95,092,201 305,676,829 42,696,512 56,850,619 120,096 0 0 157,091,268 305,676,829 0 92,699,990 0 86,806,599 0 0 1,203,973 4,643,802 1,643,822 2,999,980 0 0 0 2,999,980 .25 .25
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