-----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, M4Z1JGnG92sySbhURRuzCcPjFsoFMjNIfQWevPyufSB4x/2vh6ZS1leQIbTV51ye bBlHub5S0oMRYqdY+MOvLQ== 0000793765-96-000019.txt : 19960514 0000793765-96-000019.hdr.sgml : 19960514 ACCESSION NUMBER: 0000793765-96-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960329 FILED AS OF DATE: 19960513 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: KLLM TRANSPORT SERVICES INC CENTRAL INDEX KEY: 0000793765 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 640412551 STATE OF INCORPORATION: DE FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14759 FILM NUMBER: 96562161 BUSINESS ADDRESS: STREET 1: 3475 LAKELAND DR CITY: JACKSON STATE: MS ZIP: 39288 BUSINESS PHONE: 6019392545 MAIL ADDRESS: STREET 1: P.O.BOX 6098 CITY: JACKSON STATE: MS ZIP: 39288 10-Q 1 QUARTERLY REPORT FOR QUARTER ENDING 3/29/96 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 Period Ended March 29, 1996 Commission File Number 0-14759 KLLM TRANSPORT SERVICES, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Delaware (I.R.S. Employer Identification No.64-0412551) Post Office Box 6098 Jackson, Mississippi 39288 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (601) 939-2545 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No 4,358,653 Common Shares were outstanding as of March 29, 1996. KLLM TRANSPORT SERVICES, INC. AND SUBSIDIARIES INDEX Page Number PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Balance Sheets March 29, 1996 (Unaudited) and December 29, 1995 1 Consolidated Statements of Earnings (Unaudited) Thirteen weeks ended March 29, 1996 and March 31, 1995 2 Condensed Consolidated Statements of Cash Flows (Unaudited) Thirteen weeks ended March 29, 1996 and March 31, 1995 3 Notes to Condensed Consolidated Financial Statements (Unaudited) 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 PART II. OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K 7 KLLM TRANSPORT SERVICES, INC AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
March 29, December 29, 1996 1995 ___________________________________ (Unaudited) (Note) (In Thousands) ASSETS Current assets: Cash and cash equivalents $0 $0 Accounts receivable $30,296 $27,787 Inventories - at cost 1,323 1,315 Prepaid expenses: Tires 3,801 4,096 Other 5,320 3,809 Deferred income taxes 1,940 1,940 _________ _________ Total current assets 42,680 38,947 Property and equipment 178,683 179,568 Less accumulated depreciation (60,368) (57,304) ________ _________ 118,315 122,264 Intangible assets, net (Note B) 2,535 2,626 Other assets 385 411 _______ _________ $163,915 $164,248 ========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable to banks $3,069 $2,758 Accounts payable and accrued expenses 15,123 13,076 Current maturities of long-term debt and capital leases 4,812 5,937 ______ _______ Total current liabilities 23,004 21,771 Long-term debt and capital leases, less current maturities 58,414 59,594 Deferred income taxes 16,915 16,915 Stockholders' equity: Preferred Stock, $.01 value; authorized 5,000,000 shares; none issued Common Stock, $1 par value; 10,000,000 shares authorized; issued shares - 4,552,219 in 1996 and 1995, respectively; outstanding shares - 4,358,653 in 1996 and 1995,respectively. 4,552 4,552 Additional paid-in capital 32,815 32,815 Retained earnings 30,301 30,687 ________ _________ 67,668 68,054 Less Common Stock in Treasury, at cost, 193,566 shares in 1996 and 1995, respectively. (2,086) (2,086) ________ _________ Total stockholders' equity 65,582 65,968 ________ _________ $163,915 $164,248 ======== ==========
Note: The balance sheet at December 29, 1995 has been derived from the audited financial statements at the date indicated, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying notes. KLLM TRANSPORT SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
Thirteen Weeks Ended March 29, March 31, 1996 1995 (In Thousands, Except Per Share Amounts) OPERATING REVENUE $63,736 $53,423 OPERATING EXPENSES: Salaries, wages and fringe benefits 18,707 15,624 Operating supplies and expenses 18,033 14,614 Insurance, claims, taxes and licenses 2,925 2,670 Depreciation and amortization 5,677 5,460 Purchased transportation and equipment rent 15,686 10,722 Other 2,305 2,503 Gain on sale of revenue equipment (204) (521) ________ ________ TOTAL OPERATING EXPENSES 63,129 51,072 ======== ======== OPERATING INCOME FROM CONTINUING OPERATIONS 607 2,351 Interest and other income (6) 0 Interest expense 1,268 1,362 ________ _______ 1,262 1,362 ________ _______ EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (655) 989 Income taxes (249) 370 ________ _______ NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS ($406) $619 INCOME (LOSS) FROM OPERATIONS OF DISCONTINUED DIVISION (Net of tax expense (benefits) of $0 in 1996 and ($107) in 1995) ($189) INCOME (LOSS) ON DISPOSAL OF DISCONTINUED DIVISION (Net of tax expense (benefit) of $13 in 1996 and $0 in 1995) 20 ______________________________ NET EARNINGS (LOSS) ($386) $430 ============================== EARNINGS (LOSS) PER SHARE: From Continuing Operations ($0.09) $0.14 From Operations of Discontinued Division 0.00 (0.04) From Disposal of Discontinued Division 0.00 0.00 ______________________________ NET EARNINGS (LOSS) PER COMMON SHARE ($0.09) $0.10 ==============================
See accompanying notes. KLLM TRANSPORT SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Thirteen Weeks Ended March 29, March 31, 1996 1995 ______________________ (In Thousands) NET CASH PROVIDED BY OPERATING ACTIVITIES $3,592 $3,902 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (2,972) (4,817) Proceeds from disposition of equipment 1,375 3,270 ________ _______ NET CASH FLOWS USED IN INVESTING ACTIVITIES (1,597) (1,547) ________ _______ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 0 244 Net increase (decrease) in borrowings under revolving line of credit (1,000) 0 Repayment of long-term debt and capital leases (1,778) (301) Net change in borrowings under working capital line of credit 783 (3,490) _______ _______ NET CASH FLOWS (USED) PROVIDED BY FINANCING ACTIVITIES (1,995) (3,547) _______ _______ Net Decrease in Cash and Cash Equivalents 0 (1,192) Cash and Cash Equivalents at Beginning Of Period 0 1,352 _______ _______ Cash and Cash Equivalents at End Of Period $0 $160 ======== ========
See accompanying notes. KLLM TRANSPORT SERVICES, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A- BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. They have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and accordingly, 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. In March 1995, the FASB issued Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Statement 121 also addresses the accounting for long-lived assets that are expected to be disposed of. The Company adopted Statement 121 in the first quarter of 1996 and, based on current circumstances, believes the adoption is not material. NOTE B - ACQUISITION OF CORPORATION Effective May 1, 1995, the Company acquired substantially all of the assets of Vernon Sawyer, Inc., a regional dry-van truckload carrier based in Bastrop, Louisiana. Prior operations of Vernon Sawyer, Inc. are immaterial to the Company's revenue, net earnings and earnings per share for the periods ended September 29, 1995 and December 30, 1994. NOTE C - FISCAL YEAR The Company has adopted a fiscal year-end on the Friday nearest December 31. Accordingly, the first quarter of 1996 ended on Friday, March 29, 1996. NOTE D - COMMITMENTS AND CONTINGENCIES During 1995, the Company entered into certain operating leases for revenue equipment with an average annual minimum rental payment of $4,057,000 through 1999. The Company is involved in various claims and routine litigation incidental to its business. Management is of the opinion that the outcome of these matters will not have a material adverse effect on the consolidated financial position or results of consolidated operations of the Company. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources KLLM Transport Services, Inc.'s primary sources of liquidity are its cash flow from operations and its existing credit agreements. During the thirteen weeks ended March 29, 1996, the Company generated $3.6 million in net cash provided from operating activities. Capital resources required by the Company during the first quarter of 1996 were comparable to the same period last year. In January 1995, the Company entered into an operating lease for the majority of its revenue equipment needs for that year. The payment terms of the operating lease were more favorable than could have been obtained with financing or capital leasing. In 1996, the Company has returned to its traditional method of investing in maintaining a modern fleet. Capital expenditures, net of proceeds from trade-ins, during the first quarter of 1996 were approximately $1,597,000 as compared to $1,547,000 in the first quarter of 1995. This is as a result of the Company's decision to curtail growth of the fleet and refocus attention on improving utilization and profitability in the core trucking business. Net capital expenditures for the remainder of 1996, primarily for revenue equipment, are expected to be approximately $23,267,000. At the end of 1995, the Company discontinued that segment of the international operations aimed at maritime containerized shipments. This division proved to be unprofitable and difficult to manage; thus, in an effort to minimize exposure on future earnings, the Company recognized a one-time after-tax charge to 1995 earnings of $441,000, or $0.10 per share, on the disposal of that unit. To date, there have been no changes in the plan of disposal, or circumstances related thereto. Effective May 1, 1995, the Company acquired substantially all of the assets of Vernon Sawyer, Inc, a regional dry-van truckload carrier based in Bastrop, Louisiana. The acquisition was financed from net cash provided from operating activities and existing credit facilities. At March 29, 1996, the aggregate principal amount of the Company's outstanding long-term indebtedness was approximately $63.2 million. Of this total outstanding, $3.8 million was in the form of 10.2% notes due July 15, 1998, $20.0 million in the form of 9.11% senior notes due June 15, 2002, $34.0 million consisted of the revolving line of credit due April 7, 1997, and $5.4 million principal was relative to capital leases with varying maturities. The Company has a $50,000,000 unsecured revolving line of credit with a syndication of banks. As noted above, borrowings of $34,000,000 were outstanding at March 29, 1996. Under the terms of the agreement, borrowings bear interest at (i) the higher of prime rate or a rate based upon the Federal Funds Effective Rate, (ii) a rate based upon the Eurodollar rates, or (iii) an absolute interest rate as determined by each lender in the syndication under a competitive bid process at the Company's option. Facilities fees from 1/4% to 3/8% per annum are charged on the unused portion of this line. Working capital needs have generally been met from net cash provided from operating activities. The Company has $4,150,000 in unsecured working capital lines of credit with a bank, $2,716,000 of which was available at March 29, 1996. Interest is at a rate based upon the Eurodollar rates with facility fees at 1/4% per annum on the unused portion of the line. The Company anticipates that its existing credit facilities along with cash flow from operations will be sufficient to fund operating expenses, capital expenditures, and debt service. Results of Operations Operating revenue for the first quarter of 1996 increased 19.3% over the comparable period of 1995. The increase in operating revenue in the first quarter consisted of a 9.8% increase from the Company's traditional over-the-road truckload business, of which a 6.2% increase came from the owner-operator division, a 0.3% decrease from rail services, 0.6% increase from transportation brokerage services, and 9.2% increase from the addition of the dry-van over-the-road truckload division. The basis for the net revenue increase consists primarily of an increase in available Company-operated equipment. The average number of Company operated trucks in the first quarter of 1996 increased by approximately 11.3% from the comparable period in 1995. The operating ratio increased from 95.6% to 99.0% for the first quarter of 1996 compared to the same period in 1995. Until very late in the first quarter of 1996, operating revenues and results continued to be affected by an overall weak freight market which has plagued the industry for the past year. In addition, in the first quarter of 1996, the Company experienced a steady and significant increase in fuel costs and an unusually large number of severe winter storms. The relative change in the components of operating expenses during the first quarter of 1996, when compared to the same period last year, reflects the following: a) an increase in driver pay and related costs of approximately $2,703,000, of which $1,271,000 is attributable to the inclusion of the dry-van over-the road truckload division that was not a part of the Company during the same period last year, b) the previously mentioned increased fuel costs of approximately $2,155,000, of which $935,000 is attributable to the dry-van over-the-road truckload division (within these amounts, approximately $650,000, or $0.015 per mile is associated with the rising fuel prices), c) an increase in purchased transportation of approximately $1,509,000, of which $814,000 is relative to dedicated services that were not offered by the Company in the first quarter of last year and $408,000 is attributable to the dry-van over-the-road truckload division, and d) the increased equipment rent of approximately $1,233,000 regarding the operating leases for revenue equipment, as previously mentioned. Those leases were gradually implemented throughout 1995. These increased costs accounted for 0.9%, 0.8%, 0.7%, and 0.8%, respectively, of the increase in the operating ratio. The decrease in gain on sale of revenue equipment during the first quarter of 1996 as compared to the same period in 1995 resulted in an increase in the operating ratio of 0.6%. As a result of the foregoing, net earnings from continuing operations decreased by $1,025,000 or 166% for the first quarter of 1996 from the comparable period of 1995. Earnings per share from continuing operations decreased from $.14 to a loss of $.09 in the first quarter of 1996 compared to the same period of 1995. Seasonality In the transportation industry, results of operations generally show a seasonal pattern because customers reduce shipments during and after the winter holiday season with its attendant weather variations. The Company's operating expenses have historically been higher in the winter months primarily due to decreased fuel efficiency and increased maintenance costs in colder weather. PART II: OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K There was one report on Form 8-K filed for the quarter ended March 29, 1996. It was filed on February 14, 1996. 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. KLLM TRANSPORT SERVICES, INC. (Registrant) Date May 13, 1996 s/ J. Kirby Lane Executive Vice President and Chief Financial Officer Date May 13, 1996 s/ Cindy F. Bailey Corporate Controller /TABLE 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.
KLLM TRANSPORT SERVICES, INC. (Registrant) Date May 13, 1996 /s/ J. Kirby Lane J. Kirby Lane Executive Vice President and Chief Financial Officer Date May 13, 1996 /s/ Cindy F. Bailey Cindy F. Bailey Corporate Controller
EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 0000793765 1,000 3-MOS JAN-03-1997 JAN-01-1996 MAR-29-1996 0 0 30,296 462 1,323 42,680 178,683 60,368 163,915 23,004 0 0 0 4,552 61,030 65,582 0 63,736 0 63,129 0 0 1,268 (655) (249) (406) 20 0 0 (386) (0.09) (0.09)
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