-----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, AXU9OEMZxKlADkmeNno0bo+snRWfhf8uApneuHNmnhqDhlkbTbj4E7wLsWhlfyg5 W0KN98e5P/dYCcNfsMxtEw== 0000793765-96-000024.txt : 19961107 0000793765-96-000024.hdr.sgml : 19961107 ACCESSION NUMBER: 0000793765-96-000024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960927 FILED AS OF DATE: 19961106 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: 96655313 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 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 September 27, 1996 Commission File Number 0-14759 KLLM TRANSPORT SERVICES, INC. (Exact name of registrant as specified in its charter) Delaware 64-012551 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 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 4,338,420 Common Shares were outstanding as of September 27, 1996. KLLM TRANSPORT SERVICES, INC. AND SUBSIDIARIES INDEX Page Number PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Balance Sheets September 27, 1996 (Unaudited) and December 29, 1995 1 Consolidated Statements of Earnings (Unaudited) Thirteen weeks and Thirty-nine weeks ended September 27, 1996 and September 29, 1995 2 Condensed Consolidated Statements of Cash Flows (Unaudited) Thirty-nine weeks ended September 27, 1996 and September 29, 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
September 27, December 29, 1996 1995 (Unaudited) (Note) (In Thousands) ASSETS Current assets: Cash and cash equivalents $1,163 $0 Accounts receivable 28,653 27,787 Inventories - at cost 1,023 1,315 Prepaid expenses: Tires 3,794 4,096 Other 3,720 3,809 Deferred income taxes 1,940 1,940 -------- ------- Total current assets 40,293 38,947 Property and equipment 185,025 179,568 Less accumulated depreciation (61,727) (57,304) --------- ------- 123,298 122,264 Intangible assets, net 2,351 2,626 Other assets 348 411 --------- -------- $166,290 $164,248 ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable to banks $782 $2,758 Accounts payable and accrued expenses 22,597 13,076 Current maturities of long-term debt and capital leases 4,835 5,937 ------- ------- Total current liabilities 28,214 21,771 ======= ======= Long-term debt and capital leases, less current maturities 54,937 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 - 4,338,420 in 1996 and 4,358,653 in 1995. 4,552 4,552 Additional paid-in capital 32,658 32,815 Retained earnings 31,337 30,687 -------- -------- 68,547 68,054 Less Common Stock in Treasury, at cost, 213,799 shares in 1996 and 193,566 in 1995. (2,323) (2,086) -------- -------- Total stockholders' equity 66,224 65,968 -------- -------- $166,290 $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 Thirty-Nine Weeks Ended September 27, September 29, September 27,September 29, 1996 1995 1996 1995 -------------------------- ------------------------- (In Thousands, Except Per Share Amounts) OPERATING REVENUE $62,466 $63,158 $193,311 $177,552 OPERATING EXPENSES: Salaries, wages and fringe benefits 17,780 18,564 55,015 51,908 Operating supplies and expenses 16,382 17,937 52,340 48,703 Insurance, claims, taxes and licenses 3,694 3,226 9,828 8,495 Depreciation and amortization 5,530 5,990 16,629 17,250 Purchased transportation and equipment rent 15,869 14,549 48,345 38,804 Other 2,400 2,637 7,346 7,787 Gain on sale of revenue equipment (652) (442) (996) (1,190) ----------------- ----------------- TOTAL OPERATING EXPENSES 61,003 62,461 188,507 171,757 ----------------- ------------------- OPERATING INCOME FROM CONTINUING OPERATIONS 1,463 697 4,804 5,795 Interest and other income (18) (7) (37) (16) Interest expense 1,131 1,471 3,600 4,289 ----------------- -------------------- 1,113 1,464 3,563 4,273 ----------------- -------------------- EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 350 (767) 1,241 1,522 Income taxes 220 (293) 558 567 ----------------- ------------------- NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS $130 ($474) $683 $955 LOSS FROM OPERATIONS OF DISCONTINUED DIVISION (Net of tax expense (benefits) of $0 in 1996 and ($23) and ($202) for the 1995 thirteen 0 ($41) $0 ($359) weel and thirty nine week periods, respectively) INCOME (LOSS) ON DISPOSAL OF DISCONTINUED DIVISION (Net of tax expense (benefit) of ($31) and ($27) for the 1996 thirteen week and thirty nine week periods, respectively,and $0 in 1995) (39) $0 ($33) $0 -------------------- ------------------- NET EARNINGS (LOSS) $91 ($515) $650 $596 ==================== =================== EARNINGS (LOSS) PER SHARE: From Continuing Operations $0.03 ($0.10) $0.16 $0.21 From Operations of Discontinued Division 0.00 (0.01) 0.00 (0.08) From Disposal of Discontinued Division (0.01) 0.00 (0.01) 0.00 --------------------- ------------------- NET EARNINGS (LOSS) PER COMMON SHARE $0.02 ($0.11) $0.15 $0.13 ===================== ===================
See accompanying notes. KLLM TRANSPORT SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Thirty-Nine Weeks Ended September 27, September 29, 1996 1995 -------------- -------------- (In Thousands) NET CASH PROVIDED BY OPERATING ACTIVITIES $26,085 $17,127 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of Vernon Sawyer, Inc. assets (Note B) 0 (10,531) Purchases of property and equipment (23,151) (19,155) Proceeds from disposition of equipment 6,358 7,991 ------------- -------------- NET CASH FLOWS USED IN INVESTING ACTIVITIES (16,793) (21,695) ------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 427 244 Redemption of treasury shares (854) 0 Debt to fund Vernon Sawyer, Inc. acquisition 0 3,795 Net increase in borrowings under revolving line of credit 0 5,000 Repayment of long-term debt, capital leases, and notes payable to banks (7,188) (4,272) Net (decrease) in borrowings under working capital line of credit (514) (1,552) ----------- ------------- NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES (8,129) 3,215 ----------- ------------- Net Decrease in Cash and Cash Equivalents 1,163 (1,353) Cash and Cash Equivalents at Beginning Of Period 0 1,353 ----------- ------------- Cash and Cash Equivalents at End Of Period $1,163 $0 ============ =============
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 the affect was 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. NOTE C - FISCAL YEAR The Company has adopted a fiscal year-end on the Friday nearest December 31. Accordingly, the third quarter of 1996 ended on Friday, September 27, 1996. NOTE D - COMMITMENTS AND CONTINGENCIES 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 thirty-nine weeks ended September 27, 1996, the Company generated $26.1 million in net cash provided from operating activities. Capital resources required by the Company during the first nine months of 1996 were approximately $5,629,000 greater than 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 nine months of 1996 were approximately $16,793,000 as compared to $11,164,000 in the first nine months 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 $5,467,000. 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 September 27, 1996, the aggregate principal amount of the Company's outstanding long-term indebtedness was approximately $59.8 million. Of this total outstanding, $2.5 million was in the form of 10.2% notes due July 15, 1998, $17.2 million in the form of 9.11% senior notes due June 15, 2002, $35.0 million consisted of the revolving line of credit due April 7, 1998, and $5.1 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 $35,000,000 were outstanding at September 27, 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, $4,013,000 of which was available at September 27, 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 third quarter and first nine months of 1996 decreased 1.1% and increased 8.9% over the comparable periods of 1995. The increase in operating revenue in the third quarter consisted of a 0.1% increase from the Company's traditional over-the-road truckload business, of which a 2.8% increase came from the owner-operator division, a 2.1% decrease from rail services, 3.4% decrease from transportation brokerage services, and 4.5% increase from the dry-van over-the-road truckload division. The increase in operating revenue in the first nine months of 1996 consisted of a 4.9% increase from the Company's traditional over-the-road truckload business, of which a 4.6% increase came from the owner-operator division, a 1.1% decrease from rail services, a 1.2% decrease from transportation brokerage services, and 6.3% increase from the dry-van over-the-road truckload division. The net revenue increase resulted primarily from an improvement in utilization of available equipment. Total miles per truck per week for the third quarter and first nine months of 1996 decreased 0.2% and increased 3.0% over the same periods in the prior year, while at the same time, deadhead percentage decreased 5.5% and 3.2% The operating ratio decreased from 98.9% to 97.7% for the third quarter and increased from 96.7% to 97.5% for the first nine months of 1996 compared to the same periods in 1995. Operating revenues and results continue to be affected by an overall weak freight market which has plagued the industry since early last year. In addition, in the first nine months of 1996, the Company experienced a steady and significant increase in fuel costs, coupled by an unusually large number of severe winter storms. The relative change in the components of operating expenses during the first nine months of 1996, when compared to the same period last year, reflects the following: a) an increase in driver pay and related costs of approximately $2,871,000, b) the previously mentioned increased fuel costs of approximately $4,231,000, (within this amount, approximately $2,318,000, or $0.019 per mile is associated with the rising fuel prices), c) an increase in purchased transportation of approximately $2,060,000, which is less than the $2,779,000 in costs relative to dedicated services that were not offered by the Company in the first nine months of last year, and d) the increased equipment rent of approximately $2,148,000 regarding the operating leases for revenue equipment, as previously mentioned. Those leases were gradually implemented throughout 1995. These increased costs accounted for 0.5%, 1.8%, less than 0.1%, and 1.0%, respectively, of the increase in the operating ratio. As a result of the foregoing, net earnings from continuing operations increased by $604,000 or 127.4% for the third quarter and decreased by $272,000 or 28.5% for the first nine months of 1996 from the comparable periods of 1995. Earnings/(loss) per share from continuing operations increased from $(.10) to $.03 in the third quarter of 1996 and decreased from $.21 to $.16 in the first nine months of 1996 compared to the same periods 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 were no Form 8-K filings for the quarter ended September 27, 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 November 6, 1996 S/J. Kirby Lane J. Kirby Lane Executive Vice President and Chief Financial Officer Date November 6, 1996 Cindy F. Bailey Corporate Controller
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 November 6, 1996 /s/ J. Kirby Lane J. Kirby Lane Executive Vice President and Chief Financial Officer Date November 6, 1996 /s/Cindy F. Bailey Cindy F. Bailey Corporate Controller
EX-27 2
5 9-MOS JAN-03-1997 SEP-27-1996 1,163 0 28,653 798 1,023 40,293 185,025 61,727 166,290 28,214 0 0 0 4,552 61,672 166,290 0 193,311 0 188,507 0 0 3,600 1,241 558 683 (33) 0 0 650 0.15 0.15
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