-----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, TktLuJJ2BxOEjrceS4Lr8xEOK2g/jHF/50BP5Cyk5udZbbg3cwOe8aR+ALViSf7J Nicq1V3QJ8BoX8VGzvhUxA== 0000793765-95-000022.txt : 19951002 0000793765-95-000022.hdr.sgml : 19951002 ACCESSION NUMBER: 0000793765-95-000022 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950927 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-14759 FILM NUMBER: 95576351 BUSINESS ADDRESS: STREET 1: 3475 LAKELAND DR CITY: JACKSON STATE: MS ZIP: 39208 BUSINESS PHONE: 6019392545 MAIL ADDRESS: STREET 1: P.O.BOX 6098 CITY: JACKSON STATE: MS ZIP: 39288 10-Q/A 1 COVER 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 June 30, 1995 Commission File Number 0-14759 KLLM TRANSPORT SERVICES, INC. (Exact name of registrant as specified in its charter) Delaware 64-0412551 (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 4,509,251 Common Shares were outstanding as of June 30, 1995. KLLM TRANSPORT SERVICES, INC. AND SUBSIDIARIES INDEX Page PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Balance Sheets June 30, 1995 (Unaudited) and December 30, 1994 1 Consolidated Statements of Earnings (Unaudited) Twenty-six weeks ended June 30, 1995 and July 1, 1994 2 Condensed Consolidated Statements of Cash Flows (Unaudited) Twenty-six weeks ended June 30, 1995 and July 1, 1994 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. 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. 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 June 30, 1995 and December 30, 1994. Effective March 1, 1994, the Company acquired all of the outstanding stock of Fresh International Transportation, Inc., a company which provides temperature controlled transportation via double-stack containers on railroads. Results from operations of the Company include operations of the acquired company since March 1, 1994. The excess of purchase price over the fair value of the assets acquired is classified as goodwill and is included in intangibles in the accompanying balance sheet. Goodwill is being amortized by the straight line method over fifteen years. Prior operations of Fresh International Transportation, Inc. are immaterial to the Company's revenue, net earnings and earnings per share for the periods ended June 30, 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 second quarter of 1995 ended on Friday, June 30, 1995. NOTE D - COMMITMENTS AND CONTINGENCIES During the first half of 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. KLLM TRANSPORT SERVICES, INC AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 30, 1995 1994 _____________________________ (Unaudited) (Note) (In Thousands) ASSETS Current assets: Cash and cash equivalents $289 $1,397 Accounts receivable 27,674 24,063 Inventories - at cost 1,491 1,191 Prepaid expenses: Tires 4,193 5,314 Other 4,032 3,764 Deferred income taxes 1,450 1,450 Total current assets 39,129 37,179 Property and equipment 190,703 182,747 Less accumulated depreciation (58,047) (55,991) _________ ________ 132,656 126,756 Intangible assets, net (Note B) 2,801 2,142 $174,586 $166,077 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable to banks $6,291 $4,000 Accounts payable and accrued expenses 10,138 8,670 Current maturities of long-term debt and capital leases 6,212 2,483 Total current liabilities 22,641 15,153 Long-term debt and capital leases, less current maturities 66,196 66,531 Deferred income taxes 16,550 16,550 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 1995 and 1994, respectively; outstanding shares - 4,509,251 in 1995 and 4,481,251 in 1994. 4,552 4,552 Additional paid-in capital 32,946 33,121 Retained earnings 32,346 31,234 69,844 68,907 Less Common Stock in Treasury, at cost, 42,968 shares in 1995 and 70,968 shares in 1994. (645) (1,064) Total Stockholders' Equity 69,199 67,843 $174,586 $166,077 Note: The balance sheet at December 30, 1994 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 Twenty-Six Weeks Ended June 30, July 1, June 30, July 1, 1995 1994 1995 1994 ____________________________________________________ (In Thousands, Except Per Share Amounts) OPERATING REVENUE $63,011 $57,805 $119,858 $105,102 OPERATING EXPENSES: Salaries, wages and fringe benefits 17,957 16,263 33,827 31,276 Operating supplies and expenses 16,206 16,197 30,914 31,209 Insurance, claims, taxes and licenses 2,637 2,908 5,357 5,468 Depreciation and amortization 5,860 5,302 11,320 10,029 Purchased transportation and equipment rent 15,104 9,856 28,788 15,789 Other 2,857 2,611 5,640 5,030 Gain on sale of revenue equipment (227) (128) (748) (187) ______________________________ TOTAL OPERATING EXPENSES 60,394 53,009 115,098 98,614 OPERATING INCOME 2,617 4,796 4,760 6,488 Interest and other income (9) (8) (9) (10) Interest expense 1,527 1,337 2,977 2,494 1,518 1,329 2,968 2,484 EARNINGS BEFORE INCOME TAXES 1,099 3,467 1,792 4,004 Income taxes 418 1,300 681 1,500 NET EARNINGS $681 $2,167 $1,111 $2,504 NET EARNINGS PER COMMON SHARE $0.15 $0.48 $0.25 $0.55 See accompanying notes. KLLM TRANSPORT SERVICES INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Twenty-Six Weeks Ended June 30, July 1, 1995 1994 ________________________ (In Thousands) NET CASH PROVIDED BY OPERATING ACTIVITIES $11,445 $11,807 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of Vernon Sawyer, Inc. assets (Note B) (10,194) Purchase of Fresh International Transportation, Inc. (Note B) (2,566) Purchases of property and equipment (12,907) (19,241) Proceeds from disposition of equipment 4,663 2,383 NET CASH FLOWS USED IN INVESTING ACTIVITIES (18,438) (19,424) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 244 4 Purchase of common stock for treasury (108) Debt to fund Vernon Sawyer, Inc. acquisition 3,795 Net increase (decrease) in borrowings under revolving line of credit 4,000 10,500 Repayment of long-term debt and capital leases (1,029) (568) Net change in borrowings under working capital line of credit (1,081) (2,000) NET CASH FLOWS (USED) PROVIDED BY FINANCING ACTIVITIES 5,929 7,828 Net Decrease in Cash and Cash Equivalents (1,064) 211 Cash and Cash Equivalents at Beginning Of Period 1,353 869 Cash and Cash Equivalents at End Of Period $289 $1,080 See accompanying notes. 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 twenty-six weeks ended June 30, 1995, the Company generated $11.4 million in net cash provided from operating activities. The growth of the Company's business has required significant investments in new tractors and trailers, which were previously financed largely through long-term debt and capitalized leases. The vast majority of new tractors are now (beginning January 1995) being leased under an operating lease plan with terms more favorable than could have been obtained with financing or capital leasing. During the first half of 1995, the Company entered into these operating leases with average annual minimum rental payments of $4,057,000 through 1999. The commitment for 1995 is approximately $2,000,000. Capital expenditures, net of proceeds from trade-ins, during the first half of 1995 were approximately $8,244,000. Net capital expenditures for the remainder of 1995, primarily for revenue equipment, are expected to be approximately $1,255,000. 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. Effective March 1, 1994, the Company acquired all of the outstanding stock of Fresh International Transportation, Inc., a company which provides temperature controlled transportation via double-stack containers on railroads. The acquisition was financed from net cash provided from operating activities. The Company has a $50,000,000 unsecured revolving line of credit with a syndication of banks. Borrowings of $40,000,000 were outstanding at June 30, 1995. 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, $1,231,000 of which was available at June 30, 1995. 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 second quarter and first half of 1995 increased 9% and 14% over the comparable periods of 1994. The increase in operating revenue in the second quarter consisted of a 1% decrease from the Company's traditional over-the-road truckload business, of which a 6% increase came from the owner-operator division, a 2% decrease from rail services, 5% increase from transportation brokerage services, 2% increase from international services, and 5% increase from the addition of our new dry-van over-the-road truckload division. The increase in operating revenue in the first half of 1995 consisted of a 3% increase from the Company's traditional over-the-road truckload business, of which a 7% increase came from the owner-operator division, less than 1% increase from rail services, 5% increase from transportation brokerage services, 3% increase from international services, and 3% increase from the addition of our new dry-van over-the-road truckload division. The increase in revenue resulted from an increase in available Company-operated equipment and an improvement in rates. The average number of Company operated trucks in the second quarter and first half of 1995 increased by approximately 11%, from the comparable periods in 1994. The operating ratio increased from 91.7% to 95.8% for the second quarter and from 93.8% to 96.0% for the first half of 1995 compared to the same periods in 1994. Operating revenues and results, particularly in our trucking and rail operations, were affected by an industry-wide softening in demand for transportation services during the second quarter of 1995. During the first half of 1995, operating revenues were affected by the West Coast flooding, a Canadian National Railway strike and industry-wide softness in the transportation market. The relative change in the components of operating expenses during 1995 reflects the increase in purchased transportation by the newer operating divisions as compared to 1994, and the increase in equipment rent regarding the new operating leases for tractors and trailers, as previously mentioned. The increase in gain on sale of revenue equipment during the first half of 1995 as compared to the same period in 1994 resulted in a decrease in the operating ratio of 0.5%. Substantially all of the growth in revenue is from the newer operations. These divisions are lower margin than the traditional over-the-road freight operation which increases the operating ratio overall; however, they are not as capital intensive. As a result of the foregoing, net earnings decreased by $1,486,000 or 69% for the second quarter and by $1,393,000 or 56% for the first half of 1995 from the comparable periods of 1994. Earnings per share decreased from $.48 to $.15 in the second quarter of 1995 and decreased from $.55 to $.25 in the first half of 1995 compared to the same periods of 1994. 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 reports on Form 8-K filed for the quarter ended June 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. KLLM TRANSPORT SERVICES, INC. (Registrant) Date August 14, 1995 J. Kirby Lane Executive Vice President and Chief Financial Officer Date August 14, 1995 Cindy F. Bailey Corporate Controller
EX-27 2 ART. 5 FDS FOR 2ND QUARTER 10-Q WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000 12/29/95 6/30/95 6-MOS 289 27,674 147 1,491 39,129 190,703 58,047 174,586 22,641 4,552 64,647 174,586 119,858 115,098 2,977 1,792 681 1,111 1,111 0.25 0.25
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