-----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, CZbW6JZbaWI7ptrl/aGLkDbXBYuq6/hs0lwbeU8Z3V47Owj62bsTNsxfaISwXAwQ aZbiVNyNotHPBx0a4oAZag== 0000793765-97-000010.txt : 19970520 0000793765-97-000010.hdr.sgml : 19970520 ACCESSION NUMBER: 0000793765-97-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970404 FILED AS OF DATE: 19970519 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: 0103 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14759 FILM NUMBER: 97611103 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 April 4, 1997 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 4,355,922 Common Shares were outstanding as of April 4, 1997. KLLM TRANSPORT SERVICES, INC. AND SUBSIDIARIES INDEX Page Number PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Balance Sheets April 4, 1997 (Unaudited) and January 3, 1997 1 Consolidated Statements of Earnings (Unaudited) Thirteen weeks ended April 4, 1997 and March 29, 1996 2 Condensed Consolidated Statements of Cash Flows (Unaudited) Thirteen weeks ended April 4, 1997 and March 29, 1996 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 April 4, January 3, 1997 1997 (Unaudited) (Note) (In Thousands) ASSETS Current assets: Cash and cash equivalents $0 $2,874 Accounts receivable 25,009 22,684 Inventories - at cost 843 891 Prepaid expenses: Tires 4,218 4,282 Other 3,082 1,365 Deferred income taxes 3,325 3,325 ________ ______ Total current assets 36,477 35,421 Property and equipment 179,443 179,613 Less accumulated depreciation (62,573) (57,738) _________ _______ 116,870 121,875 Intangible assets, net 2,145 2,259 Other assets 291 339 _________ ________ $155,783 $159,894 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable to banks $1,587 $3,598 Accounts payable and accrued expenses 16,784 16,414 Current maturities of long-term debt and capital leases 4,860 4,848 _______ _______ Total current liabilities 23,231 24,860 Long-term debt and capital leases, less current maturities 47,554 49,747 Deferred income taxes 18,787 18,787 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 - 4,558,754 in 1997 and 4,558,754 in 1996; outstanding shares - 4,355,922 in 1997 and 4,344,955 in 1996. 4,559 4,559 Additional paid-in capital 32,865 32,811 Retained earnings 30,998 31,453 ________ _______ 68,422 68,823 Less Common Stock in Treasury, at cost, 202,832 shares in 1997 and 213,799 shares in 1996. (2,211) (2,323) ________ _______ Total stockholders' equity 66,211 66,500 ________ _______ $155,783 $159,894 ========== =========
Note: The balance sheet at January 3, 1997 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 April 4, March 29, 1997 1996 ______________________ (In Thousands, Except Per Share Amounts) OPERATING REVENUE $62,767 $63,736 OPERATING EXPENSES: Salaries, wages and fringe benefits 19,141 18,707 Operating supplies and expenses 16,157 18,033 Insurance, claims, taxes and licenses 4,037 2,925 Depreciation and amortization 5,263 5,677 Purchased transportation and equipment rent 14,980 15,686 Other 2,722 2,305 Gain (loss) on sale of revenue equipment 167 (204) ____________________ TOTAL OPERATING EXPENSES 62,467 63,129 OPERATING INCOME FROM CONTINUING OPERATIONS 300 607 Interest and other income (26) (6) Interest expense 1,056 1,268 ____________________ 1,030 1,262 ____________________ LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (730) (655) Income taxes (275) (249) ____________________ NET LOSS FROM CONTINUING OPERATIONS ($455) ($406) INCOME ON DISPOSAL OF DISCONTINUED DIVISION (Net of tax expense of $13 in 1996) 20 ____________________ NET LOSS ($455) ($386) ===================== LOSS PER SHARE: From Continuing Operations ($0.10) ($0.09) From Operations of Discontinued Division From Disposal of Discontinued Division 0.00 0.00 _____________________ NET LOSS PER COMMON SHARE ($0.10) ($0.09) ======================
See accompanying notes. KLLM TRANSPORT SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Thirteen Weeks Ended April 4, March 29, 1997 1996 ___________________________ (In Thousands) NET CASH PROVIDED BY OPERATING ACTIVITIES $1,625 $3,592 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (774) (2,972) Proceeds from disposition of equipment 367 1,375 ________ _______ NET CASH FLOWS USED IN INVESTING ACTIVITIES (407) (1,597) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 99 0 Net decrease in borrowings under revolving line of credit 1,879) (1,000) Repayment of long-term debt and capital leases (312) (1,778) Net change in borrowings under working capital line of credit (2,000) 783 _________ ________ NET CASH FLOWS USED IN FINANCING ACTIVITIES (4,092) (1,995) _________ ________ Net Decrease in Cash and Cash Equivalents (2,874) 0 Cash and Cash Equivalents at Beginning Of Period 2,874 0 _________ _________ Cash and Cash Equivalents at End Of Period $0 $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 February 1997, the Financial Accounting Standards Board issued Statement No. 128, Earnings per Share, which is required to be adopted on December 31, 1997. At that time, the company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Under the new requirements for calculating earnings per share, the dilutive effect of stock options will be excluded. The impact of Statement 128 on the calculation of earnings per share is not expected to be material. NOTE B- FISCAL YEAR The Company has adopted a fiscal year-end on the Friday nearest December 31. Accordingly, the first quarter of 1997 ended on Friday, April 4, 1997. NOTE C- 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. The Company has entered into heating oil (diesel fuel) swap agreements in order to hedge its exposure to price fluctuations. At April 4, 1997, the Company had approximately 14% of its remaining 1997 anticipated fuel requirements under swap agreements which expire in January 1998. Gains and losses on hedging contracts are recognized in operating expenses as part of the fuel cost over the hedge period. Also, the Company establishes prices for a portion of its anticipated fuel purchases over specified periods of time through various fuel purchase agreements. 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 April 4, 1997, the Company generated $1.6 million in net cash provided from operating activities. Capital resources required by the Company during the first quarter of 1997 were approximately $1.2 million less than the same period last year. 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 1997, primarily for revenue equipment, are expected to be approximately $19.2 million. The Company has a $50,000,000 unsecured revolving line of credit with a syndication of banks. Borrowings of $28,000,000 were outstanding at April 4, 1997. 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. At April 4, 1997, the aggregate principal amount of the Company's outstanding long-term indebtedness was approximately $52.4 million. Of this total outstanding, $2.5 million was in the form of 10.2% notes due July 15, 1998, $17.1 million in the form of 9.11% senior notes due June 15, 2002, $28.0 million consisted of the revolving line of credit due April 7, 1998, and $4.8 million principal was relative to capital leases with varying maturities. Working capital needs have generally been met from net cash provided from operating activities. The Company has $4,000,000 in an unsecured working capital line of credit with a bank, $3,480,000 of which was available at April 4, 1997. 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 1997 decreased 1.5% over the comparable period of 1996. The decrease in operating revenue in the first quarter consisted of a 1.3% increase from the Company's traditional over-the-road temperature-controlled freight services, a 2.5% decrease from rail services, 4.9% decrease from transportation brokerage services, and 4.5% increase from the dry-van over-the-road truckload division. The average revenue per mile including fuel surcharges increased from $1.112 to $1.126 for the first quarter of 1997 as compared to the same period in 1996. This resulted primarily from an increase in fuel surcharges. Total miles per truck per week for the first quarter of 1997 increased 3.1% over the same period in the prior year, while at the same time, deadhead percentage remained fairly constant. The operating ratio increased from 99.1% to 99.5% for the first quarter of 1997 compared to the same period in 1996. The Company has continued to increase the use of owner-operated tractors and has decreased the company-owned fleet. This change affects the comparability of components of operating expenses by increasing purchased transportation and decreasing wages, depreciation, and various operating supplies and expenses. Purchased transportation also reflects the significant reductions in transportation brokerage and rail operations. Driver wages were increased at the start of 1997 to offset cancellation of reimbursement of certain expenses to drivers. The effect in the first quarter was to increase wages and decrease operating supplies $1.1 million compared to the first quarter of 1996. Operating supplies and expenses were also affected by higher fuel prices and the benefit of various cost reduction efforts impacting loading and other expenses compared to the first quarter of 1996. Insurance and claims costs for the first quarter of 1997 significantly increased, approximately $1.5 million or 38.0%, over the first quarter of 1996 (6.4% of operating revenues as compared to 4.5% last year). The increase was relative to both past and current claims. A reassessment of our reserving and claims management practices have led to the adoption of a more conservative approach in reserving for claims coupled with a more aggressive approach to managing those claims. As a result of the foregoing, net loss from continuing operations increased by $49,000 or 11.9% for the first quarter of 1997 from the comparable period of 1996. Loss per share from continuing operations increased from $(.09) to $(.10) in the first quarter of 1997. 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 a Form 8-A and Form 8-K filing for the quarter ended April 4, 1997. 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 19, 1997 s/ Steven K. Bevilaqua Steven K. Bevilaqua President and Chief Executive Officer Date May 19, 1997 s/ Steven L. Dutro Steven L. Dutro Vice President-Finance and Acting Chief Financial Officer
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 19, 1997 /s/ Steven K. Bevilaqua Steven K. Bevilaqua President and Chief Executive Officer Date May 19, 1997 /s/ Steven L. Dutro Steven L. Dutro Vice President-Finance and Acting Chief Financial Officer
EX-27 2
5 3-MOS JAN-02-1998 APR-04-1997 0 0 25,009 554 843 36,477 179,443 62,573 155,783 23,231 0 0 0 4,559 61,652 155,783 0 62,767 0 62,467 0 0 1,056 (730) (275) (455) 0 0 0 (455) (0.10) 0.00
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