-----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, K2QfVes0zedgghdhIrB/t5vIbU35v+Ur3L0F3/fxeUA+ho/ngPNIbhMObHjJflA0 nR3jFtNe+0jNBCjhvN5hXA== 0000793765-98-000004.txt : 19980504 0000793765-98-000004.hdr.sgml : 19980504 ACCESSION NUMBER: 0000793765-98-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980403 FILED AS OF DATE: 19980501 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: SEC FILE NUMBER: 000-14759 FILM NUMBER: 98608243 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 3, 1998 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.) 135 Riverview Drive Richland, Mississippi 39218 (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 4,373,115 Common Shares were outstanding as of April 3, 1998. KLLM TRANSPORT SERVICES, INC. AND SUBSIDIARIES INDEX Page Number PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Balance Sheets April 3, 1998 (Unaudited) and January 2, 1998 1 Consolidated Statements of Earnings (Unaudited) Thirteen weeks ended April 3, 1998 andApril 4, 1997 2 Condensed Consolidated Statements of Cash Flows (Unaudited) Thirteen weeks ended April 3, 1998 and April 4, 1997 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 3, January 2, 1998 1998 ----------- ----------- (Unaudited) (Note) (In Thousands) ASSETS Current assets: Cash and cash equivalents $707 $670 Accounts receivable 20,988 20,824 Inventories - at cost 580 635 Prepaid expenses: Tires 2,899 2,885 Other 2,110 2,494 Assets held for sale 1,530 3,383 Deferred income taxes 5,413 5,413 ------------ ---------- Total current assets 34,227 36,304 Property and equipment 133,688 137,216 Less accumulated depreciation (30,294) (29,276) ------------ ---------- 103,394 107,940 Intangible assets, net 11 90 Other assets 169 201 ------------ -------- $137,801 $144,535 ============ =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable to banks $1,190 $0 Accounts payable and accrued expenses 12,304 15,912 Accrued claims expense 14,784 13,913 Current maturities of long-term debt and capital leases 4,911 4,898 ------------ ---------- Total current liabilities 33,189 34,723 Long-term debt and capital leases, less current maturities 38,620 44,826 Deferred income taxes 12,875 12,875 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 1998 and 1997; outstanding shares - 4,373,115 in 1998 and 1997. 4,559 4,559 Additional paid-in capital 32,854 32,854 Retained earnings 17,739 16,733 ---------- -------- 55,152 54,146 Less Common Stock in Treasury, at cost, 185,639 shares in 1998 and 1997 (2,035) (2,035) ---------- --------- Total stockholders' equity 53,117 52,111 ---------- --------- $137,801 $144,535 ========== ===========
Note: The balance sheet at January 2, 1998 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 3, April 4, 1998 1997 ------------------------ (In Thousands, Except Per Share Amounts) OPERATING REVENUE FROM TRUCK LOAD OPERATIONS $59,190 $60,618 OPERATING EXPENSES: Salaries, wages and fringe benefits 19,756 19,093 Operating supplies and expenses 14,331 16,139 Insurance, claims, taxes and licenses 3,250 4,037 Depreciation and amortization 4,660 5,225 Purchased transportation and equipment rent 12,736 12,930 Other 2,729 2,676 (Gain) loss on sale of revenue equipment (2) 167 ----------------------- TOTAL OPERATING EXPENSES FROM TRUCK LOAD OPERATIONS 57,460 60,267 OPERATING INCOME FROM TRUCK LOAD OPERATIONS 1,730 351 OPERATING REVENUE FROM RAIL CONTAINER OPERATIONS 0 2,149 OPERATING EXPENSES 0 2,200 ----------------------- OPERATING INCOME (LOSS) FROM RAIL CONTAINER OPERATIONS 0 (51) Interest and other income (907) (26) Interest expense 956 1,056 ----------------------- 49 1,030 ----------------------- EARNINGS (LOSS) BEFORE INCOME TAXES 1,681 (730) Income taxes 675 (275) ----------------------- NET EARNINGS (LOSS) $1,006 ($455) ======================= BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE $ 0.23 ($0.10) =======================
See accompanying notes. KLLM TRANSPORT SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Thirteen Weeks Ended April 3, April 4, 1998 1997 ------------------------ (In Thousands) NET CASH PROVIDED BY OPERATING ACTIVITIES $2,276 $1,625 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (420) (774) Proceeds from disposition of property, equipment and assets held for sale 3,184 367 --------- -------- NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES 2,764 (407) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 0 99 Net decrease in borrowings under revolving line of credit (6,000) (1,879) Repayment of long-term debt and capital leases (193) (312) Net change in borrowings under working capital line of credit 1,190 (2,000) --------- -------- NET CASH FLOWS USED IN FINANCING ACTIVITIES (5,003) (4,092) --------- -------- Net Increase (Decrease) in Cash and Cash Equivalents 37 (2,874) Cash and Cash Equivalents at Beginning Of Period 670 2,874 --------- -------- Cash and Cash Equivalents at End Of Period $707 $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. As of January 3, 1998, the Company adopted Financial Accounting Standards Board Statement No. 130, Reporting Comprehensive Income. Statement No. 130 establishes new rules for the reporting and display of comprehensive income and its components; however, the adoption of this Statement had no impact on the Company's consolidated net income or shareholders' equity. Statement No. 130 requires unrealized gains or losses on the Company's available-for-sale securities and foreign currency translation adjustments, which prior to adoption were required to be reported separately in shareholders' equity, to be included in other comprehensive income. The Company has no available-for-sale securities or foreign currency translation adjustments; therefore, no disclosure is necessary for the first quarter of 1998. In March 1998, the American Institute of Certified Public Accountants issued Statement of Position (SOP) 98-1, Accounting For the Costs of Computer Software Developed For or Obtained For Internal-Use. The SOP is effective for financial statements for fiscal years beginning after December 15, 1998 and restatement of previously issued annual financial statements or adoption by cumulative catch-up adjustment is prohibited. The Company has elected early adoption of SOP 98-1 for its fiscal year beginning January 3, 1998. The SOP requires the capitalization of certain costs incurred after the date of adoption. The Company incurred no such costs in the first quarter of 1998. NOTE B- FISCAL YEAR The Company has adopted a fiscal year-end on the Friday nearest December 31. Accordingly, the first quarter of 1998 ended on Friday, April 3, 1998. 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 3, 1998, the Company had approximately 10.6% of its remaining 1998 anticipated fuel requirements and less than 1% of its 1999 anticipated fuel requirements under swap agreements which expire in January, 1999. Gains and losses on hedging contracts are recognized in operating expenses as part of the fuel cost over the hedge period. 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 3, 1998, the Company generated $2.3 million in net cash provided from operating activities. As a result of the Company's decision to consolidate the corporate office and terminal operations under one roof in Jackson, MS, the sale of the corporate office building was finalized in March 1998. The sale generated $3.2 million, thus, providing additional liquidity to the Company. During the first quarter of 1998, net capital resources provided by the Company were approximately $2.8 million. During the same period last year, capital resources required by the Company were approximately $0.4 million. Net capital expenditures for the remainder of 1998, primarily for revenue equipment, are expected to be approximately $9.9 million. The Company has a $50,000,000 unsecured revolving line of credit with a syndication of banks. Borrowings of $24,000,000 were outstanding at April 3, 1998. 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 1/5% to 3/8% per annum are charged on the unused portion of this line. At April 3, 1998, the aggregate principal amount of the Company's outstanding long-term indebtedness was approximately $43.5 million. Of this total outstanding, $1.2 million was in the form of 10.7% notes due July 15, 1998, $14.3 million in the form of 9.61% senior notes due June 15, 2002, $24.0 million consisted of the revolving line of credit due April 7, 1999, and $4.0 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, $2,810,000 of which was available at April 3, 1998. 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 1998 decreased 2.4% over the comparable period of 1997. The decrease in operating revenue in the first quarter consisted of a 3.1% decrease from the Company's traditional over-the-road temperature-controlled freight services, net of a 1.0% decrease resulting from rail non-container operations, and a 1.7% increase from the dry-van over-the-road truckload division. The average revenue per mile excluding fuel surcharges increased from $1.114 to $1.120 for the first quarter of 1998 as compared to the same period in 1997. In 1997, fuel surcharges increased revenue by $0.012 per mile. The operating ratio decreased from 99.4% to 97.1% for the first quarter of 1998 compared to the same period in 1997. The significant reduction in the operating ratio of 2.3% was achieved via significant reductions in the cost structure of the Company throughout 1997 which have resulted in solid improvements in the operations. Salaries increased $663,000 in the first quarter of 1998 as compared to the same period in 1997 primarily as a result of increases in driver compensation ($1,485,000) as the Company continued to address the challenge of attracting and retaining qualified drivers. Wages for administrative and maintenance staff were reduced by $822,000 during the first quarter of 1998 as compared with the same period in 1997. Operating supplies decreased $1,808,000 due to lower fuel prices (approximately $1,239,000) and the application of aggressive cost management practices. Insurance, taxes and licenses decreased by $787,000 primarily as a result of the adoption during the first quarter of 1997 of a more conservative approach in reserving for claims coupled with a more aggressive approach to managing those claims. Depreciation and amortization decreased by $565,000 due to the second quarter 1997 write-off of intangible assets within the restructuring charge relative to exiting the rail container business and the fourth quarter 1997 special charge to recognize an impairment in value of the Company's 48-foot temperature-controlled trailers. Purchased transportation and equipment rent remained fairly constant with the prior year first quarter. Other expenses grew only slightly (approximately $53,000); however, of that amount, there was an increase of $367,000 related to advertising for and recruiting of drivers. The difference of $314,000 came about as a result of the application of aggressive cost management practices in a variety of areas. In the first quarter of 1998, the Company recognized an improvement of $169,000 regarding gains and losses on the disposition of its revenue equipment as compared to the same period in 1997. The Company realized a net gain of $2,000 in the first quarter of 1998 as compared to a net loss of $167,000 in 1997. As a result of the foregoing, income from truckload operations increased by $1,379,000 or 392.5% for the first quarter of 1998 from the comparable period of 1997. Other income increased $881,000 during the first quarter of 1998 as compared to the same period in 1997 primarily as a result of the previously discussed sale of the corporate office building. The Company realized a gain on disposition of $1,058,000 and associated relocation expenses of $200,000. Net income for the first quarter of 1998 of $1,006,000 is $1,461,000 greater than the same period in 1997, which was a net loss of $455,000. Basic and diluted earnings(loss) per share increased from $(.10) to $.23 in the first quarter of 1998 as compared to the same period in 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 were no Form 8-K filings for the quarter ended April 3, 1998. 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 1, 1998 /s/ Steven K. Bevilaqua Steven K.Bevilaqua President and Chief Executive Officer Date May 1, 1998 /s/ Steven L. Dutro Steven L. Dutro 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 1, 1998 /s/ Steven K. Bevilaqua Steven K. Bevilaqua President and Chief Executive Officer Date May 1, 1998 /s/ Steven L. Dutro Steven L. Dutro Chief Financial Officer
EX-27 2
5 1,000 3-MOS JAN-01-1999 APR-03-1998 707 0 20,988 962 580 34,227 133,688 30,294 137,801 33,190 0 0 0 4,559 48,557 137,801 0 59,190 0 57,460 0 0 956 1,681 675 1,006 0 0 0 1,006 0.23 0.23
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