-----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, SqTYYyJKi0GZiOtYXwbL8jQd6OEjgyvDEexsQPw0Evbp89dX5px5BQpDVMZvJyqU QO4J1T/wAEMHRTC634NcOA== 0000891554-99-000974.txt : 19990517 0000891554-99-000974.hdr.sgml : 19990517 ACCESSION NUMBER: 0000891554-99-000974 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COUNTRY WIDE TRANSPORT SERVICES INC CENTRAL INDEX KEY: 0000810950 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 954105996 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-23360 FILM NUMBER: 99623461 BUSINESS ADDRESS: STREET 1: 119 DESPATCH DRIVE CITY: EAST ROCHESTER STATE: NY ZIP: 14445- BUSINESS PHONE: 7163815470 MAIL ADDRESS: STREET 1: 119 DESPATCH DRIVE CITY: EAST ROCHESTER STATE: NY ZIP: 14445- 10-Q 1 QUARTER REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 ---------- For Quarter Ended March 31, 1999 Commission File Number 0-23360 COUNTRY WIDE TRANSPORT SERVICES, INC. (Exact name of registrant as specified in charter) DELAWARE 95-4105996 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 119 Despatch Drive, East Rochester, NY 14445 (Address of principal executive offices) (Zip Code) (716) 381-5470 (Registrant's telephone number, including area code) 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ The number of shares of common stock outstanding as of April 30, 1999 was 4,248,100 COUNTRY WIDE TRANSPORT SERVICES, INC. and Consolidated Subsidiary Companies INDEX Part I - Financial Information Page Item 1. Financial Statements: Condensed Consolidated Balance Sheets--March 31, 1999 and June 30, 1998 3 Condensed Consolidated Statements of Operations-- Three Months Ended March 31, 1999 and 1998, and Nine Months Ended March 31, 1999 and 1998 4 Condensed Consolidated Statements of Cash Flows--Nine Months Ended March 31, 1999 and 1998 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Part II - Other Information Item 5. Other Information 10 Item 6. Exhibits and reports on form 8K 10 Signatures 11 2 COUNTRY WIDE TRANSPORT SERVICES, INC. and Consolidated Subsidiary Companies Condensed Consolidated Balance Sheets (In Thousands)
March 31, June 30, 1999 1998* -------- ------- (Unaudited) ASSETS Current assets: Cash $ 8 $ 6 Accounts receivable, net 4,709 5,548 Accounts receivable, miscellaneous 148 112 Driver advances 16 13 Prepaid expenses 56 38 ------- ------- Total current assets 4,937 5,717 Property and equipment, net 246 263 Other assets: Deposits 36 34 Excess of purchase price over fair market value of net assets acquired, net 2,429 2,518 ------- ------- Total Assets $ 7,648 $ 8,532 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 4,275 $ 5,088 Liabilities in excess of assets of discontinued subsidiary 127 150 ------- ------- Total current liabilities 4,402 5,238 Long-term debt, less current portion 1,944 2,514 Total liabilities 6,346 7,752 ------- ------- Stockholders' equity Preferred stock, $.01 par value, 5,000,000 shares authorized, issuable in series, none issued -- -- Common stock, $.10 par value, 6,000,000 shares authorized, 4,248,100 shares issued and outstanding at March 31, 1999 and June 30, 1998, respectively 425 425 Additional paid-in capital 8,110 8,110 Retained earnings (7,233) (7,755) ------- ------- Total stockholders' equity 1,302 780 ------- ------- Total liabilities and stockholders' equity $ 7,648 $ 8,532 ======= =======
* Condensed from audited financial statements. The accompanying notes are an integral part of these condensed consolidated financial statements. 3 COUNTRY WIDE TRANSPORT SERVICES, INC. and Consolidated Subsidiary Companies Condensed Consolidated Statements of Operations (Unaudited) (In Thousands, except Per Share Data)
Three Months Ended Nine Months Ended March 31, March 31, -------------------- -------------------- 1999 1998 1999 1998 -------- -------- -------- -------- Transportation revenue $ 8,290 $ 8,291 $ 27,055 $ 25,444 -------- -------- -------- -------- Operating costs and expenses: Purchased transportation 7,119 7,280 23,485 22,346 Salaries and related expenses 566 515 1,722 1,416 Operating expenses 56 46 127 135 General supplies and expenses 264 195 926 645 Depreciation and amortization 50 42 149 125 -------- -------- -------- -------- Total operating costs and expenses 8,055 8,078 26,409 24,667 -------- -------- -------- -------- Operating income 235 213 646 777 Other income (expense): Interest expense (45) (48) (148) (149) Other, net 21 74 23 73 -------- -------- -------- -------- Income before provision for income taxes 211 239 521 701 Income tax expense -- 15 -- 73 -------- -------- -------- -------- Net income $ 211 $ 224 $ 521 $ 628 ======== ======== ======== ======== Earnings per common share: Basic $ 0.05 $ 0.05 $ 0.12 $ 0.15 ======== ======== ======== ======== Diluted $ 0.04 $ 0.04 $ 0.10 $ 0.13 ======== ======== ======== ========
The accompanying notes are an integral part of these condensed financial statements. 4 COUNTRY WIDE TRANSPORT SERVICES, INC. and Consolidated Subsidiary Companies Condensed Consolidated Statements of Cash Flows (Unaudited) (In Thousands)
Nine Months Ended March 31, -------------------- 1999 1998 -------- -------- Cash flows from operating activities: Net income $ 521 $ 628 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 149 125 (Increase) decrease in: Accounts receivable 839 (473) Accounts receivable, miscellaneous (36) (1) Drivers advances (3) (10) Prepaid expenses (18) (20) Deposits (2) -- Increase (decrease) in: Notes Payable - current portion -- (160) Accounts payable and accrued liabilities (813) (52) Liabilities in excess of assets of discontinued subsidiaries (23) (78) Liabilities in excess of assets of discontinued operations -- (81) -------- -------- Net cash provided by (used in) operating activities 614 (122) -------- -------- Cash flows from investing activities: Additions to property and equipment (42) (102) -------- -------- Net cash (used in) investing activities (42) (102) -------- -------- Cash flows from financing activities: Principal payments on borrowings $(28,143) $(25,102) Proceeds from borrowings 27,573 25,324 -------- -------- Net cash provided by (used in) financing activities (570) 222 -------- -------- Increase (decrease) in cash 2 (2) Cash, beginning of period 6 10 -------- -------- Cash, end of period $ 8 $ 8 ======== ======== Supplemental disclosure of cash flow information: Cash paid for: Interest $ 159 $ 123 ======== ======== Income taxes $ -- $ 73 ======== ========
The accompanying notes are an integral part of these condensed financial statements. 5 COUNTRY WIDE TRANSPORT SERVICES, INC. and Consolidated Subsidiary Companies Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Summary of Significant Accounting Policies The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in the Company's Annual Report to Stockholders for the year ended June 30, 1998 2. Statement of Information Furnished The accompanying unaudited consolidated financial statements have been prepared in accordance with Form 10-Q instructions and in the opinion of management contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of March 31, 1999, the results of operations for the three months and nine months ended March 31, 1999 and 1998 and the cash flows for the nine months ended March 31, 1999 and 1998. The results of operations for the three and nine month periods ended March 31, 1999 and 1998 are not necessarily indicative of the results to be expected for the full year. These results have been determined on the basis of generally accepted accounting principles and practices applied consistently with those used in the preparation of the Company's 1998 Annual Report. Certain information and footnote disclosures normally included in financial statements presented in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. 3. Property and Equipment Property and equipment consisted of the following (000 omitted):
March 31, June 30, Estimated 1999 1998 Useful Lives ------------------ ----------------- ------------------ Furniture and office equipment $ 305 $ 268 4 to 5 years Leasehold improvements 158 154 life of lease ------------------ ----------------- 463 422 Less accumulated depreciation and amortization (217) (159) ------------------- ------------------ $ 246 $ 263 ================== =================
4. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following (000 omitted): March 31, June 30, 1999 1998 ------ ------ Accounts payable $2,507 $2,913 Accrued purchased transportation 1,535 1,948 Other accrued expenses 233 227 ------ ------ $4,275 $5,088 ====== ====== 6 5. Earnings Per Share (In Thousands, Except Per Share Data)
For the Three For the Three Months Ended Months Ended March 31, March 31 ----------------------- ----------------------- 1999 1998 1999 1998 ---------- ---------- ---------- ---------- Basic Earnings Per Share Net income $ 211 $ 224 $ 521 $ 628 Less - preferred stock dividends -- -- -- -- ---------- ---------- ---------- ---------- Net income applicable to common shareholders $ 211 $ 224 $ 521 $ 628 ========== ========== ========== ========== Weighted average number of common shares 4,248,100 4,248,100 4,248,100 4,248,100 ========== ========== ========== ========== Basic Earnings per Share $ 0.05 $ 0.05 $ 0.12 $ .15 ========== ========== ========== ========== Diluted Earnings per Share Net income from basic income per common share $ 211 $ 224 $ 521 $ 628 Add: preferred stock dividend -- -- -- -- ---------- ---------- ---------- ---------- Net income for diluted earnings per share $ 211 $ 224 $ 521 $ 628 ========== ========== ========== ========== Weighted average number of shares used in calculating basic earnings per common share 4,248,100 4,248,100 4,248,100 4,248,100 Add - common equivalent shares (determined using the "treasury stock" method) representing shares issuable upon exercise of options 720,126 755,007 746,088 736,059 ---------- ---------- ---------- ---------- Weighted average number of shares used in calculation of diluted earnings per share 4,968,276 5,003,107 4,994,188 4,984,159 ========== ========== ========== ========== Diluted Earnings per Share $ 0.04 $ 0.04 $ 0.10 $ .13 ========== ========== ========== ==========
7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net income for the three and nine months ended March 31, 1999, amounted to $210,568 and $521,172 respectively compared to $223,229 and $628,008 for the prior year periods. Revenue for the three month period ended March 31, 1999, was $8,289,743 as compared to $8,291,391 for the prior year period. For the nine month period ended March 31, 1999, the revenue increased 6.3% to $27,055,444 from $25,443,909 for the prior year period. The increase was due to increased account penetration. Operating costs for the three month period ended March 31, 1999, decreased $23,967 and increased $1,743,399 for the nine months ended March 31, 1999. As a percentage of sales, operating costs for the three and nine month period decreased 0.3% and increased 0.7% for the respective prior year period. Depreciation and amortization expense for the three month and nine month period ended March 1999, was $49,982 and $148,643 as compared with $42,338 and $124,615 for the respective prior year periods. Interest expense was $45,375 for the three month period and $147,727 for the nine month period as compared to $48,108 and $149,388 for the prior year periods. During the period the Company was able to introduce new business and reduce expenses which enabled the results to equal the prior year three month period. LIQUIDITY AND CAPITAL RESOURCES On April 29, 1997, the Company, through its Vertex Transportation, Inc. subsidiary, secured financing with a commercial bank. The facility is a three year contract which allows for borrowings of up to $4,000,000 which are limited to 80% of eligible accounts receivable. The agreement bears an interest rate of the bank's prime rate plus 2 1/2%. At March 31, 1999 the Company had borrowings of $1,944,015 and unused borrowing capacity of $1,301,539. At March 31, 1999, the Company's ratio of current assets to current liabilities and its debt to equity were 1.1:1 and 4.9:1 respectively, as compared to 1.1:1 and 9.9:1 respectively at June 30, 1998. The Company ended the March 31, 1999 period with $8,000 of cash and working capital of $535,000. Based upon the Company's expected cash flow from operations and funds available from it's April 29, 1997 credit facility, management believes that the Company's capital resources are sufficient to meet its present and anticipated operating needs. Year 2000 Issues The Company believes that the general nature of its business operations limits its risks with respect to Year 2000 issues, with the state of readiness of its own computer system being the key consideration. Most of the Company's business is conducted by telephone, fax, e-mail, and mail communications with customers and transportation providers. The Company's computer system is independent of external computers, except for e-mail Internet communications. Generally orders are taken by phone, and shipping arrangements are made by phone, with subsequent written confirmations. The Company uses its internal computer system to keep 8 track of orders and related expenses and billing information and eventually to provide accounting for the business transactions and the Company's financial statements. All data used by the computer is entered at the Company's offices by employees. The independent developer of the Company's customized software system has advised the Company that the system, including computer firmware, is Year 2000 compliant. In spring 1999 the Company will be administering testing scenarios. If the computer system needed even major overhaul in order to become Year 2000 compliant, the Company believes that necessary expense and time will be allocated to do it. The Company believes that Year 2000 problems that its customers might experience are as likely to increase the Company's business and results of operations as they are to decrease them. If any customers whose shipping needs are significantly managed by computers do in fact experience Year 2000 problems, they probably would need to use freight forwarders more, in order to find available carriers who can make timely deliveries. Even with that increase in business, of course, problems with finding, negotiating, and managing the shipments and then billing and collecting for them could result in the Company experiencing higher costs and delayed receipts on billings, thereby negatively affecting margins on Company business. The Company believes that Year 2000 problems that the transportation providers might experience could generally impair the availability of transportation and the efficiency with which rolling stock is used. This problem, too, appears as likely to increase Company business and results of operations as to decrease them, with the carriers becoming more dependent on freight forwarders for finding and arranging ways to fill the rolling stock for various trips. With such a less efficient system, of course, the Company's overhead probably would increase, thereby negatively affecting margins on Company business. Lastly, the Company also believes that it does not have significant exposure to embedded technology problems, except for possible problems that could have widespread effects. The Company's offices are in a stand-alone, single story building with basic utilities and HVAC and security systems, each which could be replaced without material expense to the Company. Thus, the Company's primary exposure to embedded technology problems appears to focus on communications and utilities. If electricity became unavailable or erratic, or if telephone, fax, e-mail, and/ or mail systems became unusable or erratic, the Company might have severe difficulties in maintaining its business operations. The Company does not have a contingency plan with respect to a possible loss of electricity, telephone, or mail systems. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. 9 COUNTRY WIDE TRANSPORT SERVICES, INC. and Consolidated Subsidiary Companies Part II. ITEM 5. OTHER INFORMATION Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Reports on Form 8-K: 1. None. (B) Exhibits: 1. None 10 COUNTRY WIDE TRANSPORT SERVICES, INC. and Consolidated Subsidiary Companies SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on it's behalf by the undersigned thereunto duly authorized. COUNTRY WIDE TRANSPORT SERVICES, INC. Registrant DATED: May 6, 1999 S/Timothy Lepper -------------------------------------------- Timothy Lepper, President, Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer 11 EX-27 2 FDS --
5 1,000 9-MOS JUN-30-1999 JUL-01-1998 MAR-31-1999 8 0 4,932 75 0 4,937 463 217 7,648 4,942 0 0 0 425 8,848 7,648 27,055 27,055 25,335 26,410 (23) 0 148 521 0 521 0 0 0 521 .122 .104
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