-----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, CCtSLEYc5yTU+SIvEuBJXORQ/6HcyQBdxy+JENNZ5GPtBsAaQm8G8RkATBGP15t/ 8eyjoiDLaLu9+iKoU5fnKw== 0000891554-98-000573.txt : 19980514 0000891554-98-000573.hdr.sgml : 19980514 ACCESSION NUMBER: 0000891554-98-000573 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980513 SROS: NASD 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: 98617894 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 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarter Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended March 31, 1998 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, 1998 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, 1998 and June 30, 1997 3 Condensed Consolidated Statements of Operations-- Three Months Ended March 31, 1998 and 1997, and Nine Months Ended March 31, 1998 and 1997 4 Condensed Consolidated Statements of Cash Flows--Nine Months Ended March 31, 1998 and 1997 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, 1998 1997* ------- ------- ASSETS (Unaudited) Current assets: Cash $ 8 $ 10 Accounts receivable, net 4,481 4,009 Accounts receivable, miscellaneous 48 47 Driver advances 26 16 Prepaid expenses 69 49 ------- ------- Total current assets 4,632 4,131 Property and equipment, net 177 110 Other assets: Deposits 17 8 Excess of purchase price over fair market value of net assets acquired, net 2,549 2,638 ------- ------- Total Assets $ 7,375 $ 6,887 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable and current portion of long-term debt $ -- $ 160 Accounts payable and accrued liabilities 4,561 4,612 Liabilities in excess of assets of discontinued subsidiary 326 404 Liabilities in excess of assets of discontinued operations 42 123 ------- ------- Total current liabilities 4,929 5,299 Long-term debt, less current portion 1,970 1,748 Total liabilities 6,899 7,047 ------- ------- Stockholders' equity (deficit): 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, 4,248,000 shares issued and outstanding at March 31, 1998 and June 30, 1997, respectively 425 425 Additional paid-in capital 8,110 8,110 Retained earnings (8,059) (8,695) ------- ------- Total stockholders' equity (deficit) 476 (160) ------- ------- Total liabilities and stockholders' equity (deficit) $ 7,375 $ 6,887 ======= =======
* 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, --------------------------- --------------------------- 1998 1997 1998 1997 ----------- ----------- ----------- ----------- Transportation revenue $ 8,291 $ 6,149 $ 25,444 $ 26,737 ----------- ----------- ----------- ----------- Operating costs and expenses: Purchased transportation 7,280 5,277 22,346 19,970 Salaries and related expenses 515 423 1,416 3,161 Operating expenses 46 33 135 1,131 Revenue equipment rentals -- -- -- 827 General supplies and expenses 195 182 645 2,379 Depreciation and amortization 42 41 125 2,592 ----------- ----------- ----------- ----------- Total operating costs and expenses 8,078 5,956 24,667 30,060 ----------- ----------- ----------- ----------- Operating income (loss) 213 193 777 (3,323) Other income (expense): Interest expense (48) (24) (149) (375) Other, net 74 -- 73 Gain (loss) on disposition of assets -- -- -- (406) ----------- ----------- ----------- ----------- Income (loss) before provision for income taxes 239 169 701 (4,104) Income tax expense 15 13 73 34 ----------- ----------- ----------- ----------- Net income (loss) $ 224 $ 156 $ 628 $ (4,138) =========== =========== =========== =========== Earnings (loss) per common share: Basic $ 0.05 $ 0.16 $ 0.15 $ (4.31) =========== =========== =========== =========== Diluted $ 0.04 $ 0.16 $ 0.13 $ (4.31) =========== =========== =========== =========== Weighted average number of common shares 4,248,100* 960,097* 4,248,100* 960,097* =========== =========== =========== ===========
* Reflects May 15, 1997 one for five reverse split 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, -------------------- 1998 1997 -------- -------- Cash flows from operating activities: Net income (loss) $ 628 $ (4,138) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 125 2,592 (Gain) Loss on disposal of assets -- 406 Provision for uncollectible accounts receivable -- (78) (Increase) decrease in: Accounts receivable (473) 1,821 Accounts receivable, miscellaneous (1) 37 Drivers advances (10) 192 Inventories -- 29 Prepaid expenses (20) 317 Deposits 270 Other assets -- -- Increase (decrease) in: Notes Payable and Current Portion of Long Term Debt (160) -- Accounts payable and accrued liabilities (52) (14) Liabilities in excess of assets of discontinued subsidiaries (78) 1,022 Liabilities in excess of assets of discontinued operations (81) (125) -------- -------- Net cash provided by operating activities (122) 2,331 -------- -------- Cash flows from investing activities: Collections on notes receivable -- 1 Additions to property and equipment (102) (90) Proceeds from disposal of property and equipment -- 93 -------- -------- Net cash provided by (used in) investing activities (102) 4 -------- -------- Cash flows from financing activities: Principal payments on borrowings $(25,102) $(29,925) Proceeds from borrowings 25,324 27,558 -------- -------- Net cash (used in) financing activities 222 (2,367) -------- -------- (Decrease) in cash (2) (32) Cash, beginning of period 10 37 -------- -------- Cash, end of period $ 8 $ 5 ======== ======== Supplemental disclosure of cash flow information: Cash paid for: Interest $ 123 $ 375 ======== ======== Income taxes $ 73 $ 34 ======== ========
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, 1997 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, 1998, the results of operations for the three months and nine months ended March 31, 1998 and 1997 and the cash flows for the nine months ended March 31, 1998 and 1997. The results of operations for the three and nine month periods ended March 31, 1998 and 1997 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 1997 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 1998 1997 Useful Lives -------- -------- --------------- Furniture and office equipment $ 224 $ 144 4 to 5 years Leasehold improvements 94 72 life of lease -------- -------- 318 216 Less accumulated depreciation and amortization (141) (106) --------- --------- $ 177 $ 110 ======== ========
4. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following (000 omitted): March 31 June 30 1998 1997 ------ ------ Accounts payable $2,267 $2,331 Accrued purchased transportation 1,821 1,448 Other accrued expenses 473 833 ------ ------ $4,561 $4,612 ====== ====== 6 5. Earnings Per Share (In Thousands, Except Per Share Data)
For the Three For the Nine Months Ended Months Ended March 31, March 31, ----------------------- ----------------------- 1998 1997 1998 1997 ---------- ---------- ---------- ---------- Basic Earnings Per Share Net income (loss) $ 224 $ 156 $ 628 $ (4,138) Less - preferred stock dividends -- -- -- -- ---------- ---------- ---------- ---------- Net income applicable to common shareholders $ 224 $ 156 $ 628 $ (4,138) ========== ========== ========== ========== Weighted average number of common shares 4,248,100 960,000 4,248,100 960,000 ========== ========== ========== ========== Basic Earnings per Share 0.05 0.16 0.15 (4.31) ========== ========== ========== ========== Diluted Earnings per Share Net income from basic income per common share 224 156 628 (4,138) Add: preferred stock dividend -- -- -- -- ---------- ---------- ---------- ---------- Net income for diluted earnings per share 224 156 628 (4,138) ========== ========== ========== ========== Weighted average number of shares used in calculating basic earnings per common share 4,248,100 960,000 4,248,100 960,000 Add - common equivalent shares (determined using the "treasury stock" method) representing shares issuable upon exercise of options 755,007 -- 736,059 -- ---------- ---------- ---------- ---------- Weighted average number of shares used in calculation of diluted earnings per share 5,003,107 960,000 4,984,159 960,000 ========== ========== ========== ========== Diluted Earnings per Share $ 0.04 $ 0.16 $ 0.13 $ (4.31) ========== ========== ========== ==========
7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net income for the three month period ended March 31, 1998, increased 43.4% to $223,229 from $155,622 for the prior year period. For the nine month period ended March 31, 1998, net income improved to $628,008 from a loss of $(4,138,193) for the prior year period. These results were due to the liquidation of a trucking subsidiary effective December 31, 1996 and improved results from the Company's logistics subsidiary, Vertex Transportation, Inc. Transportation revenue for the three month period ended March 31, 1998, increased 34.9% to $8,291,391 from $6,148,516 for the same three month period of fiscal year 1997, while transportation revenue decreased 4.8% to $25,443,909 from $26,736,558 for the nine months ended March 31, 1998. The reduction of revenue for the nine month period ended March 31, 1998, as compared to the previous period, was a result of the liquidation of the trucking subsidiary effective December 31, 1996, which had revenue during this nine month period of $7,587,771. Operating costs for the three month period ended March 31, 1998, increased 35.6% to $8,078,019 from $5,955,833 for the prior year period. This increase was due to the increase in business levels. For the nine month period ended March 31, 1998, operating costs decreased 17.9% to $24,666,500 from $30,060,000 for the prior year period. This decrease was due to the liquidation of the trucking subsidiary during the prior year period. As a percentage of sales, operating costs for the three month period ended March 31, 1998, increased 5.4% from the prior year period and for the nine month period ended March 31, 1998, decreased 15.1% for the comparable year period. This change is primarily attributable to the discontinuance of the trucking subsidiary partially offset by increased purchase transportation costs inherit in the logistics business. Depreciation and amortization expense for the three month period and nine month period ended March 1998, was $42,338 and $124,615 as compared with $41,138 and $2,591,277 for the respective prior year periods. Interest expense for the three month period ended March 31, 1998, increased to $48,108 from $24,048 for the prior year period and decreased to $149,388 from $374,933 for the respective nine month period. The decrease in depreciation and amortization expense in the nine month period is due to the liquidation of the trucking subsidiary on December 31, 1996, and the sale of the revenue equipment. The increase in interest expense during the three month period was due to the increase in business and acceleration of purchase transportation while the decrease during the nine month period is directly related to the aforementioned liquidation of the trucking subsidiary. Having experienced significant losses in its trucking operation, Country Wide Truck Service, Inc., a Company subsidiary, discontinued its operation on December 31, 1996, and began an orderly liquidation process. On December 31, 1996, a General Assignment of all assets of CW truck was made for the pro rata benefit of all creditors. In conjunction with the General Assignment, on December 31, 1996, all of the rolling stock assets were sold for the outstanding debt on the equipment. The company maintains a continuing corporate guarantee on the debt secured by the rolling stock. Revenues applicable to the liquidated subsidiary for the nine month period ended March 31, 1997, were $7,587,000. During the nine month period ended March 31, 1997 CW Truck generated a loss of $(4,442,000). Results of operation for CW Truck have been classified as continuing operations in the Company's financial statement for all periods presented. The increase in sales for the Company's Vertex Transportation, Inc. subsidiary for the three month period ended March 31, 1998, to $8,291,391 from $6,149,000 in the prior year period resulted in an increase in that subsidiary's net income of 90% to $281,152 from $148,014. The nine month period ended March 31, 1998, sales increased 21.3% to $25,443,909 from $20,980,772 in the prior year period resulting in an increase in that subsidiary's net income of 80% to $929,937 from $516,591 for the prior year period. 8 LIQUIDITY AND CAPITAL RESOURCES On April 29, 1997, the Company, through its Vertex Transportation, Inc. subsidiary, secured new financing with a commercial bank. The new facility is a three year contract which allows for borrowing 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, 1998 the Company had borrowings of $1,969,869 and unused borrowing capacity of $1,300,003. At March 31, 1998, the Company's ratio of current assets to current liabilities and its debt to equity were 0.9:1 and 4.1:1 respectively, as compared to 0.8:1 and (44):1 respectively at June 30, 1997. The Company ended the March 31, 1998 period with $8,000 of cash and negative working capital of $297,000. Based upon the Company's expected cash flow from operations and funds available as of April 29, 1997, from it's new credit facility, management believes that the Company's capital resources are sufficient to meet its present and anticipated operating needs. 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 Effective December 16, 1997, the Securities and Exchange Commission declared effective an S-2 Registration Statement which was filed on behalf of certain selling shareholders as outlined in the S-2 Registration Statement. This statement effectively registered 3,288,000 of the Company's common stock. After this offering, the Company has outstanding 4,248,117 shares. 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 8, 1998 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-30-1998 JUL-01-1997 MAR-31-1998 8 0 4,529 0 0 4,632 318 141 7,375 4,929 0 0 0 425 51 7,375 0 25,444 23,897 24,667 (73) 0 149 701 73 628 0 0 0 628 .15 .13
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