-----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, MGw0lSqceyEBnchXogqdh1/DQsenQyXUHqtjQiqca21L64tWPXEAFnKWEyvRo+ka 8beJ6u8JUTdhatXWEJzcLA== 0000931731-97-000274.txt : 19971119 0000931731-97-000274.hdr.sgml : 19971119 ACCESSION NUMBER: 0000931731-97-000274 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971118 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PST VANS INC CENTRAL INDEX KEY: 0000933589 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 870411704 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25506 FILM NUMBER: 97723668 BUSINESS ADDRESS: STREET 1: 1901 W 2100 SOUTH CITY: SALT LAKE CITY STATE: UT ZIP: 84119 BUSINESS PHONE: 8019752500 MAIL ADDRESS: STREET 1: 1901 W 2100 S CITY: SALT LAKE CITY STATE: UT ZIP: 84119 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 Commission File No. 0-25506 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 PST VANS, INC. (Exact name of registrant as specified in this charter) Utah 87-0411704 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1901 West 2100 South Salt Lake City, UT 84119 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 801-975-2500 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 outstanding of Registrant=s Common Stock, par value $0.001 per share, as of October 31, 1997, was 4,239,945 shares. PST VANS, INC. INDEX PART I, FINANCIAL INFORMATION Page Number ------ Item 1. Financial Statements Condensed Balance Sheets as of September 30, 1997 (unaudited) and December 31, 1996....................................... 1 Condensed Statements of Operations (unaudited) for the Three and Nine Months periods ended September 30, 1997 and September 30, 1996.................................................. 2 Condensed Statements of Cash Flows (unaudited) for the Nine Month periods ended September 30, 1997 and September 30, 1996.................................................................... 3 Notes to Condensed Financial Statements................................. 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................................... 6 PART II, OTHER INFORMATION Item 1. Legal Proceedings................................................... * Item 2. Changes in Securities............................................... * Item 3. Defaults Upon Senior Securities..................................... * Item 4. Submission of Matters to a Vote of Security Holders................. * Item 5. Other Information................................................... * Item 6. Exhibits and Reports on Form 8-K.................................... 10 *No Information Submitted Under This Caption PST VANS, INC. CONDENSED BALANCE SHEETS ASSETS
September 30, December 31, 1997 1996 ------------ ----------- (unaudited) CURRENT ASSETS: Cash $ 2,019,640 $ 4,098,361 Receivables, net 16,984,814 14,607,292 Prepaid expenses and other 3,149,370 3,258,669 Inventories and operating supplies 631,661 689,875 Deposits 362,535 353,437 ------------ ------------ Total current assets 23,148,020 23,007,634 ------------ ------------ PROPERTY AND EQUIPMENT, net 48,711,706 58,116,763 GOODWILL, net 8,408,178 8,612,150 OTHER ASSETS, net 325,635 523,539 ------------ ------------ TOTAL ASSETS $ 80,593,539 $ 90,260,086 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Line of Credit $ 5,309,805 $ 0 Current portion of long-term obligations 1,188,602 1,388,581 Current portion of capitalized lease obligations 23,969,432 18,708,614 Accounts payable 4,053,565 4,140,985 Current portion of accrued claims payable 4,817,840 5,456,316 Accrued liabilities 3,464,735 2,469,915 ------------ ------------ Total current liabilities 42,803,979 32,164,411 ------------ ------------ LONG-TERM ACCRUED CLAIMS PAYABLE, net of current portion 1,638,691 1,429,227 ------------ ------------ LONG-TERM OBLIGATIONS, net of current portion 2,177,926 1,986,214 ------------ ------------ CAPITALIZED LEASE OBLIGATIONS, net of current portion 16,957,334 32,907,995 ------------ ------------ STOCKHOLDER'S EQUITY: Common stock 4,240 4,217 Additional paid-in capital 49,828,247 49,759,238 Accumulated deficit (32,816,878) (27,991,216) ------------ ------------ Total stockholders' equity 17,015,609 21,772,239 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 80,593,539 $ 90,260,086 ============ ============
See accompanying notes to condensed financial statements 1 PST VANS, INC. CONDENSED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended Nine Months Ended ------------------------------ ------------------------------ September 30, September 30, September 30, September 30, 1997 1996 1997 1996 ------------- ------------- ------------- ------------- REVENUES $ 35,760,263 $ 36,297,413 $ 105,596,782 $ 110,961,630 ------------- ------------- ------------- ------------- COST AND EXPENSES: Salaries, wages and benefits 11,073,127 10,820,348 32,573,589 32,860,728 Purchased transportation 166,130,358 7,779,282 18,980,948 24,908,947 Fuel and fuel taxes 5,420,846 5,114,328 16,315,505 15,428,120 Depreciation and amortization 3,002,657 3,263,477 9,164,195 9,950,253 Insurance and claims 3,944,489 1,894,238 8,979,185 7,110,398 Revenue equipment lease expense 1,970,832 1,837,571 5,556,919 6,064,963 Maintenance 2,387,938 2,032,899 6,208,561 5,717,257 General supplies and expense 1,810,090 1,374,371 4,513,179 4,239,349 Taxes and licenses 734,301 793,971 2,154,247 2,549,636 Communications and utilities 726,013 831,492 2,248,339 2,577,582 Amortization of goodwill 67,991 67,991 203,972 203,972 (Gain) Loss on disposition of assets 303,597 (329,678) 273,236 (1,585,561) ------------- ------------- ------------- ------------- 37,572,239 35,480,290 107,171,875 110,025,644 ------------- ------------- ------------- ------------- OPERATING INCOME (LOSS) (1,811,976) 817,123 (1,575,093) 935,986 ------------- ------------- ------------- ------------- OTHER INCOME (EXPENSES): Interest expense (1,144,038) (1,188,172) (3,347,916) (3,845,904) Other income (expense) 55,698 24,222 97,347 114,638 ------------- ------------- ------------- ------------- (1,088,340) (1,163,950) (3,250,569) (3,731,266) ------------- ------------- ------------- ------------- LOSS BEFORE PROVISION FOR INCOME TAXES (2,900,316) (346,827) (4,825,662) (2,795,280) PROVISION FOR INCOME TAXES -- -- -- -- ------------- ------------- ------------- ------------- NET LOSS $ (2,900,316) $ (346,827) $ (4,825,662) $ (2,795,280) ============= ============= ============= ============= NET LOSS PER COMMON SHARE $ (0.68) $ (0.08) $ (1.14) $ (0.66) ------------- ------------- ------------- ------------- WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 4,239,945 4,212,862 4,231,299 4,210,568 ------------- ------------- ------------- -------------
See accompanying notes to condensed financial statements 2 PST VANS, INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, ------------------------------- 1997 1996 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (4,825,662) $ (2,795,280) Adjustments to reconcile net loss to net cash provided by operating activities - Depreciation and amortization 9,368,167 10,154,225 Provision for losses on accounts receivable 766,848 960,687 (Gain) loss on sale of property and equipment 273,236 (1,585,561) Increase in receivables (3,144,370) (816,945) Increase in deposits (9,098) (448,923) Decrease in prepaid and other expenses 109,453 564,862 Decrease (increase) in inventories and operating supplies 58,061 (12,772) Decrease in other assets, net 197,903 227,019 Increase (decrease) in accounts payable (87,420) 128,937 Increase (decrease) in accrued claims payable (429,012) 332,506 Increase (decrease) in accrued liabilities 394,821 (477,484) ------------ ------------ Total adjustments 7,498,589 9,026,551 ------------ ------------ Net cash flows provided by operating activities 2,672,927 6,231,271 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment (2,384,482) (1,149,741) Proceeds from sale of property and equipment 2,888,297 4,097,996 ------------ ------------ Net cash flows provided by investing activities 503,815 2,948,255 ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Increase in line of credit 5,309,805 -- Proceeds from long-term debt 1,597,325 -- Principal payments on long-term obligations (1,541,782) (1,342,610) Principal payments on capitalized lease obligations (10,689,843) (8,024,856) Proceeds from issuance of common stock, net 69,032 27,970 ------------ ------------ Net cash flows used in financing activities (5,255,463) (9,339,496) ------------ ------------ NET DECREASE IN CASH (2,078,721) (159,970) CASH AT BEGINNING OF PERIOD 4,098,361 4,249,981 ------------ ------------ CASH AT END OF PERIOD $ 2,019,640 $ 4,090,011 ============ ============
See accompanying notes to condensed financial statements 3 PST VANS, INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, ------------------------------- 1997 1996 ------------- -------------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for - Interest $ 3,410,232 $ 3,875,478 Income taxes 35,633 85,395 SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: Equipment disposed of as satisfaction of capitalized lease obligations $ 932,690 -- See accompanying notes to condensed financial statements 4 PST VANS, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS Note 1. Financial Information: The accompanying condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes the following disclosures are adequate to make the information presented not misleading. In the opinion of Management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for a full year. These condensed financial statements and notes thereto should be read in conjunction with the Company's financial statements and notes thereto, included in the Company's Form 10-K for the year ended December 31, 1996. Note 2. Income Taxes: Income taxes for the interim periods are based upon the Company's estimated effective annual tax rates. The Company's effective tax rate (income tax expense divided by income before provision for income taxes) was zero for the three and nine months ended September 30, 1997, and zero for the three and nine months ended September 30, 1996, respectively, as a result of the Company not recording any benefit on its year-to-date pre-tax losses. Note 3 Recent Accounting Pronouncement In February 1997, the Financial Accounting Standards Board released Statement of Financial Accounting Standards No. 128 "Earnings Per Share" (SFAS 128). This statement specifies the computation, presentation, and disclosure requirements for earnings per share (EPS) for financial statements issued for all periods ending after December 15, 1997. SFAS 128 simplifies the standards for computing EPS previously found in APB Opinion No. 15 and replaces the presentation for Primary EPS and Fully Diluted EPS. When the Company incurs a loss, common stock equivalents are not included in the calculation of the weighted average number of shares outstanding as they would be anti-dilutive. The adoption of SFAS 128 is not expected to have a significant impact on the Company's calculation of its net loss per common share. 5 PST VANS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Comparison of the Three Months Ended September 30, 1997 to the Three Months Ended September 30, 1996 Revenues decreased by 1.5% to $35.8 million for the three months ended September 30, 1997, compared to $36.3 million for the three months ended September 30, 1996. The decline in revenues resulted primarily from a 2.6% decrease in average revenue equipment to 1147 tractors for the three months ended September 30, 1997, compared to 1177 tractors for the three months ended September 30, 1996. Revenues in the three months ended September 30, 1997, were positively affected by rate increases averaging 1.5% implemented during the second quarter of 1997. The decrease in revenue equipment was due primarily to a shortage of qualified independent contractors which management believes will continue in the fourth quarter of 1997 and 1998. Operating costs and expenses were 105.1% of revenues for the three months ended September 30, 1997, compared to 97.7% of revenues for the three months ended September 30, 1996. The increase in operating costs and expenses in the quarter ended September 30, 1997, as a percent of revenue, resulted primarily from an approximately $2.0 million increase in insurance claims expense, and a loss on the disposition of assets of approximately $300,000 compared to a gain on the disposition of assets of approximately $300,000 in the three months ended September 30, 1996, as discussed below. Salaries, wages and benefits increased to 31.0% of revenues for the three months ended September 30, 1997, compared to 29.8% of revenues for the three months ended September 30, 1996 and purchased transportation decreased to 17.1% of revenues for the three months ended September 30, 1997, compared to 21.4% of revenues for the three months ended September 30, 1996. These changes resulted primarily from the reduction in independent contractor revenue equipment as described above. Independent contractors are under contract with the Company and are responsible for their own salaries, wages and benefits, fuel, maintenance and depreciation. Independent contractor costs are classified as purchased transportation expenses. Fuel and fuel taxes increased to 15.2% of revenues for the three months ended September 30, 1997, compared to 14.1% of revenues for the three months ended September 30, 1996, as a result of increased fuel prices and the Company having no fuel secured under guaranteed price contracts during the third quarter of 1997 due to higher contract fuel prices during the three months ended September 30, 1997. In order to reduce the vulnerability of the Company to rapid increases in the price of fuel, the Company has historically entered into purchase contracts with fuel suppliers from time to time for a portion of its estimated fuel requirements at guaranteed prices. As of September 30, 1997, the Company had entered into various agreements with fuel suppliers to purchase approximately 17% of its estimated fuel needs during the fourth quarter of 1997 and 6% of its fuel needs during the first quarter of 1998 at a guaranteed price. The Company has also implemented fuel surcharges to many of its customers. Although this arrangement helps reduce the Company's vulnerability to rapid increases in the price of fuel, the Company will not benefit from a decrease in the price of fuel to the extent of its commitment to purchase fuel under these contracts. Management expects the cost of fuel to remain high through the fourth quarter, but anticipates that the purchase contracts and fuel surcharges will help offset some of the increase in the cost of fuel. Maintenance expense increased to 6.7% of revenues for the three months ended September 30, 1997, compared to 5.6% of revenues for the three months ended September 30, 1996, as a result of increased maintenance costs associated with an older tractor and trailer fleet, and repairs on tractors that have exceeded factory warrantees. The average age of Company owned tractors increased to 2.4 years during the three months ended September 30, 1997 compared to 1.5 years for the three months ended September 30, 1996. Insurance and claims increased to 11.0% of revenues for the three months ended September 30, 1997, from 5.2% of revenues for the three months ended September 30, 1996, primarily as a result of increases in insurance claims reserves of approximately $2,400,000 following recent adverse developments in certain claims which occurred during a period when the Company's insurance deductibles ranged from $325,000 to $500,000. Effective July 1, 1997, the Company significantly reduced its liability insurance deductible and effective November 1, 1997, placed damage coverage at a low deductible on company owned tractors which will increase the premium, but in Management's opinion will reduce overall costs from 6 recent levels experienced by the Company. Management continues to review accidents to determine what actions may be taken to reduce future claims costs. Communications and utilities decreased to 2.0% of revenues for the three months ended September 30, 1997, compared to 2.3% of revenues for the three months ended September 30, 1996, primarily as a result of the Company discontinuing use of a cellular on-board communications system in its fleet of tractors. The Company is currently installing the "Qualcomm" satellite on-board communications system in its tractors. The use of the "Qualcomm" system generally enhances the Company's ability to track loads, service customers and communicate with drivers and monitor drivers. Installation of the "Qualcomm" system is expected to be completed in the fourth quarter of 1997. Management believes that the savings that should be realized from better equipment utilization should exceed the cost of the "Qualcomm" system. General supplies and expenses increased to 5.1% of revenues for the three months ended September 30, 1997, compared to 3.8% of revenues for the three months ended September 30, 1996, primarily because of an increase in the allowance for doubtful accounts due an increase in accounts receivable that had aged to over 60 days. The increased aging in accounts receivable was due to an electronic data processing problem that occurred during the third quarter and was resolved in the fourth quarter Loss on disposition of assets was $303597 for the three months ended September 30, 1997 as compared to a gain of $329,678 for the three months ended September 30, 1996. This change was because of accrued disposition costs of approximately $600,000 related to tractors to be returned to the lessor at the expiration of their leases. As a consequence of the items discussed above, the Company incurred a loss before provision for income taxes for the three months ended September 30, 1997, of $2,900,316 compared to a loss before provision for income taxes of $346,827 for the three months ended September 30, 1996. The Company's effective tax rate (income tax expense divided by income before income taxes) was zero for the three months ended September 30, 1997, and for the three months ended September 30, 199, as a result of the Company not recording any benefit on its pretax loss. Comparison of the Nine Months Ended September 30, 1997 to the Nine Months Ended September 30, 1996 Revenues decreased by 4.8% to $105.6 million for the nine months ended September 30, 1997, compared to $111.0 million for the nine months ended September 30, 1996. The decrease in revenues was a result of a 8.9% decrease in the average number of tractors to 1149 for the nine months ended September 30, 1997, compared to 1261 for the nine months ended September 30, 1996, offset by an increase in rates averaging 1.5% and a 3.0% increase in average miles per tractor. The decrease in revenue equipment was due primarily to a shortage of qualified independent contractors. Operating costs and expenses were 101.5% of revenues for the nine months ended September 30, 1997, compared to 99.2% of revenues for the nine months ended September 30, 1996. The increase in operating costs and expenses in the nine months ended September 30, 1997, as a percent of revenue, resulted primarily from an approximately $2.0 million increase in insurance claims expense, and a loss on the disposition of assets of approximately $300,000 compared to a gain on the disposition of assets of approximately $1.6 million for the nine months ended September 30, 1996, as discussed below. Salaries, wages and benefits increased to 30.8% of revenues for the nine months ended September 30, 1997, compared to 29.6 % for the nine months ended September 30, 1996, and purchased transportation decreased to 18.0% of revenue for the nine months ended September 30, 1997, compared to 22.4% for the nine months ended September 30, 1996. These changes resulted primarily from the reduction in independent contractor revenue equipment as described above. Independent contractors are under contract with the Company and are responsible for their own salaries, wages and benefits, fuel, maintenance and depreciation. Independent contractor costs are classified as purchased transportation expenses. Fuel and fuel taxes, net of fuel surcharges, increased to 15.5% of revenues for the nine months ended September 30, 1997, compared to 13.9% of revenues for the nine months ended September 30, 1996, as a result of a higher percentage of miles driven with Company tractors and an increase in fuel costs partially offset with fuel surcharges billed to customers and fuel purchase contracts. Management expects the cost of fuel to remain high through the remainder of the year. 7 Maintenance increased to 5.9% of revenues for the nine months ended September 30, 1997, compared to 5.2% of revenues for the nine months ended September 30, 1996, as a result of increased maintenance costs associated with an older tractor and trailer fleet, and repairs on tractors that have exceeded factory warrantees. The average age of Company owned tractors increased to 2.2 years during the nine months ended September 30, 1996, compared to 1.3 years for the nine months ended September 30, 1996. Insurance and claims increased to 8.5% of revenues for the nine months ended September 30, 1997, from 6.4% of revenues for the nine months ended September 30, 1996, primarily as a result of increases in insurance claims reserves of approximately $4,100,000 following adverse developments IN 1997 in certain claims which occurred during a period when the Company's insurance deductibles ranged from $325,000 to $500,000. The Company recently significantly reduced its liability insurance deductible and placed damage coverage at a low deductible on company owned tractors which will increase the premium, but in Management's opinion should help to reduce overall costs from recent levels as previously discussed. Management continues to review accidents to determine what actions may be taken to reduce future claims costs. General supplies and maintenance increased to 4.3% of revenue for the nine months ended June 30, 1997, compared to 3.8% of revenues for the nine months ended September 30, 1996, as a result of an increase in the allowance for doubtful accounts due an increase in accounts receivable that had aged to over 60 days. The increased aging in accounts receivable was due to an electronic data processing problem that occurred during the third quarter and was resolved in the fourth quarter Taxes and licenses decreased to 2.1% of revenues for the nine months ended September 30, 1997, compared to 2.3% of revenues for the nine months ended September 30, 1996, primarily as a result of decrease in the weighted average number of company owned tractors during the nine months ended September 30, 1997. Communications and utilities decreased to 2.1% of revenues for the nine months ended September 30, 1997, compared to 2.3% of revenues for the nine months ended September 30, 1996, primarily as a result of the Company discontinuing use of a cellular on-board communications system in its fleet of tractors. The Company is currently installing the "Qualcomm" satellite on-board communications system in its tractors. The use of the "Qualcomm" system generally enhances the Company's ability to track loads, service customers and communicate with drivers and monitor drivers. Installation of the "Qualcomm" system is expected to be completed in the fourth quarter of 1997. Loss on disposition of assets was $273,236 for the nine months ended September 30, 1997 as compared to a gain of $1,585,561 for the nine months ended September 30, 1996. This change was because of accrued disposition costs of approximately $600,000 related to tractors to be returned to the lessor at the expiration of their leases, and as a result of the Company selling its older trailers during the first nine months of 1996. As a consequence of the items discussed above, the Company incurred a loss before provision for income taxes for the nine months ended September 30, 1997, of $4,825,662, compared to a loss before provision for income taxes of $2,795,280 for the nine months ended September 30, 1996. The Company's effective tax rate (income tax expense divided by income before income taxes) was zero for the nine months ended September 30, 1997, and for the nine months ended September 30, 1996, as a result of the Company not recording any benefit on its pretax loss. Liquidity and Capital Resources The Company's sources of liquidity have been funds provided by operations, leases on revenue equipment and revolving lines of credit. The Company has a $11.5 million working capital line of credit with Congress Financial Corporation (Northwest) which expires August 1999. The Company anticipates that use of the line will be primarily for insurance related letters of credit as well as providing any short term cash requirements. As of September 30, 1997 the Company has utilized $10.3 million of this line of credit, $5.0 million for insurance related letters of credit, and $5.3 million of short term cash borrowings. The Congress Agreement restricts the payment of dividends and is secured by accounts receivable. The Company also has a credit facility with the Bank of New York for issuance of letters of credit up to $5.8 million which expires December 31, 1997. As of September 30, 1997, the Company had used $5.8 million of this facility, principally for letters of credit in favor of the Company's insurance carrier. As outstanding letters of credit issued under this credit facility are not 8 renewed, the maximum commitment available under this credit facility will be reduced by the amount of the expiring letters of credit. This credit facility had loan covenants which obligated the Company to maintain a required level of profitability and cash flow. On March 21, 1997, the Company and The Bank of New York entered into an amendment to this credit facility to delete certain financial covenants and add covenants requiring certain levels of tangible net worth for periods through and including December 31, 1997. The Company may be required to seek additional amendments of the revolving credit facility with The Bank of New York in the future based on actual operating results. The amendment also shortened the expiration date of the credit facility from December 31, 1998 to December 31, 1997. Management believes that following the expiration of the credit facility with The Bank of New York, the Company will be able to satisfy its anticipated insurance related letter of credit requirements, including the insurance related letter of credit requirements which are currently being met with letters of credit under the credit facility with The Bank of New York, under its working capital line of credit with Congress Financial Corporation (Northwest) or new credit facilities. There can be no assurance, however, that the Congress Financial Corporation (Northwest) credit facility will be sufficient to satisfy the Company's insurance related letter of credit requirements or that the Company will be able to obtain additional or new credit facilities on terms favorable to the Company, if at all. Net cash provided by operating activities totaled approximately $2.7 million for the nine months ended September 30, 1997. Net cash provided by investing activities (primarily selling of equipment) amounted to $0.5 million for the nine months ended September 30, 1997. Net payments on debt and capitalized lease obligations was $5.2 million for the nine months ended September 30, 1997. The Company expects capital expenditures for the remainder of 1997 to be approximately $3.5 million primarily for an onboard communication system. During the first nine months of 1997, the Company acquired $2.2 million of equipment, comprised primarily of trailers that the Company was leasing. Management believes that commitments available under the Company's lines of credit will be sufficient to meet the Company's capital requirements through 1997 However , the Company's business is capital intensive and will require the Company to seek additional debt and possibly equity capital to enable the Company to maintain a modern fleet. The Company's ability to obtain such financing could be affected by its operating results to the extent the Company continues to operate at a loss. In addition, the Company's need for additional equity or debt financing to meet its operational needs will be accelerated if the Company continues to operate at a loss. Whether such capital will be available on favorable terms, or at all, will depend on the Company's future operating results, prevailing economic and industry conditions and other factors over which the Company has little or no control. Seasonality In the trucking industry, revenues generally show a seasonal pattern as customers reduce shipments during and after the winter holiday season and its attendant weather variations. Operating expenses also tend to be higher during the cold weather months, primarily due to poorer fuel economy and increased maintenance costs. Inflation Inflation can be expected to have an impact on the Company's operations. The effect of inflation has been minimal over the past three years. This quarterly report on Form 10-Q may be deemed to contain certain forward-looking statements. These statements are subject to known and unknown risks and uncertainties, including decreased demand for freight, slower than anticipated economic conditions, shortages of drivers and such other risks as are identified and discussed herein and in the Company's filings with the Securities and Exchange Commission. These known and unknown risks and uncertainties could cause the Company's actual results in future periods to be materially different from any future performance suggested herein. 9 PART II, OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits -------- Exhibit 27.1 - Financial Data Schedule (b) Reports on Form 8-K ------------------- None 10 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 thereto duly authorized. PST VANS, INC. Date: November 14, 1997 By: \s\ Kenneth R. Norton ---------------------------------- Kenneth R. Norton Chief Executive Officer By: \s\ Neil R. Vos ---------------------------------- Neil R. Vos Chief Financial Officer EX-27 2 FDS --
5 9-MOS DEC-31-1997 JAN-01-1996 SEP-30-1997 2019640 0 16984814 0 631814 23148020 48711706 0 80593539 42803979 0 0 0 4240 17611369 80593539 105596782 105589782 0 106571875 (97347) 0 3347916 (4225622) 0 (4225622) 0 0 0 (4225622) (1.14) (1.14)
-----END PRIVACY-ENHANCED MESSAGE-----