Washington, D.C. 20549
FORM 10-Q
(Mark One)
{ X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITY
EXCHANGE ACT OF 1934.
For the quarterly period ended JUNE 30, 1999
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or
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 0-24180
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Florida 59-3239073
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(State or other jurisdiction of incorporation I.R.S. Employer
or organization) Identification No.)
MTL Inc.
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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.
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at June 30, 1999
------------------------------ ----------------------------------
(Common Stock, $.01 par value) 2,011,400
INDEX
Part I Financial Information Page No.
Item 1 Financial Statements
Condensed consolidated balance sheets -
June 30, 1999 (unaudited) and December 31, 1998 3-4
Condensed consolidated statements of operations -
three months and six months ended June 30, 1999
and 1998 (unaudited) 5-6
Condensed consolidated statements of cash flows -
six months ended June 30, 1999 and 1998 (unaudited) 7
Notes to condensed consolidated financial
statements 8-21
Item 2 Management's Discussion and Analysis
Of Financial Condition and Results
of Operations
Management's discussion and analysis of financial
condition and results of operations 22-25
Part II Other Information
Item 1 Legal proceedings 26
Item 4 Submission of matters to a vote of
security holders 26
Item 6 Exhibits
Reports on Form 8-K 26
Signatures 27
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June 30, December 31,
1999 1998
(Unaudited) *
----------- ------------
ASSETS
Current Assets
Cash $ 1,449 $ 85
Restricted cash - 10,867
Accounts receivable 106,521 92,833
Allowance for doubtful accounts (5,179) (3,935)
Current maturities of other receivables 1,479 1,260
Notes receivable 908 784
Inventories 2,214 2,001
Prepaid expenses 8,024 7,751
Prepaid tires 8,870 7,364
Income tax receivable 3,822 4,940
Deferred income taxes 14,574 11,559
Other 3,682 3,793
--------- ---------
Total Current assets 146,364 139,302
Property, plant and equipment 326,707 327,496
Less - accumulated depreciation and
amortization (108,920) (94,274)
--------- ----------
217,787 233,222
Intangibles, net 143,161 137,532
Insurance proceeds receivable 31,260 45,916
Other Assets 30,016 27,274
-------- ---------
$568,588 $583,246
======== =========
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
JUNE 30, December 31,
1999 1998
(Unaudited) *
---------- ----------
Current Liabilities
Current maturities of indebtedness $ 2,942 $ 3,461
Accounts payable and accrued expenses 56,170 64,750
Independent contractors payable 17,407 8,339
Other current liabilities 6,761 10,362
Income tax payable 1,168 1,546
------- -------
Total Current liabilities 84,448 88,458
Long term debt, less current maturities 299,277 297,662
Capital lease obligations, less current
maturities 162 208
Subordinated debt, 140,000 140,000
Environmental liabilities 67,088 69,956
Other long term obligations 9,665 9,963
Accrued loss and damage claims 3,290 3,290
Minority interest in subsidiaries 4,834 4,825
Manditorily redeemable preferred stock 11,717 15,994
Redeemable common stock (30,239 shares) 1,210 1,210
Stockholders' equity (deficit)
Common stock 20 20
Additional paid-in-capital 105,262 104,807
Retained earnings 32,828 38,495
Stock recapitalization (189,589) (189,589)
Other stockholders' equity (226) (655)
Note receivable (1,398) (1,398)
--------- ---------
Total stockholders' equity (deficit) (53,103) (48,320)
--------- --------
$568,588 $583,246
========= ========
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The accompanying notes are an integral part of these condensed consolidated financial statements.
Six months ended Three months ended
June 30, June 30,
1999 1998 1999 1998
------- -------- -------- --------
Operating Revenues
Transportation $262,474 $137,767 $133,620 $70,589
Other 28,950 10,855 13,291 5,654
-------- -------- -------- --------
291,424 148,622 146,911 76,243
Operating Expenses
Purchased transportation 157,600 91,433 78,766 47,086
Depreciation and amortization 29,521 9,916 13,412 5,020
Compensation - options - 13,433 - 13,433
Other operating expenses 92,269 35,894 46,769 18,112
--------- -------- ------- --------
Operating income 12,034 (2,054) 7,964 (7,408)
Interest expense, net 19,456 3,305 9,686 2,537
Other (income) expense (87) (16) (52) (9)
--------- --------- -------- ---------
Income (loss) before taxes (7,335) (5,343) (1,670) (9,936)
Income taxes (2,689) (2,259) (588) (4,143)
Minority interest 9 - 4 -
--------- --------- -------- --------
Net income (loss) before
extraordinary item (4,655) (3,084) (1,086) (5,793)
Extraordinary item,
net of tax - 623 - 623
--------- --------- --------- ----------
Net income (loss) $(4,655) $(3,707) $(1,086) $(6,416)
Preferred stock dividends
and accretions (802) - (401) -
-------- --------- --------- ----------
Net income (loss) attributable
to common shareholders $(5,457) $(3,707) $ (1,487) $(6,416)
======== ======== ========= ==========
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Six months ended Three month ended
June 30, June 30,
1999 1998 1999 1998
------ ----- ------- -------
Per Share Data:
Basic earnings per common share
Net income (loss) before
extraordinary item $(2.72) $(.74) $(0.74) $(1.51)
Extraordiary item (0.00) (.15) 0.00 ( .16)
------ ------ ------ -------
Net earnings (loss) per share $(2.72) $(.89) $(0.74) $(1.67)
====== ======= ======= =======
Weighted average shares outstanding 2,010 4,144 2,011 3,839
====== ======= ======= =======
Diluted earnings per common per share
Net income (loss) before
extraordinary item N/A N/A N/A N/A
Extraordinary item N/A N/A N/A N/A
------ ------- ------- -------
Net earnings per share N/A N/A N/A N/A
====== ======= ======= =======
Weighted average shares
outstanding N/A N/A N/A N/A
====== ====== ======= =======
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The accompanying notes are an integral part of these condensed consolidated financial statements.
Six months ended June 30,
1999 1998
------- -------
Cash provided by (used for)
Operating activities:
Net income (loss) ($ 4,655) $( 3,707)
Adjustments for non cash charges 27,821 10,058
Changes in assets and liabilities (10,979 (4,996)
-------- --------
Net cash provided by operating
activities 12,187 1,355
Investing activities:
Other investments (1,191) -
Acquisition of subsidiary - -
Capital expenditures (14,457) (13,547)
Proceeds from asset dispositions 4,261 882
Other (615) 453
-------- --------
Net cash provided by (used for)
investing activities (12,002) (12,212)
Financing activities:
Proceeds from issuance of long
term debt 2,585 200,107
Payment of obligations (1,535) (54,498)
Issuance of common stock 456 62,333
Issuance of preferred stock -
Recapitalization expenditures - (189,579)
Other (214) (5,604)
--------- ---------
Net cash provided by (used in)
financing activities 1,292 12,759
-------- ---------
Net Increase (decrease) in cash 1,477 1,902
Effect of exchange rate changes on cash (113) (91)
Cash, beginning of period 85 1,377
--------- ---------
Cash, end of period $ 1,449 $ 3,188
======== =========
Cash payments (refunds received) for:
Interest $ 20,005 $ 3,688
Income taxes $ (567) $ 1,536
|
The accompanying notes are an integral part of these condensed consolidated
financial statements.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
The accompanying unaudited condensed, consolidated financial statements of
Quality Distribution, Inc.(the "Company") have been prepared in accordance
with the instructions to Form 10-Q and do not include all of the information
and notes required by generally accepted accounting principles for complete
financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments and accruals) considered necessary for a fair presentation have
been included.
For further information, refer to the consolidated financial statements and
notes thereto for the year ended December 31, 1998, included in the Company's
Form 10-K dated March 30, 1999.
Operating results for the quarter ended June 30, 1999 are not necessarily
indicative of the results that may be expected for the entire fiscal year.
2. RECAPITALIZATION:
On June 9, 1998, the Company completed the transactions contemplated by an
agreement with Sombrero Acquisition Corporation ("Sombrero"), an affiliate of
Apollo Management L.P.("Apollo"), pursuant to which Sombrero merged with and
into the Company. According to the terms of the merger agreement, the stock-
holders of the Company (other than certain management shareholders) received
$40.00 per share in cash. The total transaction value was approximatley
$250.0 million, including payment for outstanding stock options and payment of
approximately $51.0 million in debt.
The transaction was accounted for as a leveraged recapitalization. The effect
of the recapitalization on stockholders' equity was a charge of approximatley
$189 million.
The recapitalization was funded by a cash equity investment of approximately
$62.3 million from Apollo, members of the Company's existing management and
third party financing sources. $140.0 million of senior subordinated debt was
used to finance the acquisition along with $60.0 million dollars of senior
secured bank debt. Additionally, a $75 million revolving credit facility is
currently available to the Company for working capital and acquisition purposes.
9 FORM 10 - Q
On August 28, 1998, the Company completed its agreement and plan of merger
with Chemical Leaman Corporation ("CLC") and the shareholders of CLC in a
transaction accounted for as a purchase.
The Company completed a tender offer to purchase CLC's 10 3/8 % senior notes
due 2005 at a puchase price equal to:
The sources of funds to consumate the merger included additional loans of
$235.0 million, preferred equity of approximately $20.0 million and common
equity of $12.0 million.
Approximately $144 million of the purchase price has been allocated to
goodwill which is being amortized over a 40 year period.
On February 3, 1999 the Company entered into a settlement agreemeent with the
former shareholders of CLC regarding the remaining consideration owed in the
CLC acquisition. The agreement called for a payment of $3 million of restricted
cash to the former shareholders as a settlement of final payment of amounts
owed under the merger agreement and a cancellation of the 5,000 preferred
shares issued in connection with the acquisition. This agreement resulted in
the recording of additional goodwill of approximatley $3 million.
Giving effect to the CLC acquisition as of January 1, 1998 on a proforma
basis results in the following:revenue for the six months ending June 30,
1998 $319.7 million, net loss for the six months ending June 30, 1998 $(6.2)
million, basic earnings (loss) per share for the six months ended June 30,
1998 $(3.49).
4. COMPREHENSIVE INCOME:
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130 "Reporting Comprehensive Income"
("SFAS 130"). SFAS 130 requires that an enterprise (a) classify items of other
comprehensive income by their nature in the financial statements and (b)
display the accumulated balance of other comprehensive income separately from
retained earnings and additional paid-in-capital in the stockholders' equity
section of the consolidated balance sheets for annuual financial statements.
The Company adopted SFAS 130 in 1998 and accordingly, Comprehensive Income
is as follows:
5. DERIVATIVES
The Company utilizes derivative financial instruments to reduce its exposure
to market risks from changes in interest rates and foreign exchange rates.
The instruments primarily used to mitigate these risks are interest rate
swaps and foreign exchange contracts. All derivative instruments held by the
Company are designed as hedges and accordingly, the gains and losses from
changes in derivative fair values are deferred. Gains and losses upon settle-
ment are recognized in the statement of operations or recorded as part of the
underlying asset or liability as appropriate. The Company is exposed to credit
related losses in the event of nonperformance by counterparties to these
financial instruments; however, counterparties to these agreements are major
financial institutions; and the risk of loss due to nonperformance is considered
by management to be minimal. The Company does not hold or issue interest rate
swaps or foreign exchange contracts for trading purposes.
The Company currently has appproximately $340 million of variable interest
debt. The Company has entered into interest rate swap agreements designed as
a partial hedge of the Company's portfolio of variable rate debt. The purpose
of these swaps is to fix interest rates on variable rate debt and reduce certain
exposures to interest rate fluctuations. At June 30, 1999 the Company had
interest rate swaps with a notional amount of $100 million. The notional
amounts do not represent a measure of exposure of the Company. The Company will
pay counterparties interest at a fixed rate ranging from 5.41% to 5.48%, and
the counter parties will pay the Company interest at at a variable rate equal
to LIBOR. The LIBOR rate applicable to these agreements at June 30, 1999 was
Item 1 - Financial Statements
September 2, 2001. A 10% fluctuation in interest rates would have a $1.9
million impact, net of interest rate swap agreements, on future earnings.
The Company has entered into short-term foreign currency agreements to exchange
US dollars (US $1,550) for Canadian dollars (CN $2,282). The purpose of these
agreements are to hedge against fluctuations in foreign currency exchange
rates. The Company is required to make US dollar payments at fixed exchange
rates ranging from 1.43738 to 1.4726, and as such, the market risk based upon a
10% fluctuation in the exchange rate is immaterial.
6. GUARANTOR SUBSIDIARIES:
The 10% Series B Senior Subordinated Notes issued in June 1998 and due 2006
are unconditionally guaranteed on a senior unsecured basis pursuant to
guarantees by all the Company's direct and indirect domestic subsidiaries
("The Guarantors"). In 1996, the Company acquired Levy Transport, Ltd, a
Canadian corporation, which is a non-guarantor subsidiary.
The Company conducts all of its business through and derives virtually all
its income from its subsidiaries. Therefore, the Company's ability to make
required principal and interest payments with respect to all of the Company's
debt depends on the earnings of subsidiaries and its ability to receive funds
from its subsidiaries. The subsidiary guarantors are wholly owned subsidiaries
of the Company and have fully and unconditionally guaranteed the Notes on a
joint and several basis.
The Company has not presented seperate financial statements and other
disclosures concerning subsidiary guarantors because management has determined
such information is not material to the holders of the Notes.
The following condensed consolidating financial information presents:
1. Balance Sheets as of June 30, 1999 and December 31, 1998.
2. Statements of Operations for the three months ended June 30, 1999 and 1998.
3. Statements of Operations for the six months ended June 30,1999 and 1998.
4. Statements of Cash Flows for the six months ended June 30,1999 and 1998.
5. The parent company and combined guarantor subsidiaries.
6. Elimination entries necessary to consolidate the parent company and all
its subsidiaries.
20 FORM 10-Q
21 FORM 10-Q
The Company's comparative operating results for the second quarter of 1999
were materially affected by the recapitalization accounting resulting from the
June 30, 1998 transaction with an affiliate of Apollo Management L.P. and the
acquisition of Chemical Leaman on August 28, 1998.
The Company's operating results are affected by shipments for the bulk
chemical industry. Shipments of chemical products are in turn affected by
many other industries, including consumer and industrial products, automotive,
paint and coatings, and paper, and tend to vary with changing economic
conditions. The Company also participates in the shipment of bulk food
products through its food-grade division. The volumes of food products and
certain other consumer products tend to be subject to fewer fluctuations due
to swings in economic activity.
For the quarter ended June 30, 1999, revenues totaled $146.9 million, a 92.7%
increase over revenues of $76.2 million for the same period in 1998. The
Company attributes its increased revenue to the acquisition of CLC.
For the quarter ended June 30, 1999, operating income totaled $ 8.0 million,
an increase of $15.4 milion compared to a loss of $7.4 million for the
same period in 1998. This increase is primarily due to the $ 13.4 million
charge to compensation expense in 1998 attributable to the Apollo acquisition.
Current year operating income was also negatively impacted by the amortization
of goodwill in the amount of $1.2 million recognized with the acquisition of
Chemical Leaman and a charge of $2.9 million relating to the reduction in the
usefull life of acquired software used in the trucking operation.
The operating ratio (operating expense/operating revenue) improved primarily
due to the aforementioned prior year charge relating to the acquisition of the
Company by Apollo.
Net interest expense increased to $9.7 million in the quarter ended
June 30, 1999, from $2.5 million in the quarter ended June 30, 1998. This
increase is the result of the increased debt arising from the leveraged
recapitalization and the acquisition of Chemical Leaman.
The pretax loss for the quarter ended June 30, 1999 totaled $1.7 million
compared to a loss of $9.9 million for the same period in 1998.
Pretax income increased primarily due to the increase in operating income
less the increase in interest expense both discussed above.
For the quarter ended June 30,1999, the Company's net loss, was $1.1 million
compared with a loss $6.4 million for the same period last year. This was
the result of increased pretax income previously discussed above.
Basic weighted average shares outstanding decreased from 3,839,000 in the
second quarter of 1998 to 2,011,000 in the second quarter of 1999 due to the
recapitalization. As of June 30, 1999, a total of 2,011,000 shares were
outstanding.
The Company's comparative operating results for the six months ended June 30,
1999 were materially affected by the recapitalization accounting resulting
from the June 30, 1998 transaction with an affiliate of Apollo Management L.P.
and the acquisition of Chemical Leaman on August 28, 1998.
For the six months ended June 30, 1999, revenues totaled $291.4 million, a
96.1% increase over revenues of $148.6 million for the same period in 1998.
The Company attributes its increased revenue to the acquisition of CLC.
For the six months ended ended June 30, 1999, operating income totaled $12.0
million, an increase of $14.1 million compared to a loss of $2.0 million for
the same period in 1998. This increase is primarily due to the $ 13.4 million
charge to compensation expense in 1998 attributable to the Apollo acquisition.
Current year operating income was also negatively impacted by the amortization
of goodwill in the amount of $2.3 million recognized with the acquisition of
Chemical Leaman and a charge of $8.8 million relating to the reduction in the
usefull life of acquired software used in the trucking operation.
The operating ratio (operating expense/operating revenue) improved primarily
due to the aforementioned prior year charge relating to the acquisition of
the Company by Apollo.
The pretax loss for the six months ended June 30, 1999 totaled $7.3 million
compared to a loss of $5.3 million for the same period in 1998.
Pretax income decreased primarily due to the increase in interest expense
discussed above.
For the six months ended June 30,1999, the Company's net loss, was $4.7
million compared with a loss$ 3.7 million for the same period last year.
This was the result of decreased pretax income previously discussed above.
Basic weighted average shares outstanding year to date decreased from
4,144,000 in 1998 to 2,010,000 in 1999 due to the recapitalization.
Liquidity and Capital Resources
The Company's primary sources of liquidity are funds provided by operations
and borrowings under various credit arrangements with financial institutions.
Net cash provided by operating activities totaled $12.2 million for the six
months ended June 30,1999, versus $1.4 million for the same period in 1998.
This increase is due to the settlement with the former CLC shareholders
which occured in 1998.
The cash provided by financing activities totaled $1.3 million during the six
month period ended June 30, 1999, compared to $12.8 million provided in the
the comparable period in 1998. This difference is due to the recapitalization
which occured in the second quarter of last year.
Cash used for investing activities totaled $12.0 million for the six
month period ended June 30, 1999, compared to a $12.2 million used for the
comparable 1998 period.
Capital was used primarily to acquire additional revenue equipment to expand
the Company's operations.
As a result of the leveraged recapitalization transaction and the Chemical
Leaman acquisition, the Company has significantly increased its outstanding
long term debt.
The Company obtained a $285,000,000 credit facility with a group of banks
maturing at various times from June of 2004 to 2006. Additionally, the
Company has a revolving credit facility available in the amount of $75.0
million until June 9, 2004.
As of June 30,1999, the Company has available $ 50.7 million under this
revolving credit facility. The Company also has $100.00 million in 10% senior
subordinated notes due in 2006 and $40.0 million in floating interest rate
subordinated term securities also due in 2006.
The Company's management believes that borrowings under these loan agreements,
together with available cash and internally generated funds, will be
sufficient to fund QDI's continued growth and meet its working capital
requirements for the foreseeable future.
Some of QDI's older computer programs and systems were written using two
digits rather than four to define the applicable year. As a result, those
computer programs have time sensitive software that recognizes a date using
"00" as the year 1900 rather than 2000. This could cause a system failure
or other miscalculations causing disruptions of operations, including
among other things, a temporary inability to process transactions, send
invoices or engage in similar normal business activities.
QDI has developed a plan to ensure that its systems are compliant with the
requirements to process transactions in the year 2000. Most of QDI's combined
systems implementation effort is now directed toward the migration of the
CLC billing, settlement and financial reporting systems from mainframe based
systems which are not Year 2000 compliant. The target completion date for
changeover of the critical systems is September 30,1999. The estimated cost
of QDI's completed and remaining replacement and modification for the year
2000 issue is not expected to be material to QDI's earnings or financial
position. Due to cost considerations and QDI's belief that its critical
systems will be compliant by the end of the third quarter of 1999, QDI has
determined not to develop or maintain a contingency plan.
QDI has also done an assessment of its non-IT systems. QDI has determined that
it currently owns approximatley 300 Qualcom units which are located in its
trucks and deal with the communication to the trucks, which have embedded
chips that are not Year 2000 compliant. These units are not an integral
part of the operation of QDI's business. These units have been earmarked
to be upgraded over the next six months and QDI does not expect the costs of
such upgrades to be material. In addition to assessing its own Year 2000
compliance, QDI has had discussions with many of its major vendors and
suppliers reguarding their Year 2000 compliance. QDI has received letters of
compliance from many of its material partners and is in the process of
obtaining such letters from others.
There can be no assurance that QDI's timetable will be met, that the
programming changes required to accommodate current billing and driver
settlement requirements will be completed in this time frame, or that such
changes will not negatively impact QDI's ability to meet its customers
or its drivers requirements or that QDI's failure to maintain a contingency
plan will not have a material adverse effect on the Company.
FORWARD LOOKING STATEMENTS
Some of the statements contained in this report discuss future expectations,
contain projections of results of operations or financial condition or state
other "forward-looking" information. Those statements are subject to known and
unknown risks, uncertainties and other factors that could cause the actual
results to differ materially from those contemplated by the statements. The
forward-looking information is based on various factors and was derived using
numerous assumptions. Important factors that could cause our actual results
to be materially different from the forward-looking statements include general
economic conditions, cost and availability of diesel fuel, adverse weather
conditions and competitive rate fluctuations. Future financial and operating
results of QDI may fluctuate as a result of these and other risk factors as
detailed from time to time in Company filings with the Securities and
Exchange Commission.
ITEM 1 - Financial Statements
QUALITY DISTRIBUTION, INC AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)-(continued)
3. CHEMICAL LEAMAN ACQUISITION:
(i) the present value on the payment date of $1,051.88 per note (the amount
payable on June 15, 2001, which is the first date on which the notes are
redeemable)("the Earliest Redemption Date")) and all future interest payments
payable up to the Earliest Redemption Date, determined on the basis of a
yield to the Earliest Redemption Date equal to the sum of (x) the yield on
the 5 5/8 percent U.S. Treasury Notes due May 15, 2001, based on the bid
price for such security as of 2:00 p.m., New York City time, on August 19,
1998, the third business day immediately preceeding the scheduled expiration
date of the tender offer, plus (y) 75 basis points less (ii) a consent payment
of $20.00 per $1,000.00 principal amount on notes for which a valid consent to
certain matters relating to the notes is received in connection with the
tender offer.
Six Months Ended Three Months Ended
June 30, June 30,
1999 1998 1999 1998
------- -------- ------ -------
Net income (loss) $(4,655) $(3,707) (1,086) $(6,416)
Other comprehensive income, net of tax:
Foreign currency translation adjustments 429 (242) 194 (261)
-------- -------- ------- ---------
Comprehensive income (loss) $(4,226) $ (3,949) $(892) $(6,677)
======== ========= ======= ========
5.06625%. These agreements mature and renew every three months and expire on
Guarantor Non-Guaran- Consol-
Parent Subs tor Subs Elim's idated
--------- -------- -------- ------- --------
ASSETS
Current Assets
Cash and cash equivalents $ - $ 421 $1,028 $ - $ 1,449
Accounts receivable, net - 93,919 7,423 - 101,342
Inventories - 1,997 217 - 2,214
Prepaid expenses and
other current assets - 40,681 678 - 41,359
-------- -------- -------- -------- ---------
Total Current assets - 137,018 9,346 - 146,364
Property and equipment,net - 196,722 21,065 - 217,787
Intangibles & goodwill,net - 142,078 1,083 - 143,161
Insurance proceeds receivable - 31,260 - - 31,260
Other assets 100,000 29,850 166 (100,000) 30,016
Investment in Subsidiaries 292,738 - - (292,738) -
--------- -------- -------- -------- -------
$392,738 $536,928 $31,660 $(392,738) $568,588
======== ========= ======== ========= =========
Guarantor Non-Guaran- Consol-
Parent Subs tor Subs Elim's idated
--------- ---------- --------- ------- -------
Current Liabilities
Current maturities of
indebtedness $ 2,942 $ - $ - _ $ 2,942
Accounts payable and
accrued expenses - 53,007 3,163 - 56,170
Independent contractors
payable - 17,247 160 - 17,407
Other current liabilities - 5,267 1,494 - 6,761
Income tax payable - 770 398 - 1,168
--------- -------- -------- ------- -------
Total Current liabilities 2,942 76,291 5,215 - 84,448
Bank debt, less
current maturities 289,972 - 9,305 - 299,277
Capital lease obligations,
less current maturities - 162 - - 162
Subordinated debt, less
current maturities 140,000 100,000 - (100,000) 140,000
Environmental liabilities - 67,088 - - 67,088
Other long term liabilities - 9,665 - - 9,665
Deferred income taxes - (2,008) 2,008 - -
Accrued loss and damage claims - 3,290 - - 3,290
Commitments & contingent liab. - - - - -
Minority interest in subs - 4,834 - - 4,834
Mandatorily redeemable
preferred stock 11,717 - - - 11,717
Redeemable common stock 1,210 - - - 1,210
Stockholders' equity
Common stock and
Additional paid-in-capital 105,282 225,592 15,082 (240,674) 105,282
Retained earnings 32,828 52,014 415 (52,429) 32,828
Stock recapitalization (189,589) - (55) 55 (189,589)
Other stockholders' equity (226) - (310) 310 (226)
Note receivable (1,398) - - - (1,398)
-------- -------- --------- -------- --------
Total stockholders'
equity or (deficit) (53,103) 277,606 15,132 (292,738) (53,103)
-------- --------- -------- -------- --------
$392,738 $536,928 $31,660 ($392,738) $568,588
======== ========= ======== ========= ========
Guarantor Non-Guaran- Consol-
Parent Subs tor Subs Elim's idated
--------- -------- --------- ------- ---------
ASSETS
Current Assets
Cash and cash equivalents $ - $ (721) $ 806 $ - $ 85
Accounts receivable, net - 85,867 3,031 - 88,898
Inventories - 1,740 261 - 2,001
Prepaid expenses and
other current assets - 46,627 1,691 - 48,318
-------- -------- -------- -------- ---------
Total Current assets - 133,513 5,789 - 139,302
Property and equipment,net - 211,905 21,317 - 233,222
Intangibles & goodwill,net - 136,276 1,076 - 137,352
Insurance proceeds receivable - 45,916 - - 45,916
Other assets 100,000 27,454 - (100,000) 27,454
Investment in Subsidiaries 301,391 - - (301,391) -
--------- -------- -------- -------- -------
$401,391 $555,064 $28,182 $(401,391) $583,246
======== ========= ======= ========= ========
Guarantor Non-Guaran- Consol-
Parent Subs tor Subs Elim's idated
--------- ---------- --------- ------- -------
Current Liabilities
Current maturities of
indebtedness $ 3,153 $ 208 $ 100 _ $ 3,461
Accounts payable and
accrued expenses - 60,532 4,218 - 64,750
Independent contractors
payable - 8,266 73 - 8,339
Other current liabilities - 10,362 - - 10,362
Income tax payable - 1,331 215 - 1,546
--------- -------- -------- ------- -------
Total Current liabilities 3,153 80,699 4,606 - 88,458
Bank debt, less
current maturities 289,146 100,000 8,516 (100,000) 297,662
Capital lease obligations,
less current maturities 208 - - - 208
Subordinated debt, less
current maturities 140,000 - - - 140,000
Environmental liabilities - 69,956 642 - 69,956
Other long term liabilities - 9,321 - - 9,963
Deferred income taxes - - - -
Accrued loss and damage claims - 3,290 - - 3,290
Commitments & contingent liab. - - - - -
Minority interest in subs - 4,825 - - 4,825
Mandatorily redeemable
preferred stock 15,994 - - - 15,994
Redeemable common stock 1,210 - - - 1,210
Stockholders' equity
Common stock and
Additional paid-in-capital 104,827 241,381 15,082 (256,463) 104,827
Retained earnings 38,495 45,592 69 (45,661) 38,495
Stock recapitalization (189,589) (54) 54 (189,589)
Other stockholders' equity (655) - (679) 679 (655)
Note receivable (1,398) - - - (1,398)
-------- -------- --------- -------- -------
Total stockholders'
equity or (deficit) (48,320) 286,973 14,418 (301,391) (48,320)
------- ------- -------- -------- -------
$401,391 $555,064 $28,182 ($401,391) $583,246
======= ======== ======= ========= ========
Guarantor Non-Guaran- Consol-
Parent Subs tor Subs Elim's idated
------- --------- ---------- -------- --------
Operating Revenues
Transportation $ - $126,646 $ 6,974 - $133,620
Other - 13,625 (334) - 13,291
-------- -------- -------- -------- -------
- 140,271 6,640 - 146,911
Operating Expenses
Purchased transportation - 78,179 587 - 78,766
Depreciation and amortization - 12,482 930 - 13,412
Compensation - options - - - - -
Other operating expenses - 42,312 4,457 - 46,769
--------- -------- -------- -------- -------
Operating income (loss) - 7,298 666 - 7,964
Interest expense, net 9,522 - 164 - 9,686
Other (income) expense - (52) - - (52)
Equity in earnings (loss)
of Subsidiaries 4,695 - - (4,695) -
--------- --------- -------- --------- ------
Income (loss) before taxes (4,827) 7,350 502 (4,695 (1,670)
Income taxes (3,740) 3,013 139 - (588)
Minority interest 4 4
--------- --------- -------- -------- ------
Net income (loss) before
extraordinary item (1,086) 4,333 363 (4,695) (1,086)
Extraordinary item,
net of tax - - - - -
--------- --------- ------- -------- -------
Net income (loss) ($1,086) $4,333 $ 363 ($4,695) ($1,086)
========= ========= ======= ======== =======
Guarantor Non-Guaran- Consol-
Parent Subs tor Subs Elim's idated
------- --------- ---------- -------- --------
Operating Revenues
Transportation $ - $ 64,723 $ 5,866 - $ 70,589
Other - 5,160 494 - 5,654
-------- -------- --------- -------- --------
- 69,883 6,360 - 76,243
Operating Expenses
Purchased transportation - 46,152 934 - 47,086
Depreciation and amortization - 4,108 912 - 5,020
Compensation - options - 13,433 - - 13,433
Other operating expenses - 14,009 4,103 - 18,112
--------- -------- --------- -------- --------
Operating income (loss) - (7,819) 411 - (7,408)
Interest expense, net 2,000 340 197 - 2,537
Other expense - (12) 3 - (9)
Equity in earnings (loss)
of Subsidiaries (5,298) - - 5,298 -
--------- --------- --------- --------- --------
Income (loss) before taxes (7,298) (8,147) 211 5,298 (9,936)
Income taxes (882) (3,340) 79 - (4,143)
--------- --------- -------- -------- --------
Net income (loss) before
extraordinary item (6,416) (4,807) 132 5,298 (5,793)
Extraordinary item,
net of tax - 552 71 - 623
--------- --------- -------- ------- --------
Net income (loss) (6,416) (5,359) 61 5,298 (6,416)
--------- --------- ------- ------- --------
Preferred stock dividends - - - - -
Net income (loss)
attributable to common
shareholders $(6,416) $ (5,359) $ 61 5,298 $ (6,416)
======== ======== ======= ======= =========
Guarantor Non-Guaran- Consol-
Parent Subs tor Subs Elim's idated
------- --------- ---------- -------- --------
Operating Revenues
Transportation $ - $249,331 $ 13,143 - $262,474
Other - 28,948 2 - 28,950
-------- -------- -------- -------- -------
- 278,279 13,145 - 291,424
Operating Expenses
Purchased transportation - 156,341 1,259 - 157,600
Depreciation and amortization - 27,685 1,836 - 29,521
Compensation - options - - - - -
Other operating expenses - 83,440 8,829 - 92,269
--------- -------- -------- -------- -------
Operating income (loss) - 10,813 1,221 - 12,034
Interest expense, net 19,142 - 314 - 19,456
Other (income) expense - (87) - - (87)
Equity in earnings (loss)
of Subsidiaries 7,031 - - (7,031) -
--------- --------- -------- --------- ------
Income (loss) before taxes(12,111) 10,900 907 (7,031) (7,335)
Income taxes (7,456) 4,469 298 - (2,689)
Minority interest 9 9
--------- --------- -------- -------- ------
Net income (loss) before
extraordinary item (4,655) 6,422 609 (7,031) (4,655)
Extraordinary item,
net of tax - - - - -
--------- --------- ------- -------- -------
Net income (loss) ($4,655) $6,422 $ 609 ($7,031) ($4,655)
========= ========= ======= ======== =======
Guarantor Non-Guaran- Consol-
Parent Subs tor Subs Elim's idated
------- --------- ---------- -------- --------
Operating Revenues
Transportation $ - $126,120 $ 11,647 - $ 137,767
Other - 9,932 923 - 10,855
-------- -------- --------- -------- --------
- 136,052 12,570 - 148,622
Operating Expenses
Purchased transportation - 89,499 1,934 - 91,433
Depreciation and amortization - 8,153 1,763 - 9,916
Compensation - options - 13,433 - - 13,433
Other operating expenses - 27,911 7,983 - 35,894
--------- -------- --------- -------- --------
Operating income (loss) - (2,944) 890 - (2,054)
Interest expense, net 2,000 923 382 - 3,305
Other expense - (16) - - (16)
Equity in earnings (loss)
of Subsidiaries (2,589) - - 2,589 -
--------- --------- --------- --------- --------
Income (loss) before taxes (4,589) (3,851) 508 2,589 (5,343)
Income taxes (882) (1,579) 202 - (2,259)
--------- --------- -------- -------- --------
Net income (loss) before
extraordinary item (3,707) (2,272) 306 2,589 (3,084)
Extraordinary item,
net of tax - 552 71 - 623
--------- --------- -------- ------- --------
Net income (loss) (3,707) (2,824) 235 2,589 (3,707)
--------- --------- ------- ------- --------
Preferred stock dividends - - - - -
Net income (loss)
attributable to common
shareholders $(3,707) $ (2,824) $ 235 2,589 $ (3,707)
======== ======== ======= ======= =========
Guarantor Non-Guaran- Consol-
Parent Subs tor Subs Elim's idated
------- --------- ---------- ------- ----------
Cash provided by (used for)
Operating activities:
Net income (loss) $(4,655) $ 6,422 $ 608 ($7,030) $ (4,655)
Adjustments for non
cash charges 4,655 21,173 1,993 27,821
Changes in assets/liabilities - (16,051) (1,958) 7,030 (10,979)
-------- --------- --------- -------- --------
Net cash provided by
operating activities - 11,544 643 - 12,187
Investing activities:
Acquisition of subsidiary - - - - -
Capital expenditures - (13,403) (1,054) - (14,457)
Proceeds from asset
dispositions - 3,991 270 - 4,261
Other - (1,865) 59 - (1,806)
-------- --------- --------- -------- -------
Net cash provided by (used
for)investing activities - (11,277) (725) - (12,002)
Financing activities:
Proceeds from issuance of
long term debt 1,838 - 747 - 2,585
Payment of obligations - (1,476) (59) - (1,535)
Issuance of common stock 456 - - - 456
Issuance of preferred stock - - - -
Recapitalization expenditures
Other (214) - - (214)
Net change in intercompany
balances (2,294) 2,294
-------- ---------- ---------- ------- --------
Net cash provided by
financing activities - 604 688 - 1,292
-------- ---------- ---------- ------- -------
Net increase (decrease) in
cash - 871 606 - 1,477
Effect of exchange rate
changes on cash - 271 (384) - (113)
Cash, beginning of period - (721) 806 - 85
--------- --------- --------- ------- -------
Cash, end of period - $ 421 $ 1,028 - $ 1,449
========= ========= ========== ======= =======
Guarantor Non-Guaran- Consol-
Parent Subs tor Subs Elim's idated
-------- --------- ---------- ------- ----------
Cash provided by (used for)
Operating activities:
Net income (loss) $(3,707) $ (3,786) $ 79 $ 3,707 $ (3,707)
Adjustments for non
cash charges 3,707 8,371 1,687 (3,707) 10.058
Changes in assets/liabilities - (4,169) (827) - (4,996)
-------- --------- -------- -------- --------
Net cash provided by
operating activities - 416 939 - 1,355
Investing activities:
Acquisition of subsidiary - - - - -
Capital expenditures - (7,276) (6,271) - (13,547)
Proceeds from asset
dispositions - 616 266 - 882
Other - 355 98 - 453
-------- --------- ----------- ------- -------
Net cash used for investing
activities - (6,305) (5,907) - (12,212)
Financing activities:
Proceeds from issuance of
long term debt - 190,000 10,107 - 200,107
Payment of obligations - (43,414) (11,084) - (54,498)
Issuance of common stock 56,842 - 5,491 - 62,333
Issuance of preferred stock - - - - -
Recapitalization expenditures (189,579) (189,589)
Other (5,604) - - (5,604)
Net change in intercompany
balances 132,737 (132,737) - - -
--------- ---------- ---------- ------- --------
Net cash provided by
financing activities - 8,245 4,514 1,001 12,759
--------- ---------- ---------- ------- -------
Net increase (decrease) in
cash - 2,356 (454) - 1,902
Effect of exchange rate
changes on cash - (133) 42 - (91)
Cash, beginning of period - 703 674 - 1,377
--------- --------- ---------- ------- -------
Cash, end of period - $2,926 $ 262 - $3,188
========= ========= ========== ======= =======
Net interest expense increased to $19.5 million for the six monthe ended
June 30, 1999, from $3.3 million for the six monthe ended June 30, 1998. This
increase is the result of the increased debt arising from the leveraged
recapitalization and the acquisition of Chemical Leaman.
Reference is made to Item 3 on page 11 of the Company's Form 10-K for the
year ended December 31, 1998. There have been no material changes in the
Company's legal proceedings since this filing.
(b) Reports on Form 8-K: None
None
August 13, 1999 /S/ CHARLES J. O'BRIEN, JR.
-------------------------------------------
CHARLES J. O'BRIEN, JR., (CEO, PRESIDENT)
(DULY AUTHORIZED OFFICER)
August 13, 1999 /S/ RICHARD J. BRANDEWIE
-------------------------------------------
RICHARD J. BRANDEWIE, (TREASURER)
(PRINCIPAL FINANCIAL OFFICER)
|
ARTICLE 5
MULTIPLIER: 1000
PERIOD TYPE
3 MOS
FISCAL YEAR END
DEC 31 1999
PERIOD START
APR 01 1999
PERIOD END
JUN 30 1999
CASH
1449
SECURITIES
0
RECEIVABLES
106521
ALLOWANCES
5179
INVENTORY
2214
CURRENT ASSETS
146364
PP&E
326707
DEPRECIATION
108920
TOTAL ASSETS
568588
CURRENT LIABILITIES
84448
BONDS
0
PREFERRED MANDATORY
0
PREFERRED
11717
COMMON
20
OTHER SE
(1398)
TOTAL LIABILITY AND EQUITY
568588
SALES
291424
TOTAL REVENUES
291424
CGS
0
TOTAL COSTS
279390
OTHER EXPENSES
(87)
LOSS PROVISION
0
INTEREST EXPENSE
19456
INCOME PRETAX
(7335)
INCOME TAX
(2689)
INCOME CONTINUING
(4655)
DISCONTINUED
0
EXTRAORDINARY
0
CHANGES
0
NET INCOME
(4655)
EPS BASIC
(2.72)
EPS DILUTED
0