SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended JUNE 30, 1998 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from __________ to
__________
Commission File Number: 0-28056
------------------
COACH USA, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 76-0496471
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
ONE RIVERWAY, SUITE 500
HOUSTON, TEXAS 77056
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 888-0104
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 of the Registrant, par value $.01 per
share, outstanding at August 12, 1998 was 25,343,124.
1
<PAGE>
COACH USA, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1998
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item I - Financial Statements
COACH USA, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets.......................... 3
Condensed Consolidated Statements of Income.................... 4
Condensed Consolidated Statements of Stockholders' Equity...... 5
Condensed Consolidated Statements of Cash Flows................ 6
Notes to Condensed Consolidated Financial Statements........... 7
Item II - Management's Discussion and Analysis of Financial Condition
and Results of Operations.....................................17
PART II - OTHER INFORMATION
Item 2 - Changes in Securities.......................................20
(c)Recent Issuance of Unregistered Securities.
Item 4 - Submission of Matters to a Vote of Security Holders ........20
(a)Election of Directors.
(b)Amended & Restated Long-Term Incentive Plan.
(c)Appointment of Arthur Andersen LLP as Independent Auditors.
Item 6 - Exhibits and Reports on Form 8-K............................21
(a)Exhibits.
10 Material Contracts.
27 Financial Data Schedule.
(b)Reports on Form 8-K.
Signature...............................................................22
2
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30,
1997 1998
----------- ----------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents ................................... $ 3,648 $ 7,217
Accounts receivable, net of allowance of $3,663 and $4,153 .. 43,346 59,827
Inventories ................................................. 22,490 29,049
Notes receivable, current portion ........................... 4,138 4,602
Prepaid expenses and other current assets ................... 24,219 30,037
--------- ---------
Total current assets .................................... 97,841 130,732
PROPERTY AND EQUIPMENT, net ...................................... 395,800 523,130
NOTES RECEIVABLE, net of allowance of $500 and $500 .............. 8,906 10,081
GOODWILL, net .................................................... 145,576 223,098
OTHER ASSETS, net ................................................ 17,747 19,343
--------- ---------
Total assets ............................................ $ 665,870 $ 906,384
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term obligations ................. $ 12,012 $ 10,618
Current maturities of convertible subordinated notes ........ -- 4,165
Accounts payable and accrued liabilities .................... 91,140 122,766
--------- ---------
Total current liabilities ............................... 103,152 137,549
LONG-TERM OBLIGATIONS, net of current maturities ................. 158,752 197,924
SENIOR SUBORDINATED NOTES ........................................ 150,000 150,000
CONVERTIBLE SUBORDINATED NOTES, net of current maturities ........ 52,300 58,505
DEFERRED INCOME TAXES ............................................ 41,111 51,860
--------- ---------
Total liabilities ....................................... 505,315 595,838
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock $.01 par, 500,000 shares authorized,
1 share issued and outstanding ........................... -- --
Common stock $.01 par, 100,000,000 shares
authorized, 21,817,918 and
25,259,147 shares issued and
outstanding, respectively ................................ 218 253
Additional paid-in capital .................................. 121,534 254,154
Cumulative translation adjustment ........................... (479) (581)
Retained earnings ........................................... 39,282 56,720
--------- ---------
Total stockholders' equity .............................. 160,555 310,546
--------- ---------
Total liabilities and stockholders' equity .............. $ 665,870 $ 906,384
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA )
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- ----------------------
1997 1998 1997 1998
-------- -------- ------ ------
<S> <C> <C> <C> <C>
REVENUES ................................. $ 138,712 $ 196,653 $ 235,244 $ 346,636
OPERATING EXPENSES ....................... 100,059 139,931 177,018 257,911
--------- --------- --------- ---------
Gross profit ....................... 38,653 56,722 58,226 88,725
GENERAL AND ADMINISTRATIVE EXPENSES ...... 16,151 21,382 27,865 40,196
AMORTIZATION EXPENSES .................... 817 1,633 1,343 3,072
ACQUISITION RELATED COSTS ................ 255 -- 394 --
--------- --------- --------- ---------
Operating income ................... 21,430 33,707 28,624 45,457
INTEREST EXPENSE ......................... 4,484 8,425 8,683 16,170
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEMS ................... 16,946 25,282 19,941 29,287
PROVISION FOR INCOME TAXES ............... 7,028 9,860 8,346 11,422
--------- --------- --------- ---------
INCOME BEFORE EXTRAORDINARY ITEMS ........ 9,918 15,422 11,595 17,865
EXTRAORDINARY ITEMS, net of income taxes . (280) (339) (399) (427)
--------- --------- --------- ---------
NET INCOME ............................... $ 9,638 $ 15,083 $ 11,196 $ 17,438
========= ========= ========= =========
BASIC EARNINGS PER COMMON SHARE:
INCOME BEFORE EXTRAORDINARY ITEMS ..... $ .47 $ .65 $ .55 $ .78
EXTRAORDINARY ITEMS ................... (.02) (.01) (.02) (.02)
--------- --------- --------- ---------
NET INCOME ............................ $ .45 $ .64 $ .53 $ .76
========= ========= ========= =========
DILUTED EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE:
INCOME BEFORE EXTRAORDINARY ITEMS ..... $ .45 $ .61 $ .53 $ .74
EXTRAORDINARY ITEMS ................... (.01) (.01) (.01) (.01)
--------- --------- --------- ---------
NET INCOME ............................ $ .44 $ .60 $ .52 $ .73
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL CUMULATIVE TOTAL
------------------ PAID-IN TRANSLATION RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL ADJUSTMENT EARNINGS EQUITY
------ ---- -------- ----- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1996 .................... 20,901 $209 $105,576 $(209) $ 8,694 $ 114,270
Issuance of Common Stock:
Acquisition of Purchased Companies ......... 596 6 12,385 -- -- 12,391
Exercise of stock options .................. 119 1 2,509 -- -- 2,510
Equity of acquired companies treated as
Immaterial Poolings-of-Interest ............ 197 2 378 -- 396 776
S Corporation dividends paid by
certain Pooled Companies ................... -- -- -- -- (1,216) (1,216)
Other ........................................ 5 -- 686 (270) -- 416
Net income ................................... -- -- -- -- 31,408 31,408
------ ---- -------- ----- -------- ---------
BALANCE AT DECEMBER 31, 1997 .................... 21,818 218 121,534 (479) 39,282 160,555
Issuance of Common Stock:
Acquisition of Purchased Companies ......... 247 2 5,258 -- -- 5,260
Exercise of stock options and warrants ..... 211 3 5,781 -- -- 5,784
Conversion of convertible subordinated notes 683 7 23,158 -- -- 23,165
Proceeds from sale of Common Stock ......... 2,300 23 98,423 -- -- 98,446
Other ........................................ -- -- -- (102) -- (102)
Net income ................................... -- -- -- -- 17,438 17,438
------ ---- -------- ----- -------- ---------
BALANCE AT JUNE 30, 1998 (unaudited) ............ 25,259 $253 $254,154 $(581) $ 56,720 $ 310,546
====== ==== ======== ===== ======== =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
---------------------
1997 1998
------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .......................................... $ 11,196 $ 17,438
Adjustments to reconcile net income to net cash
provided by operating activities --
Depreciation and amortization ................. 15,272 23,695
Gain on sale of assets ........................ (570) (286)
Deferred income tax provision ................. 4,671 6,858
Changes in operating assets and liabilities,
net of effect of Purchased Companies --
Accounts receivable, net ................... (2,920) (13,563)
Inventories ................................ (1,792) (7,729)
Prepaid expenses and other current assets .. (4,991) (3,164)
Accounts payable and accrued liabilities ... 13,935 10,681
Other ...................................... (5,537) (717)
--------- ---------
Net cash provided by operating activities 29,264 33,213
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment ................. (69,866) (79,908)
Proceeds from sales of property and equipment ....... 7,319 3,491
Cash consideration paid for Purchased Companies,
net of cash acquire ................................ (36,656) (55,050)
Increase in notes receivable ........................ (2,538) (1,692)
--------- ---------
Net cash used in investing activities ... (101,741) (133,159)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term obligations ......... (89,595) (98,423)
Proceeds from issuance of long-term obligations ..... 161,358 97,810
Proceeds from issuance of Common Stock .............. 420 104,230
Other ............................................... 57 --
--------- ---------
Net cash provided by financing activities 72,240 103,617
EFFECT OF EXCHANGE RATE CHANGES ........................ (201) (102)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ... (438) 3,569
CASH AND CASH EQUIVALENTS, beginning of period ......... 4,723 3,648
--------- ---------
CASH AND CASH EQUIVALENTS, end of period ............... $ 4,285 $ 7,217
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest ........................... $ 9,029 $ 15,555
Cash paid for income taxes ....................... 829 7,859
Assets acquired under capital leases ............. 6,921 --
Convertible subordinated notes issued
for Purchased Companies ......................... 22,080 33,535
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS AND ORGANIZATION:
In September 1995, Coach USA, Inc. ("Coach USA" or the "Company") was
founded to create a national company providing motorcoach transportation
services, including charter and tour services, and related passenger ground
transportation services.
In May 1996, Coach USA acquired, simultaneously with the closing of its
initial public offering, six established businesses. Through June 30, 1998, the
Company has acquired additional businesses. Of these additional businesses
acquired, 22 were accounted for as poolings-of-interests and are referred to
herein as the "Pooled Companies." The remaining businesses acquired were
accounted for as purchases and are referred to herein as the "Purchased
Companies" (see Note 5).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the
accounts of Coach USA, the Purchased Companies since their respective dates of
acquisition and give retroactive effect to the acquisitions of the Pooled
Companies.
INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The unaudited condensed consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC). Certain information and footnote disclosures, normally
included in annual financial statements prepared in accordance with generally
accepted accounting principles, have been condensed or omitted pursuant to those
rules and regulations, although the Company believes that the disclosures made
are adequate to make the information presented not misleading. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary to fairly present the financial position, results of operations and
cash flows with respect to the interim consolidated financial statements, have
been included. The results of operations for the interim periods are not
necessarily indicative of the results for the entire fiscal year.
It is suggested that these condensed consolidated financial statements be
read in conjunction with the audited consolidated financial statements and notes
thereto included in Coach USA's Annual Report on Form 10-K for the year ended
December 31, 1997, as filed with the SEC.
SEASONALITY
The timing of certain holidays, weather conditions and seasonal vacation
patterns may cause the Company's quarterly results of operations to fluctuate
significantly. The Company expects to realize higher revenues, operating income
and net income during the second and third quarters and lower revenues and net
income during the first and fourth quarters.
7
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --
(CONTINUED)
RECLASSIFICATIONS
Certain reclassifications have been made in prior periods to conform with
the current presentation. All significant intercompany transactions have been
eliminated in consolidation.
FOREIGN CURRENCY TRANSLATION
The Company's Canadian subsidiaries maintain their books and records in
Canadian dollars. Assets and liabilities of these operations are translated into
U.S. dollars at the exchange rate in effect at the end of each accounting
period, and income statement accounts are translated at the average exchange
rate prevailing during the period. Gains and losses resulting from such
translation are reported as an element of comprehensive income and as a separate
component of stockholders' equity. Gains and losses from transactions in foreign
currencies are reported in other income and are not significant.
NEW ACCOUNTING PRONOUNCEMENT
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income."
SFAS No. 130 requires the reporting of comprehensive income in addition to net
income from operations. Comprehensive income is a more inclusive financial
reporting methodology that includes disclosure of certain financial information
that historically has not been recognized in the calculation of net income from
operations. The Company has adopted SFAS No. 130 effective January 1, 1998. For
the six months ended June 30, 1997 and 1998, the only component of other
comprehensive income was unrealized gains (losses) on foreign currency
translation. Comprehensive income for the six months ended June 30, 1997 and
1998 was $11.0 million and $17.3 million, respectively.
3. NET INCOME PER COMMON SHARE
Earnings per share amounts are based on the weighted average number of shares
of common stock and common stock equivalents outstanding during the period. The
weighted average number of shares used to compute basic and diluted earnings per
share for the three months ended June 30, 1997 and 1998 are illustrated below
(in thousands):
8
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --
(CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- ------------------
1997 1998 1997 1998
------- -------- ------ ------
<S> <C> <C> <C> <C>
Net income:
Net income for basic earnings per share -
income available to common stockholder .......... $ 9,638 $15,083 $11,196 $17,438
Effect of convertible subordinated notes under the
"if converted" method - interest expense addback,
net of taxes .................................... 299 394 289 789
------- ------- ------- -------
Net income for diluted earnings per share - income
available to common stockholders ................ $ 9,937 $15,477 $11,485 $18,227
======= ======= ======= =======
Weighted average shares:
Weighted average shares outstanding for
basic earnings per share ........................ 21,329 23,703 21,188 22,868
Effect of dilutive stock options and warrants ...... 370 836 401 736
Effect of convertible subordinated notes under
the "if converted" method - weighted average
convertible shares issuable ..................... 1,148 1,389 634 1,441
------- ------- ------- -------
Weighted average shares outstanding for diluted
earnings per share .............................. 22,847 25,928 22,223 25,045
======= ======= ======= =======
</TABLE>
4. LONG TERM OBLIGATIONS
In August 1998, the Company amended and restated its credit agreement. The
credit agreement, as amended, provides for a revolving credit facility totaling
$425 million through a bank syndicate and allows for an additional $80 million
of debt outside the credit facility, in addition to fully subordinated debt. The
revolving credit facility consists of two tranches. Tranche "A" is a $300
million credit facility that matures in August 2001, at which time all amounts
then outstanding become due. Tranche "B" is a $125 million credit facility that
provides for a 364 day term which may be renewed or converted to a two-year term
loan. The proceeds of the facility are to be used for working capital, capital
expenditures and acquisitions, including refinancing of indebtedness related to
acquisitions. The facility is secured by substantially all of the assets of the
Company and matures in August 2001, at which time all amounts then outstanding
become due. Interest on outstanding borrowings is charged, at the Company's
option, at the bank's prime rate, or the London Interbank Offered Rate ("LIBOR")
plus 0.50% to 1.25%, both as determined by the ratio of the Company's funded
debt to cash flow, as defined. A commitment fee is payable on the unused portion
of the facility. Under the terms of the credit agreement, the Company must
maintain certain minimum financial ratios. The credit agreement prohibits the
payment of cash dividends. As of June 30, 1998, the Company had a total of
$208.5 million outstanding under the revolving and other outside credit
facilities and had utilized $16.4 million of the facility for letters of credit
securing certain insurance obligations and performance bonds, resulting in a
borrowing availability of $155.1 million under the revolving and other outside
credit facilities.
CONVERTIBLE SUBORDINATED NOTES
As of June 30, 1998, the Company had outstanding $62.7 million of
convertible subordinated notes issued to certain former owners of the Purchased
Companies as partial consideration of the acquisition purchase price. The notes
bear interest at a weighted average interest rate of 4.66% and are convertible
by the holder into shares of Common Stock at any time after one year of
issuance. In conjunction with an offering of the Company's Common Stock
completed in May 1998, certain noteholders converted
9
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --
(CONTINUED)
approximately $21.2 million of convertible subordinated notes into approximately
612,000 shares of Common Stock.
SECONDARY OFFERING OF COMMON STOCK
During the second quarter of 1998, the Company completed the sale of
2,300,000 shares of Common Stock in a secondary public offering. The proceeds
from the offering of $98.4 million, net of underwriters' commissions and other
expenses, were used to repay amounts owed under the credit facility.
5. BUSINESS COMBINATIONS
POOLINGS
During 1997, the Company acquired all of the outstanding stock of sixteen
companies in exchange for approximately 3,900,000 shares of Common Stock. These
acquisitions have been accounted for as poolings- of-interests and the results
of operations of these companies are included for all periods presented herein.
The prior periods presented have not been restated for three of these companies,
the Immaterial Pooled Companies. There were no acquisitions completed during the
six months ended June 30, 1998 which were accounted for as
poolings-of-interests.
PURCHASES
During 1997, the Company acquired twenty businesses in transactions
accounted for as purchases. The aggregate consideration paid in these
transactions was $64.6 million in cash, net of cash acquired, approximately
595,000 shares of the Company's Common Stock and $33.8 million in subordinated
notes convertible into approximately 905,000 shares of Common Stock. The
accompanying condensed consolidated balance sheet as of June 30, 1998, includes
certain preliminary allocations of the respective purchase prices and is subject
to final adjustment. The preliminary allocations resulted in goodwill recognized
of $109.4 million, representing the excess of the purchase price over the fair
value of the net assets acquired.
During the six months ended June 30, 1998, the Company acquired additional
businesses in transactions accounted for as purchases. The aggregate
consideration paid in these transactions was $55.0 million in cash, net of cash
acquired, approximately 247,000 shares of the Company's Common Stock and $33.5
million in subordinated notes convertible into approximately 647,000 shares of
Common Stock. The accompanying condensed consolidated balance sheet as of June
30, 1998, includes certain preliminary allocations of the respective purchase
prices and is subject to final adjustment. The preliminary allocations resulted
in goodwill recognized of $74.5 million, representing the excess of the purchase
price over the fair value of the net assets acquired.
The PRO FORMA STATEMENT OF INCOME DATA INCLUDING COMPENSATION DIFFERENTIAL
AND OTHER ADJUSTMENTS below includes the historical financial statement data of
the Company (including the Pooled Companies) for all periods presented, the
Immaterial Pooled Companies from the beginning of the fiscal quarter in which
they were acquired, and the Purchased Companies since the date of their
respective acquisition. In addition, the data below gives pro forma effect to
(i) certain reductions in salaries and benefits to the former owners of the
Pooled Companies which were agreed to in connection with the acquisition of the
Pooled Companies, (the "Compensation Differential"); (ii) certain tax
adjustments related to the taxation of certain Pooled
10
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --
(CONTINUED)
Companies as S Corporations prior to the consummation of the acquisitions; (iii)
the tax impact of the Compensation Differential in each period; and (iv) the
elimination of non-recurring costs associated with certain acquisitions
accounted for as poolings-of-interests. The PRO FORMA FOR PURCHASED COMPANIES
data below gives effect to all items above and also gives effect to the
acquisition of the Purchased Companies as if those acquisitions occurred on
January 1, 1997, and gives further pro forma effect to (i) the Compensation
Differential of the Purchased Companies, (ii) the amortization of goodwill,
(iii) interest expense attributable to cash expended and convertible
subordinated notes issued in connection with the acquisition of the Purchased
Companies, (iv) an adjustment to record interest expense and debt issuance costs
related to the Senior Subordinated Notes issued in June 1997, as if the notes
had been outstanding for all periods presented, (v) an adjustment to record the
interest savings related to the paydown of debt from proceeds of the secondary
offering of Common Stock completed in May 1998, as if the offering had been
completed at the beginning of all periods presented, and (vi) income tax
adjustments attributable to the above adjustments (in thousands, except per
share data).
PRO FORMA STATEMENT OF INCOME DATA INCLUDING COMPENSATION DIFFERENTIAL AND
OTHER ADJUSTMENTS:
SIX MONTHS ENDED
JUNE 30,
--------------------
1997 1998
------- -------
(unaudited)
Revenues ................................ $235,244 $346,636
Income before extraordinary items ....... 12,416 17,865
Diluted income per share before
extraordinary items ................... 0.57 0.74
PRO FORMA FOR PURCHASED COMPANIES:
SIX MONTHS ENDED
JUNE 30,
--------------------
1997 1998
------- -------
(unaudited)
Revenues ................................. $333,418 $363,842
Income before extraordinary items......... 13,473 20,020
Diluted income per share before
extraordinary items..................... 0.54 0.77
The pro forma results presented above are not necessarily indicative of
actual results which might have occurred had the operations and management teams
of the Company, the Pooled Companies and the Purchased Companies been combined
at the beginning of the periods presented.
11
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --
(CONTINUED)
6. COMMITMENTS AND CONTINGENCIES
CLAIMS AND LAWSUITS
The Company is subject to certain claims and lawsuits arising in the normal
course of business, most of which involve claims for personal injury and
property damage incurred in connection with its operations. The Company
maintains various insurance coverages in order to minimize financial risk
associated with the claims. The Company has provided for certain of these
actions in the accompanying interim condensed consolidated financial statements.
In the opinion of management, uninsured losses, if any, resulting from the
ultimate resolution of these matters will not be material to the Company's
financial position or results of operations.
REGULATORY MATTERS
The Surface Transportation Board (STB) must approve or exempt any
consolidation or merger of two or more regulated interstate motorcoach operators
or the acquisition of one such operator by another. As of August 14, 1998, the
STB had approved or exempted from regulatory approval requirements each of the
acquisition transactions involving federally-regulated interstate motorcoach
operators entered into by the Company through March 1998. There can be no
assurance that the Company will be able to obtain such approval or exemption
with respect to the acquisitions completed after March 1998 or future
acquisitions.
ESTIMATED INSURANCE CLAIMS PAYABLE
The primary casualty risks in the Company's operations are bodily injury
and property damage to third parties and workers' compensation. The Company has
commercial liability insurance policies that provide coverage by the insurance
company, subject to deductibles ranging from $5,000 to $250,000. The Company is
consolidating its insurance coverages under a program which provides for
deductibles ranging from $100,000 to $250,000. As such, any claim within the
deductible per incident would be the financial obligation of the Company.
The accrued insurance claims payable represents management's estimate of
the Company's potential claims costs in satisfying the deductible provisions of
the insurance policies for claims occurring through June 30, 1998. The accrual
is based on known facts and historical trends. Management believes such accrual
to be adequate.
7. SUPPLEMENTAL GUARANTOR INFORMATION
The Company's payment obligations under the Senior Subordinated Notes are
jointly and severally guaranteed by all domestic subsidiaries (the Guarantors)
of the Company. The following unaudited condensed consolidating balance sheet,
statement of income and statement of cash flows presents the combined financial
statements of the Guarantors and non-guarantor subsidiaries. Separate financial
statements and other disclosures concerning the Guarantors are not deemed
material to investors.
12
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --
(CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF JUNE 30, 1998
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
COACH GUARANTOR NONGUARANTOR
USA, INC. SUBSIDIARIES SUBSIDIARIES ELIMINATION CONSOLIDATED
----------- ------------- ------------ ----------- ------------
ASSETS
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents .................... $ -- $ 8,440 $ (1,223) $ $ 7,217
Accounts receivable, net of allowance ........ -- 54,827 5,000 59,827
Inventories .................................. -- 27,434 1,615 29,049
Notes receivable, current portion ............ -- 4,602 -- 4,602
Prepaid expenses and other current assets .... -- 28,578 1,459 30,037
--------- -------- --------- --------- ---------
Total current assets ...................... -- 123,881 6,851 -- 130,732
PROPERTY & EQUIPMENT, net .................... -- 506,676 16,454 523,130
NOTES RECEIVABLE, net of allowance ........... -- 10,081 -- 10,081
GOODWILL, net ................................ -- 214,515 8,583 223,098
INTERCOMPANY & INVESTMENTS
IN SUBSIDIARIES ........................... 619,491 -- -- (619,491) --
OTHER ASSETS, net ............................ 6,892 11,903 548 19,343
--------- -------- --------- --------- ---------
Total assets .............................. $ 626,383 $867,056 $ 32,436 $(619,491) $ 906,384
========= ======== ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term obligations .. $ -- $ 535 $ 10,083 $ $ 10,618
Current maturities of convertible
subordinated notes ........................ -- 4,165 -- 4,165
Accounts payable and accrued liabilities ..... 7,937 107,968 6,861 122,766
--------- -------- --------- --------- ---------
Total current liabilities ................. 7,937 112,668 16,944 -- 137,549
LONG-TERM OBLIGATIONS, net of current
maturities ................................... 157,900 578,984 9,143 (548,103) 197,924
SENIOR SUBORDINATED NOTES ....................... 150,000 -- -- 150,000
CONVERTIBLE SUBORDINATED NOTES,
net of current maturities .................... -- 58,505 -- 58,505
DEFERRED INCOME TAXES ........................... -- 49,103 2,757 51,860
--------- -------- --------- --------- ---------
Total liabilities ......................... 315,837 799,260 28,844 (548,103) 595,838
STOCKHOLDERS' EQUITY:
Preferred stock .............................. -- -- -- -- --
Common stock ................................. 253 80 5 (85) 253
Additional paid-in capital ................... 254,154 55,442 1,668 (57,110) 254,154
Cumulative translation adjustment ............ (581) -- (581) 581 (581)
Retained earnings ............................ 56,720 12,274 2,500 (14,774) 56,720
--------- -------- --------- --------- ---------
Total stockholders' equity ................ 310,546 67,796 3,592 (71,388) 310,546
--------- -------- --------- --------- ---------
Total liabilities and stockholders' equity. 626,383 $ 867,056 $ 32,436 $(619,491) $ 906,384
========= ======== ========= ========= =========
</TABLE>
13
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --
(CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
COACH GUARANTOR NONGUARANTOR
USA, INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES ............................... $ -- $ 328,717 $ 17,919 $ $346,636
OPERATING EXPENSES ..................... -- 241,405 16,506 257,911
-------- --------- -------- --------- --------
Gross profit ........................ -- 87,312 1,413 -- 88,725
GENERAL AND ADMINISTRATIVE EXPENSES .... 30 38,627 1,539 40,196
AMORTIZATION EXPENSE ................... 702 2,236 134 3,072
ACQUISITION RELATED EXPENSES ........... -- -- -- -- --
-------- --------- -------- --------- --------
Operating income .................... (732) 46,449 (260) -- 45,457
INTEREST EXPENSE ....................... -- 15,405 765 16,170
EQUITY IN INCOME OF SUBSIDIARIES ....... 18,170 -- -- (18,170) --
-------- --------- -------- --------- --------
INCOME BEFORE TAXES AND
EXTRAORDINARY ITEMS ................. 17,438 31,044 (1,025) (18,170) 29,287
PROVISION FOR INCOME TAXES ............. -- 11,812 (390) 11,422
-------- --------- -------- --------- --------
INCOME BEFORE EXTRAORDINARY ITEMS ...... 17,438 19,232 (635) (18,170) 17,865
EXTRAORDINARY ITEMS, net of income taxes -- (427) -- (427)
-------- --------- -------- --------- --------
NET INCOME.............................. 17,438 $ 18,805 $ (635) $ (18,170) $ 17,438
======== ========= ======== ========= ========
</TABLE>
14
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --
(CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
COACH GUARANTOR NONGUARANTOR
USA, INC. SUBSIDIARIES SUBSIDIARIES ELIMINATION CONSOLIDATED
----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .......................................... $ 17,438 $ 18,805 $ (635) $(18,170) $ 17,438
Adjustments to reconcile net income--
Depreciation and amortization ..................... 702 21,968 1,025 23,695
Equity in income of subsidiaries .................. (18,170) -- -- 18,170 --
Gain on sale of assets ............................ -- (276) (10) (286)
Deferred income tax provision ..................... -- 6,976 (118) 6,858
Changes in operating assets and liabilities, net of
effect of Purchased Companies --
Accounts receivable, net ........................ -- (11,860) (1,703) (13,563)
Inventories ..................................... -- (7,585) (144) (7,729)
Prepaid expenses and other current assets ....... -- (3,351) 187 (3,164)
Accounts payable and accrued liabilities ........ 373 9,347 961 10,681
Other ........................................... 270 (1,377) 380 (717)
--------- --------- ------- --------- ---------
Net cash used in operating activities ......... 613 32,647 (47) -- 33,213
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment ................. -- (76,990) (2,918) (79,908)
Proceeds from sales of property and equipment ....... -- 2,669 822 3,491
Cash consideration paid for Purchased Companies, net (55,050) -- -- (55,050)
Increase in notes receivable ........................ -- (1,692) -- (1,692)
--------- --------- ------- --------- ---------
Net cash used in investing activities ......... (55,050) (76,013) (2,096) -- (133,159)
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany activity ............................... (136,021) 136,021 -- --
Principal payments on long-term obligations ......... -- (97,261) (1,162) (98,423)
Proceeds from issuance of long-term obligations ..... 95,848 -- 1,962 97,810
Proceeds from issuance of Common Stock .............. 104,230 -- -- 104,230
--------- --------- ------- --------- ---------
Net cash provided by financing activities ..... 64,057 38,760 800 -- 103,617
EFFECT OF EXCHANGE RATE CHANGES ....................... -- -- (102) -- (102)
--------- --------- ------- --------- ---------
NET INCREASE (DECREASE) IN CASH ....................... 9,620 (4,606) (1,445) -- 3,569
CASH AND CASH EQUIVALENTS,
beginning of period ................................. (9,620) 13,046 222 -- 3,648
--------- --------- ------- --------- ---------
CASH AND CASH EQUIVALENTS, end of period .............. $ -- $ 8,440 $(1,223) $ -- $ 7,217
========= ========= ======= ========= =========
</TABLE>
15
<PAGE>
COACH USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --
(CONTINUED)
8. SUBSEQUENT EVENTS
Subsequent to June 30, 1998, the Company acquired additional motorcoach
businesses in acquisitions accounted for as purchases. Combined consideration
for these acquisitions consisted of approximately $114.6 million in cash,
approximately 32,000 shares of Common Stock and $29.0 million in subordinated
notes.
16
<PAGE>
PART I, ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
This filing contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are based on
current plans and expectations of the Company and involve risks and
uncertainties that could cause actual future activities and results of
operations to be materially different from those set forth in the
forward-looking statements. Important factors that could cause actual results to
differ include, among others, risks associated with acquisitions, fluctuations
in operating results because of acquisitions and variations in stock prices,
changes in government regulations, competition, and risks of operations and
growth of the newly acquired businesses.
In May 1996, Coach USA acquired, simultaneously with the closing of its
initial public offering, six established businesses. Through June 30, 1998, the
Company has acquired additional businesses. Of these additional businesses
acquired, 22 were accounted for as poolings-of-interests and are referred to
herein as the "Pooled Companies." The remaining businesses acquired were
accounted for as purchases and are referred to herein as the "Purchased
Companies".
The Company continues to realize savings by consolidating certain general,
administrative and purchasing functions and reducing insurance expenses. These
savings are being partially offset by the costs of being a public company and
the incremental increase in costs related to the Company's corporate management.
Neither these savings nor the costs associated therewith for the periods prior
to the date of the respective acquisitions have been included in the financial
information discussed below. As such, historical results may not be comparable
to, or indicative of, future performance.
The Company's motorcoach revenues are derived from fares charged to
individual passengers and fees charged under contracts and other agreements to
provide motorcoach services. Taxicab operation revenues are derived from fees
and other services charged to independent taxicab operators. Operating expenses
consist primarily of salaries and benefits for motorcoach drivers and mechanics,
depreciation, maintenance, fuel, oil, insurance and direct tour expenses.
General and administrative expenses consist primarily of management and
administrative salaries and benefits, marketing, communications and professional
fees.
RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- -------------------
1997 1998 1997 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues ......................................... $138,712 $196,653 $235,244 $346,636
Operating Expenses ............................... 100,059 139,931 177,018 257,911
-------- -------- -------- --------
Gross Profit ..................................... 38,653 56,722 58,226 88,725
General and Administrative Expenses .............. 16,151 21,382 27,865 40,196
Amortization Expense ............................. 817 1,633 1,343 3,072
Acquisition Related Costs ........................ 255 -- 394 --
Interest Expense ................................. 4,484 8,425 8,683 16,170
-------- -------- -------- --------
Income Before Income Taxes and Extraordinary Items 16,946 25,282 19,941 29,287
Provision for Income Taxes ....................... 7,028 9,860 8,346 11,422
-------- -------- -------- --------
Income Before Extraordinary Items ................ $ 9,918 $ 15,422 $ 11,595 $ 17,865
======== ======== ======== ========
</TABLE>
17
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (CONTINUED)
The historical results above include the results of the Pooled Companies,
in all periods presented, and the Purchased Companies from their respective
dates of acquisition.
HISTORICAL RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 COMPARED
TO 1998
Revenues increased by 41.8% and 47.4% to $196.7 million and $346.6 million
for the three and six months ended June 30, 1998. The increase in revenues was
largely due to the incremental revenues of certain Purchased Companies acquired
in 1997 and 1998 of $44.8 million and $84.2 million, respectively, and
additional revenues of approximately $5.1 million and $10.2 million,
respectively, related to the expansion of transit services with the remaining
increase attributable to continued internal growth in the charter, tour and
taxicab operations.
Operating expenses increased 39.8% and 45.7% to $139.9 million and $257.9
million for the three and six months ended June 30, 1998, as compared to the
three and six months ended June 30, 1997. The increase in operating expenses was
primarily due to the acquisition of the Purchased Companies in 1997 and 1998 and
the overall increase in operations throughout the Company, partially offset by
savings in the Company's insurance and parts buying programs.
General and administrative expenses increased 32.4% and 44.3% to $21.4
million and $40.2 million for the three and six months ended June 30, 1998, as
compared to the three and six months ended June 30, 1997. The increase in
general and administrative expenses was primarily due to the acquisition of the
Purchased Companies in 1997 and 1998 and the additional costs of the corporate
management group required to execute the acquisition program and to manage the
consolidated group of companies.
Interest expense increased $3.9 million and $7.5 million for the three and
six months ended June 30, 1998, as compared to the three and six months ended
June 30, 1997, due to higher levels of debt resulting from cash paid, debt
assumed and convertible subordinated notes issued in connection with the
acquisition of certain Purchased Companies in 1997 and 1998, and the incremental
effect of the higher interest rate on the Company's senior subordinated notes
issued in June 1997.
Net income before extraordinary items increased during the three and six
months ended June 30, 1998 as compared to the three and six months ended June
30, 1997, primarily due to the acquisitions of the Purchased Companies and the
effects of increased purchasing power on lowering certain costs.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $33.2 million for the six
months ended June 30, 1998. Capital expenditures during the period, net of
trade-ins and proceeds from sales of property and equipment, totaled $76.4
million. The majority of the capital expenditures were for the purchase of
motorcoach equipment for fleet additions.
In August 1998, the Company amended and restated its credit agreement. The
credit agreement, as amended, provides for a revolving credit facility totaling
$425 million through a bank syndicate and allows for an additional $80 million
of debt outside the credit facility, in addition to fully subordinated debt. The
revolving credit facility consists of two tranches. Tranche "A" is a $300
million credit facility that matures in August 2001, at which time all amounts
then outstanding become due. Tranche "B" is a $125 million credit facility that
provides for a 364 day term which may be renewed or converted to a two-year term
loan. The proceeds of the facility are to be used for working capital, capital
expenditures and acquisitions,
18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- (CONTINUED)
including refinancing of indebtedness related to acquisitions. The facility is
secured by substantially all of the assets of the Company and matures in August
2001, at which time all amounts then outstanding become due. Interest on
outstanding borrowings is charged, at the Company's option, at the bank's prime
rate, or the London Interbank Offered Rate ("LIBOR") plus 0.50% to 1.25%, both
as determined by the ratio of the Company's funded debt to cash flow, as
defined. A commitment fee is payable on the unused portion of the facility.
Under the terms of the credit agreement, the Company must maintain certain
minimum financial ratios. The credit agreement prohibits the payment of cash
dividends. As of August 14, 1998, the Company had a total of $335.5 million
outstanding under the revolving and other outside credit facilities and had
utilized $16.4 million of the facility for letters of credit securing certain
insurance obligations and performance bonds, resulting in a borrowing
availability of $153.1 million under the revolving and other outside credit
facilities.
During the second quarter of 1998, the Company completed the sale of
2,300,000 shares of Common Stock in a secondary public offering. The proceeds
from the offering of $98.4 million, net of underwriters' commissions and other
expenses, were used to repay amounts owed under the credit facility. In
addition, certain noteholders converted approximately $21.2 million of
convertible subordinated notes previously issued in connection with certain
acquisitions, resulting in the issuance of approximately 612,000 additional
shares of Common Stock.
Subsequent to June 30, 1998, the Company acquired additional motorcoach
businesses in acquisitions accounted for as purchases. Combined consideration
for these acquisitions consisted of approximately $114.6 million in cash,
approximately 32,000 shares of Common Stock and $29.0 million in subordinated
notes.
Management believes that the Company's revolving credit facility, its cash
flows from operations, and shares of Common Stock available under its shelf
registration statement will provide sufficient liquidity or acquisition currency
to execute the Company's acquisition and internal growth plans for the next
twelve months. Should the Company accelerate its acquisition program, the
Company may need to seek additional financing through the public or private sale
of equity or debt securities. There can be no assurance that the Company could
secure such financing if and when it is needed or on terms the Company deems
acceptable.
YEAR 2000 ISSUES
Some of the existing operating and financial computer systems utilized by
the Company at its operating subsidiaries will need to be modified or replaced
by the Company or its vendors to increase the date field or make other
modifications to reflect the upcoming change in the century. If such
replacements and modifications are not made, the currently identified operating
subsidiaries may experience temporary problems with certain date critical
functions. Management believes that any temporary disruptions would not be
material to the Company's overall business or results of operations. The Company
is developing a plan to address these issues and, at this time, does not believe
the cost of remediation will have a material impact on the Company's overall
business or results of operations. However, as a result of the Company's ongoing
acquisition program, the Company's assessment of potential Year 2000 issues is
not complete. As such, there can be no assurance that the systems of newly
acquired companies, vendors and other third party relationships on which the
Company may rely will be made Year 2000 compliant in a timely manner or that any
such failure to be Year 2000 compliant by another company would not have a
material adverse effect on the Company's business or results of operations.
19
<PAGE>
COACH USA, INC.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
None.
Item 2. CHANGES IN SECURITIES.
The following information relates to securities of the Company issued or
sold by the Company during the three months ended June 30, 1998.
In connection with the acquisition of certain Purchased Companies
completed during the three months ended June 30, 1998, the Company
issued subordinated notes convertible into approximately 442,000 shares
of Common Stock to certain former owners of these businesses.
The foregoing transactions were effected without registration of the
relevant security under the Securities Act of 1933 in reliance upon the
exemption provided by Section 4(2) of the Securities Act of 1933 for
transactions not involving a public offering.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its annual meeting of stockholders in Houston, Texas on
June 4, 1998. The following sets forth matters submitted to a vote of
the stockholders:
(a) The following individuals were elected to the Board of Directors
as stated in the Company's Proxy Statement dated May 1, 1998, for
terms expiring at the 2001 annual stockholders' meeting or until
their successors have been elected and qualified - Class II
Directors: Richard H. Kristinik and Paul M. Verrochi.
Every Director was elected by a vote of 18,053,667 shares, being
more than a majority of the outstanding shares of Common Stock of
the Company, with 222,810 shares withheld. The balance of the
Company's Board of Directors includes Messrs. Steven S. Harter,
Gerald Mercadante and John Mercadante, Jr. whose terms expire at
the 1999 annual stockholders' meeting or until their successors
have been elected or qualified and Messrs. Frank P. Gallagher,
Lawrence K. King and William J. Lynch whose terms expire at the
2000 annual stockholders' meeting or until their successors have
been elected or qualified.
(b) The stockholders approved the Amended and Restated 1996 Long-Term
Incentive Plan ("Plan") by a vote of 11,100,280 shares, being more
than a majority of the outstanding shares of Common Stock of the
Company, with 5,210,202 shares voted against, 7,560 shares
abstaining. The Plan increased the amount of the aggregate number
of shares of Common Stock available for grant from 15% to 18% of
the shares of Common Stock outstanding. The Plan was renamed the
"1998 Long-Term Incentive Plan."
20
<PAGE>
(c) The stockholders ratified the appointment of Arthur Andersen LLP
to audit the financial statements of the Company and its
subsidiaries for the year ending December 31, 1998, by a vote of
18,260,828 shares, being more than a majority of the outstanding
shares of Common Stock of the Company, with 10,788 shares voted
against, 3,260 shares abstaining.
Proposals of stockholders to be included in the Company's proxy
statement and form of proxy relating to the Company's 1999 Annual
Meeting of Stockholders must be received by the Secretary of the Company
at the Company's principal executive offices no later than January 1,
1999, and must otherwise comply with the requirements of Rule 14a-8
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Company may exercise discretionary voting authority with
respect to any stockholder proposal submitted for consideration at the
Company's 1999 Annual Meeting of Stockholders and not included in the
Company's proxy statement and form of proxy unless notice of such
proposal (i) is received by the Secretary of the Company no later than
March 17, 1999, and (ii) is accompanied by a written statement as
required by Rule 14a-4 under the Exchange Act.
Item 5. OTHER INFORMATION.
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
10 - Material Contracts - August 1998 Amended and Restated Credit
Agreement *
27 - Financial Data Schedule.
(b) Reports on Form 8-K.
None.
* To be filed by Ammendment
21
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant, Coach USA, Inc., has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
COACH USA, INC.
Dated: August 14, 1998
By: LAWRENCE K. KING
Name: Lawrence K. King
Title: Senior Vice President and
Chief Financial Officer
22
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1998
<CASH> 7,217
<SECURITIES> 0
<RECEIVABLES> 63,980
<ALLOWANCES> (4,153)
<INVENTORY> 29,049
<CURRENT-ASSETS> 130,732
<PP&E> 634,445
<DEPRECIATION> (111,315)
<TOTAL-ASSETS> 906,384
<CURRENT-LIABILITIES> 137,549
<BONDS> 150,000
0
0
<COMMON> 253
<OTHER-SE> 310,293
<TOTAL-LIABILITY-AND-EQUITY> 906,384
<SALES> 346,636
<TOTAL-REVENUES> 346,636
<CGS> 257,911
<TOTAL-COSTS> 301,179
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,170
<INCOME-PRETAX> 29,287
<INCOME-TAX> 11,422
<INCOME-CONTINUING> 17,865
<DISCONTINUED> 0
<EXTRAORDINARY> (427)
<CHANGES> 0
<NET-INCOME> 17,438
<EPS-PRIMARY> .76
<EPS-DILUTED> .73
</TABLE>
