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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 31, 1997 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 Pending_____________________________________________
Atlantic Express Transportation
Corp.
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(Exact Name of Registrant as Specified in Its Charter)
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New York 13-392-3467
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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7 North Street, Staten Island, New York,
10302-1205
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(Address of Principal Executive Offices) (Zip
Code)
(718)
442-7000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
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_______ No_______ Note: This is a voluntary filing; Registrant not yet
subject to Section 13 or 15(d).
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 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.
Yes_______ No_______
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the lates practicable date.
100 Shares of Common Stock, no par value.
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TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
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ITEM 1. Financial Statements:
Consolidated Balance Sheets at March 31, 1997 (unaudited) and June 30, 1996............... 1
Consolidated Statements of Operations for the Three Month Periods Ended March 31, 1997 and
1996 (unaudited) and the Nine Month Periods Ended March 31, 1997 and 1996 (unaudited).... 2
Consolidated Statements of Cash Flows for the Nine Month Periods Ended March 31, 1997 and
1996 (unaudited)......................................................................... 3
Notes to Consolidated Financial Statements (unaudited).................................... 5
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations........................................................................... 6
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PART II. OTHER INFORMATION
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None.
Signatures.............................................................. 10
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ATLANTIC EXPRESS TRANSPORTATION CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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MARCH 31,
1997
JUNE 30, -------------
1996
------------- (UNAUDITED)
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ASSETS
Current:
Cash and cash equivalents......................................................... $ 1,211,258 $ 22,593,492
Marketable securities............................................................. -- 1,500,000
Accounts receivable............................................................... 25,687,921 28,337,986
Replacement parts and other inventory............................................. 994,412 1,179,312
Notes receivable.................................................................. 180,760 165,984
Prepaid expenses and other current assets......................................... 5,120,364 6,165,191
------------- -------------
Total current assets.......................................................... 33,194,715 59,941,965
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Property, plant and equipment, less accumulated depreciation........................ 58,193,715 72,341,941
------------- -------------
Other assets:
Restricted cash and cash equivalents.............................................. 1,870,000 1,120,000
Retainage......................................................................... 513,556 513,556
Investments....................................................................... 229,000 229,000
Marketable securities............................................................. -- 2,516,072
Deferred lease expense............................................................ 655,008 644,427
Transportation contract rights, net............................................... 3,391,718 3,040,698
Deferred financing and organization costs, net.................................... 704,781 5,822,672
Due from affiliates............................................................... 4,468,974 4,421,396
Notes receivable.................................................................. 293,664 165,133
Deposits and other noncurrent assets.............................................. 858,482 1,196,793
Deferred tax assets............................................................... -- 686,800
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Total other assets............................................................ 12,985,183 20,356,547
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$ 104,373,613 $ 152,640,453
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LIABILITIES AND STOCKHOLDER'S EQUITY
Current:
Current portion of long-term debt................................................. $ 11,328,497 $ 136,691
Accounts payable.................................................................. 1,760,426 1,645,798
Accrued compensation.............................................................. 3,116,893 5,507,728
Accrued workmen's compensation.................................................... 60,000 1,322,488
Current portion of insurance reserve.............................................. 1,447,000 2,351,130
Accrued interest.................................................................. -- 1,970,835
Other accrued expenses and current liabilities.................................... 4,301,210 285,265
Payable to creditors under the plan of reorganization............................. 331,815 104,516
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Total current liabilities..................................................... 22,345,841 13,324,451
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Long-term debt, net of current portion.............................................. 48,326,701 110,524,483
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Payable to creditors -- noncurrent.................................................. 39,975 --
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Other long-term liabilities......................................................... 2,285,619 3,050,477
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Deferred income taxes............................................................... 1,890,000 --
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Stockholder's equity:
Common Stock -- authorized 200 shares, issued and outstanding 100 shares:......... 250,000 250,000
Additional paid-in capital........................................................ 13,188,926 13,188,926
Retained earnings................................................................. 16,046,551 12,456,381
Unrealized loss on marketable securities, net..................................... -- (154,265)
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Total stockholder's equity.................................................... 29,485,477 25,741,042
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$ 104,373,613 $ 152,640,453
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</TABLE>
See accompanying notes to consolidated financial statements.
1
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ATLANTIC EXPRESS TRANSPORTATION CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
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THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
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1996 1997 1996 1997
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(UNAUDITED) (UNAUDITED)
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Revenues........................................................... $ 41,599,978 $ 45,546,940 $ 101,161,414 $ 115,713,501
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Costs and expenses:
Cost of operations............................................... 33,653,600 37,736,152 82,139,069 97,392,122
General and administrative....................................... 2,699,932 3,042,330 7,790,427 8,595,279
Depreciation and amortization.................................... 2,610,372 2,743,029 7,496,257 8,097,779
------------- ------------- ------------- -------------
38,963,904 43,521,511 97,425,753 114,085,180
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Income (loss) from operations................................ 2,636,074 2,025,429 3,735,661 1,628,321
Interest........................................................... 1,471,974 2,810,345 3,761,937 5,958,979
------------- ------------- ------------- -------------
Income (loss) before provision (benefit) for income taxes and
extraordinary item............................................. 1,164,100 (784,916) (26,276) (4,330,658)
Provision (benefit) for income taxes............................. 452,045 (386,048) (9,197) (1,818,800)
------------- ------------- ------------- -------------
Income (loss) before extraordinary item.......................... 712,055 (398,868) (17,079) (2,511,858)
Extraordinary items:
Loss on early extinguishment of debt net of tax benefit of
$390,000....................................................... -- 522,369 -- 552,369
Write-off of deferred finance charges net of tax benefit of
$368,000 as a result of re-financing........................... -- 525,943 -- 525,943
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Net income (loss).................................................. $ 712,055 $ (1,477,180) $ (17,079) $ (3,590,170)
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See accompanying notes to consolidated financial statements.
2
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ATLANTIC EXPRESS TRANSPORTATION CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
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NINE MONTHS ENDED
MARCH 31,
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1996 1997
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(UNAUDITED)
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Cash flows from operating activities:
Net income (loss)................................................................ (17,079) (3,590,170)
Adjustments to reconcile net loss to net cash provided by operating activities:
Extraordinary items............................................................ -- 1,836,312
Deferred income taxes.......................................................... -- (2,576,800)
Depreciation................................................................... 6,919,850 7,313,809
Amortization................................................................... 576,407 783,970
Transfer to restricted cash.................................................... (1,120,000) --
Other.......................................................................... (220,832) --
Decrease (increase) in:
Accounts receivable and retainage............................................ (6,055,134) (2,650,065)
Inventory.................................................................... (270,789) (184,900)
Prepaid expenses and other current assets.................................... (525,184) (1,044,827)
Deferred lease expense....................................................... 67,632 10,581
Deposits and other noncurrent assets......................................... 6,397 (338,311)
Increase (decrease) in:
Accounts payable............................................................. (174,992) (114,628)
Accrued expenses and other current liabilities............................... 4,318,933 2,512,343
Other long-term liabilities.................................................. 234,900 764,858
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Net cash provided by operating activities.................................... 3,740,109 2,722,172
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See accompanying notes to consolidated financial statements.
3
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ATLANTIC EXPRESS TRANSPORTATION CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
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NINE MONTHS ENDED
MARCH 31,
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1996 1997
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(UNAUDITED)
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Cash flows from investing activities:
Additions to property, plant and equipment....................................... (3,142,910) $ (9,574,493)
Purchase of transportation contract rights....................................... (688,833) (250,000)
Due from affiliates.............................................................. (100,596) 47,578
Notes receivable................................................................. 771,161 143,307
Investments...................................................................... -- (4,170,337)
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Net cash used in investing activities........................................ (3,161,178) (13,803,946)
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Cash flows from financing activities:
Proceeds of additional borrowings................................................ 6,515,269 118,473,894
Principal payments on borrowings................................................. (7,315,268) (79,536,124)
Deferred financing and organization costs........................................ (166,999) (6,206,488)
Transfer to restricted cash...................................................... (750,000) --
Payments to creditors under the plan of reorganization........................... (1,086,716) (267,274)
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Net cash provided by (used in) financing activities.......................... (2,803,714) 32,464,008
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Net increase (decrease) in cash and cash equivalents............................... (2,224,783) 21,382,234
Cash and cash equivalents, beginning of period..................................... 3,700,128 1,211,258
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Cash and cash equivalents, end of period........................................... $ 1,475,345 $ 22,593,492
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Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest....................................................................... $ 2,522,800 $ 3,260,367
Income taxes................................................................... 68,000 80,000
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Supplemental schedule of noncash investing and financing activities:
Loans incurred for purchase of property, plant and equipment..................... $ 15,810,361 $ 11,887,542
Loans incurred for purchase of contract rights................................... 2,670,000 --
Deferral of payment for contract rights.......................................... 250,000 --
Use of restricted cash to pay down debt.......................................... -- 750,000
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See accompanying notes to consolidated financial statements.
4
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ATLANTIC EXPRESS TRANSPORTATION CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF ACCOUNTING
These consolidated financial statements should be read in conjunction with
the consolidated financial statements and related notes contained in the
Company's financial statements as of and for the year ended June 30, 1996. In
the opinion of management, all adjustments and accruals (consisting only of
normal recurring adjustments) which are necessary for a fair presentation of
operating results are reflected in the accompanying financial statements.
Operating results for the periods presented are not necessarily indicative
of the results for the full fiscal year.
ACCOUNTING POLICIES: The following accounting policy has been adopted by
the Company subsequent to the June 30, 1996 financial statements due to the
recent purchase of marketable securities.
MARKETABLE SECURITIES: In accordance with Financial Accounting Standards
Board Statement No. 115, the Company determines the classification of securities
as held-to-maturity or available-for-sale at the time of purchase, and
reevaluates such designation as of each balance sheet date. Securities are
classified as held-to-maturity when the Company has the positive intent and
ability to hold the securities to maturity. Held-to-maturity securities are
stated at cost, adjusted for amortization of premiums and discounts to maturity.
Marketable securities not classified as hold-to-maturity are classified as
available-for-sale. Available-for-sale securities are carried at fair value,
with unrealized gains and losses, net of tax, reported as a separate component
of stockholder's equity. The cost of securities available-for-sale is adjusted
for amortization of premiums and discounts to maturity. Interest and
amortization of premiums and discounts for all securities are included in
interest income. Realized gains and losses are included in other income. The
cost of securities sold is based on the specific identification method.
2. REFINANCING
On February 4, 1997, the Company issued $110,000,000 aggregate principal
amount of its 10 3/4% Senior Secured Notes due 2004 (the "Original Notes"). The
net proceeds from the sale of the Original Notes were used to repay its existing
indebtedness, to buy-out certain leases and for certain other corporate
purposes. The Original Notes contain certain covenants, including limitations on
payments of dividends. Pursuant to the registration rights agreement relating to
the Original Notes (the "Registration Rights Agreement"), the Original Notes
were required to be registered with the Securities and Exchange Commission by
July 3, 1997. Due to the acquisition of Central and the entrance into the Los
Angeles market, such registration did not occur by its given deadline, and the
Company is required to pay penalties of $5,500 per week for the first 90 days
and $11,000 per week thereafter until such registration is effective.
Penalties incurred upon the above mentioned early extinguishment of debt and
unamortized deferred finance charges written off have been reported net of their
related tax benefits as extraordinary items. Upon consummation of the offering
of the Original Notes, the Company entered into a $30.0 million revolving credit
facility (the "Revolving Credit Facility").
3. SUBSEQUENT EVENTS
The Company signed a definitive agreement, effective July 1, 1997, to
acquire 100% of the common stock of Central New York Coach Sales & Service, Inc.
and Jersey Bus Sales, Inc. and related real property (collectively, "Central").
Total consideration consisted of (i) $26.5 million cash, including the repayment
of long term indebtedness as of June 30, 1997 (at March 31, 1997 long term debt
was $5.3 million), (ii) the repayment of short term indebtedness net of cash as
of June 30, 1997 (at March 31, 1997 such net short
5
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ATLANTIC EXPRESS TRANSPORTATION CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. SUBSEQUENT EVENTS (CONTINUED)
term debt was $3.0 million) and (iii) the issuance of a $2.2 million note and
mortgage relating to certain real property.
In May 1997, the Los Angeles Unified School District awarded three contracts
(collectively, the "L.A. Contract") to the Company. The L.A. Contract is for
five years, commencing in September 1997.
The Company estimates that entrance into the Los Angeles market will require
approximately $12.6 million of capital expenditures, including approximately
$2.9 million for the purchase of real property, $8.5 million for the purchase of
vehicles and $1.2 million for real property improvements.
In July 1997, the Company entered into negotiations with respect to the
issuance of approximately $40,000,000 additional aggregate principal amount of
its 10 3/4% Senior Secured Notes due 2004 (the "Additional Notes") in order to
consumate the acquisition of Central and the Company's entrance into the Los
Angeles market.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT
OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
REVENUES. Revenues were $45.5 million for the three months ended March 31,
1997 compared to $41.6 for the comparable period in 1996, an increase of $3.9
million or 9.5%. This increase was due primarily to (i) the award of a new
contract in St. Louis which commenced in September 1996 and added $2.3 million
of revenues, (ii) new contracts awarded to the Paratransit Division which added
$1.3 million of revenues and, (iii) $0.3 million in contract rate increases and
other billings.
GROSS PROFIT. Gross profit decreased by $0.1 million or 1.7% to $7.8
million for the three months ended March 31, 1997 from $7.9 million for the
three months ended March 31, 1996. This decrease was due primarily to (i)
increases in fuel costs for the three months ended March 31, 1997 compared to
March 31, 1996 and (ii) three less revenue days (partially offset by one less
payroll day) in the 1997 period compared to the prior year under the New York
City Board of Education contracts due to the nature of the school calendar. As a
percentage of revenues, gross profit was 17.1% and 19.1% for the three months
ended March 31, 1997 and March 1996, respectively.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
were $3.0 million for the three months ended March 31, 1997 compared to $2.7
million for the three months ended March 31, 1996, an increase of $0.3 million
or 12.7%. This increase was related primarily to increased administrative
payroll costs related to a new contract in St. Louis and other office staff
additions.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses were
$2.7 million for the three months ended March 31, 1997 compared to $2.6 million
for the three months ended March 31, 1996, an increase of $0.1 million or 5.1%.
This increase was due primarily to the purchase of additional vehicles for new
contracts.
INCOME FROM OPERATIONS. Income from operations was $2.0 million for the
three months ended March 31, 1997 compared to $2.6 million for the three months
ended March 31, 1996, a $0.6 million decrease.
6
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ATLANTIC EXPRESS TRANSPORTATION CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NINE MONTHS ENDED MARCH 31, 1997 COMPARED TO NINE MONTHS ENDED MARCH 31, 1996
REVENUES. Revenues were $115.7 million for the nine months ended March 31,
1997 compared to $101.2 million for the comparable period in 1996 an increase of
$14.5 million or 14.4%. This increase was due primarily to (i) new contracts
awarded to the Paratransit Division, which added $4.7 million of revenues; (ii)
$1.4 million in contract rate increases and other billings; (iii) the
acquisition of school bus routes in the State of New York in October 1995, which
added $1.0 million of revenues; (iv) the award of a new contract in St. Louis,
which was initiated in September 1996 and added $5.9 million of revenues; (v)
$0.6 million of additional summer contracts: and (vi) $0.9 million of additional
Pre-K/Medicaid billings.
GROSS PROFIT. Gross profit was $18.3 million for the nine months ended
March 31, 1997 compared to $19.0 million for the nine months ended March 31,
1996 a decrease of $0.7 million or 3.7%. This decrease was due primarily to (i)
an increase in fuel costs for the nine months ended March 31, 1997 from nine
months ended March 31, 1996 and (ii) two additional salary days and two less
revenue days in the 1997 period compared to the 1996 period under the New York
City Board of Education contracts due to the nature of the school calendar. As a
percentage of revenues, gross profit was 15.8% and 18.8% for the nine months
ended March 31, 1997 and March 31, 1996, respectively.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
were $8.6 million for the nine months ended March 31, 1997 compared to $7.8
million for the nine months ended March 31, 1996, an increase of $0.8 million or
10.3%. This increase was related primarily to increased administrative payroll
costs related to a new contract in St. Louis and other office additions.
However, general and administrative expenses decreased as a percentage of
revenues to 7.4% in the nine months ended March 31, 1997 from 7.7% in the nine
months ended March 31, 1996, primarily as a result of the Company's increase in
sales and its ability to spread the cost of its administrative staff and
facilities over a larger revenue base.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense was
$8.1 million for the nine months ended March 31, 1997, compared to $7.5 million
for the nine months ended March 31, 1996, an increase of $0.6 million or 8.0%.
This increase was due primarily to the purchase of additional vehicles for new
contracts.
INCOME FROM OPERATIONS. Income from operations was $1.6 million for the
nine months ended March 31, 1997 compared to $3.7 million for the nine months
ended March 31, 1996, a $2.1 million decrease.
LIQUIDITY AND CAPITAL RESOURCES
This Form 10-Q contains certain forward-looking statements, including
statements containing the words "believes," "anticipates," "expects," and words
of similar import. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements express or implied by such
forward-looking statements.
The Company had historically financed both its working capital and capital
expenditures with short-term financing. As a result, the Company had been
subject to significant debt amortization and refinancing requirements which
strained the Company's cash flows, especially during the seasonal low periods.
On February 4, 1997, the Company issued $110,000,000 of the Original Notes.
The net proceeds from the sale of the Original Notes were used to repay its
existing indebtedness, to buy-out certain leases and for certain other corporate
purposes. The Original Notes contain certain covenants, including limitations on
7
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ATLANTIC EXPRESS TRANSPORTATION CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
payments of dividends. Pursuant to the Registration Rights Agreement, the
Original Notes were required to be registered with the Securities and Exchange
Commission by July 3, 1997. Due to the acquisition of Central and the entrance
into the Los Angeles market, such registration did not occur by its given
deadline, and the Company is required to pay penalties of $5,500 per week for
the first 90 days and $11,000 per week thereafter until such registration is
effective.
Management believes that cash balances generated by the Offering of the
Original Notes and its Revolving Credit Facility, which was undrawn at March 31,
1997, will provide the Company with significantly more liquidity.
Management anticipates total capital expenditures of $23.2 million in fiscal
1997, of which approximately $21.5 million were funded by March 31, 1997,
including $6.2 million from the proceeds of the offering of the Original Notes.
The capital expenditures made by March 31, 1997 include approximately $10.2
million for the purchase of new buses for the new contract in St. Louis and $5.1
million of capital expenditures for additional vehicles, equipment and the
expansion of the Company's corporate headquarters. The capital expenditures
funded from the proceeds of the offering of the Original Notes relate to the
acquisition of a new Medicaid business and purchase of certain assets previously
leased. With the current fleet size, management anticipates making approximately
$3.5 million of annual capital expenditures for regular replacement of vehicles
and approximately $2.5 million of annual maintenance capital expenditures.
NET CASH PROVIDED BY OPERATING ACTIVITIES. Net cash provided by operating
activities was $2.7 million for the nine months ended March 31, 1997, primarily
due to $8.1 million of depreciation and amortization. This source of funds was
offset in part by a $3.6 million net loss and a $1.5 million use of funds for
working capital. Net cash provided by operating activities was $5.7 million for
fiscal 1996, due primarily to net income of $1.4 million and depreciation and
amortization of $9.7 million which were offset in part by $4.7 million of funds
used for working capital and $1.1 million of funds transferred to restricted
cash as collateral for a letter of credit.
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES. For the nine months
ended March 31, 1997, the Company made $21.5 million of capital expenditures to
acquire additional vehicles and equipment, purchase certain assets previously
leased, and for expansion of the Company's corporate headquarters. Of these
capital expenditures, $11.9 million were directly financed. In addition, the
Company purchased $4.2 million of marketable securities. In fiscal 1996, the
Company made $20.6 million of capital expenditures, of which $17.4 million were
directly financed. In addition, the Company purchased $3.4 million of contract
rights in fiscal 1996, of which $2.7 million were directly financed. The Company
operates in a capital intensive industry which has historically required
significant capital expenditures to attain additional bus routes and purchase
additional buses to service such routes. The Company's maintenance capital
expenditures were approximately $1.7 million in fiscal 1996.
In July 1997, the Company signed a definitive agreement to acquire 100% of
the common stock of Central New York Coach Sales, Inc. and Jersey Bus Sales,
Inc. The Company will pay total consideration of $31.7 million, consisting of
(i) $26.5 million in cash (including the repayment of long-term indebtedness);
(ii) the assumption and repayment of $3.0 million of short-term indebtedness net
of cash (as of March 31, 1997); and (iii) the issuance of a $2.2 million
mortgage and note relating to certain real property. If the acquisition of
Central had occurred on June 30, 1996, the Company believes that it would have
reduced its capital expenditure requirements by approximately $1.9 million in
the year ended June 30, 1997 by purchasing buses through Central at more
favorable rates.
8
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ATLANTIC EXPRESS TRANSPORTATION CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
In May 1997, the Los Angeles Unified School District awarded the L.A.
Contract to the Company. The L.A. Contract is a five-year contract, with service
scheduled to commence in September 1997. The Company estimates that entrance
into the Los Angeles market will require approximately $12.6 million of capital
expenditures, including approximately $2.9 million for the purchase of real
property, $8.5 million for the purchase of vehicles and $1.2 million to real
properly improvements.
On April 30, 1997, the Company acquired substantially all of the assets of
V. Sabella Bus Co., Inc., a school bus business, for $1.1 million.
In July 1997, the Company entered into negotiations with respect to the
issuance of approximately $40,000,000 of the Additional Notes in order to
consumate the acquisition of Central and the Company's entrance into the Los
Angeles market.
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES. Net cash provided by
financing activities totaled $32.5 million for the nine months ended March 31,
1997, due primarily to $110 million of proceeds from the offering of the
Original Notes plus $8.5 million of additional borrowing (including an increase
of $2.9 million in the Company's revolving line of credit), offset by $79.8
million of principal and debt amortization requirement (including $73.8 million
used from the proceeds of the offering of the Original Notes). In addition, the
Company incurred $11.9 million of indebtedness to directly finance capital
expenditures for the nine months ended March 31, 1997. In fiscal 1996, net cash
used in financing activities totaled $5.0 million due to $12.1 million of
principal repayments and debt amortization requirements, which were offset by
$8.1 million of additional borrowings, used to finance normal working capital
needs and $0.8 million of funds transferred to restricted cash. In addition, the
Company incurred $20.1 million of aggregate indebtedness to directly finance
capital expenditures and acquisitions of contract rights.
At March 31, 1997, the Company's total debt and stockholder's equity were
$110.6 million and $25.7 million, respectively. The Company's ability to meet
its debt service obligations and to reduce its total indebtedness will depend
upon its future performance, which will be subject to general economic
conditions, its ability to achieve cost savings and other financial, business
and other factors affecting the operations of the Company, many of which are
beyond its control. If the Company cannot generate sufficient cash flow from
operations in the future to service its debt, it may be required to refinance
all or a portion of such debt (including the Notes), sell assets or obtain
additional financing. There can be no assurance that any such refinancing or
asset sales would be possible or that any additional financing could be
obtained.
Part II. OTHER INFORMATION
None.
9
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of
1934, the Company has duly caused this report to be signed on behalf by the
undersigned, thereunto duly authorized.
<TABLE>
<S> <C> <C>
ATLANTIC EXPRESS TRANSPORTATION CORP.
By: /s/ NATHAN SCHLENKER
-----------------------------------------
Nathan Schlenker
CHIEF FINANCIAL OFFICER
</TABLE>
August 5, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q AT
MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 22,593,492
<SECURITIES> 1,500,000
<RECEIVABLES> 28,503,970
<ALLOWANCES> 0
<INVENTORY> 1,179,312
<CURRENT-ASSETS> 59,941,965
<PP&E> 142,936,861
<DEPRECIATION> (70,594,920)
<TOTAL-ASSETS> 152,640,453
<CURRENT-LIABILITIES> 13,324,451
<BONDS> 150,524,483
0
0
<COMMON> 250,000
<OTHER-SE> 25,491,042
<TOTAL-LIABILITY-AND-EQUITY> 152,640,453
<SALES> 115,713,501
<TOTAL-REVENUES> 115,713,501
<CGS> 97,392,122
<TOTAL-COSTS> 114,085,180
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,958,979
<INCOME-PRETAX> (4,330,658)
<INCOME-TAX> (1,818,800)
<INCOME-CONTINUING> (2,511,858)
<DISCONTINUED> 0
<EXTRAORDINARY> (1,078,312)
<CHANGES> 0
<NET-INCOME> (3,590,170)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
