PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
COMMISSION FILE NUMBER 1-5046
CONSOLIDATED FREIGHTWAYS, INC.
Incorporated in the State of Delaware
I.R.S. Employer Identification No. 94-1444798
3240 Hillview Avenue, Palo Alto, California 94304
Telephone Number (415) 494-2900
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 and (2) has been subject to such
filing requirements for the past 90 days. Yes xx No
Number of shares of Common Stock, $.625 par value,
outstanding as of April 30, 1996: 43,998,515
PAGE 2
CONSOLIDATED FREIGHTWAYS, INC.
FORM 10-Q
Quarter Ended March 31, 1996
___________________________________________________________________________
___________________________________________________________________________
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 3
Statements of Consolidated Operations -
Three Months Ended March 31, 1996 and 1995 5
Statements of Consolidated Cash Flows -
Three Months Ended March 31, 1996 and 1995 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of
Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
PAGE 3
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1996 1995
(Dollars in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 110,884 $ 86,345
Trade accounts receivable, net of
allowances 732,852 762,134
Other accounts receivable 39,853 53,784
Operating supplies, at lower of average
cost or market 44,038 45,890
Prepaid expenses 98,384 69,374
Deferred income taxes 134,037 134,035
Total Current Assets 1,160,048 1,151,562
PROPERTY, PLANT AND EQUIPMENT, at cost
Land 179,554 177,614
Buildings and improvements 571,590 562,760
Revenue equipment 1,095,128 1,073,505
Other equipment and leasehold improvements 392,515 377,644
2,238,787 2,191,523
Accumulated depreciation and amortization (1,132,256) (1,115,538)
1,106,531 1,075,985
OTHER ASSETS
Restricted funds 14,073 11,189
Deposits and other assets 93,594 88,573
Unamortized aircraft maintenance, net 124,987 114,636
Costs in excess of net assets of businesses
acquired, net of accumulated amortization 305,881 308,141
538,535 522,539
TOTAL ASSETS $2,805,114 $2,750,086
The accompanying notes are an integral part of these statements.
PAGE 4
CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1996 1995
(Dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 279,762 $ 269,203
Accrued liabilities 478,173 474,028
Accrued claims costs 156,779 150,643
Current maturities of long-term debt and
capital leases 3,282 2,412
Short-term borrowings 90,000 50,000
Federal and other income taxes 9,308 12,938
Total Current Liabilities 1,017,304 959,224
LONG-TERM LIABILITIES
Long-term debt and guarantees 381,425 384,545
Long-term obligations under capital leases 110,948 110,965
Accrued claims costs 165,055 166,442
Employee benefits 240,722 236,131
Other liabilities and deferred credits 97,371 93,685
Deferred income taxes 76,775 76,734
Total Liabilities 2,089,600 2,027,726
SHAREHOLDERS' EQUITY
Preferred stock, no par value; authorized
5,000,000 shares:
Series B, 8.5% cumulative, convertible,
$.01 stated value; designated
1,100,000 shares; issued 949,982 and
954,412 shares, respectively 10 10
Additional paid-in capital, preferred stock 144,483 145,156
Deferred TASP compensation (113,501) (114,896)
Total Preferred Shareholders' Equity 30,992 30,270
Common stock, $.625 par value; authorized
100,000,000 shares; issued 51,505,502
and 51,451,490 shares, respectively 32,192 32,157
Additional paid-in capital, common stock 240,507 239,696
Cumulative translation adjustment (445) (2,028)
Retained earnings 597,751 608,399
Cost of repurchased common stock
(7,522,750 and 7,549,174 shares,
respectively) (185,483) (186,134)
Total Common Shareholders' Equity 684,522 692,090
Total Shareholders' Equity 715,514 722,360
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,805,114 $2,750,086
The accompanying notes are an integral part of these statements.
PAGE 5
CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(Dollars in thousands except per share amounts)
Three Months Ended
March 31,
1996 1995
REVENUES
CF MotorFreight $ 573,434 $ 608,425
Con-Way Transportation Services 301,841 274,890
Emery Worldwide 446,599 412,772
1,321,874 1,296,087
COSTS AND EXPENSES
CF MotorFreight
Operating Expenses 519,642 524,784
Selling and Administrative Expenses 58,546 56,827
Depreciation 16,473 16,691
594,661 598,302
Con-Way Transportation Services
Operating Expenses 232,777 203,540
Selling and Administrative Expenses 37,326 33,219
Depreciation 11,354 9,283
281,457 246,042
Emery Worldwide
Operating Expenses 365,703 339,175
Selling and Administrative Expenses 61,848 53,938
Depreciation 7,548 6,597
435,099 399,710
1,311,217 1,244,054
OPERATING INCOME (LOSS)
CF MotorFreight (21,227) 10,123
Con-Way Transportation Services 20,384 28,848
Emery Worldwide 11,500 13,062
10,657 52,033
OTHER INCOME (EXPENSE)
Investment income 78 125
Interest expense (9,904) (7,201)
Miscellaneous, net (288) (206)
(10,114) (7,282)
Income Before Income Taxes 543 44,751
Income Taxes 263 20,585
NET INCOME 280 24,166
Preferred Stock Dividends 2,134 4,324
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS $ (1,854) $ 19,842
Primary average shares outstanding (1) 43,952,397 44,217,465
PRIMARY EARNINGS (LOSS) PER SHARE $ (0.04) $ 0.50
FULLY DILUTED EARNINGS (LOSS) PER SHARE $ (0.04) $ 0.46
(1) The three months ended March 31, 1995 includes the dilutive effect
of stock options.
The accompanying notes are an integral part of these statements.
PAGE 6
CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
Three Months Ended
March 31,
1996 1995
(Dollars in thousands)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 86,345 $ 95,711
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 280 24,166
Adjustments to reconcile income
to net cash provided by operating
activities:
Depreciation and amortization 38,359 35,310
Increase in deferred income taxes 950 2,098
Gains from property disposals, net (457) (171)
Changes in assets and liabilities:
Receivables 43,213 (2,440)
Prepaid expenses (29,010) (27,391)
Accounts payable 10,559 9,753
Accrued claims costs 4,749 (2,278)
Income taxes (3,630) 14,884
Incentive compensation (9,301) (30,971)
Accrued liabilities and other 3,331 (14,289)
Net Cash Provided by Operating Activities 59,043 8,671
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (68,092) (56,541)
Proceeds from sales of property 2,511 825
Net Cash Used by Investing Activities (65,581) (55,716)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt and capital
lease obligations (2,267) (1,707)
Net borrowings under revolving line of credit 40,000 55,000
Proceeds from issuance of common stock 824 511
Payments of common dividends (4,396) (3,636)
Payments of preferred dividends (3,084) (5,318)
Net Cash Provided by Financing Activities 31,077 44,850
Increase (Decrease) in Cash and
Cash Equivalents 24,539 (2,195)
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 110,884 $ 93,516
The accompanying notes are an integral part of these statements.
PAGE 7
CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying consolidated financial statements of Consolidated
Freightways, Inc. and subsidiaries (the Company) have been prepared by the
Company, without audit by independent public accountants, pursuant to the
rules and regulations of the Securities and Exchange Commission. In the
opinion of management, the consolidated financial statements include all
normal recurring adjustments necessary to present fairly the information
required to be set forth therein. Certain information and note disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
from these statements pursuant to such rules and regulations and,
accordingly, should be read in conjunction with the consolidated financial
statements included in the Company's 1995 Annual Report to Shareholders.
There have been no significant changes in the accounting policies of
the Company. There were no significant changes in the Company's
commitments and contingencies as previously described in the 1995 Annual
Report to Shareholders and related annual report to the Securities and
Exchange Commission on Form 10-K.
2. The Company and its subsidiaries are defendants in various lawsuits
incidental to their businesses. It is the opinion of management that the
ultimate outcome of these actions will not have a material adverse effect
on the Company's consolidated financial position or results of operations.
CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's first quarter revenues increased 2% from the same quarter in
the prior year with growth at Con-Way Transportation Services (CTS) and
Emery Worldwide partially offset by lower revenues at CF MotorFreight
(CFMF). Revenues at CFMF remain depressed following the fourth quarter,
1995 implementation of changes to its freight flow system that disrupted
operations. CTS continued to benefit from its regional expansion while
Emery benefited from growth in both its domestic and international
operations. All three business units were affected by the harsh winter
storms.
Operating income declined 79.5% from the same quarter last year as a result
of continued operating losses at CFMF and lower operating income at CTS and
Emery. Increases in diesel and jet fuel prices adversely impacted operating
results at all three units. CFMF operating results were also adversely
affected by lowered productivity and under-utilization of capacity
following the implementation of changes to its freight flow system
described below.
PAGE 8
Other expense, net increased from the first quarter of 1995 due to
increased interest expense from the $100 million 10-year notes issued in
June 1995 and increased short-term bank borrowings.
Preferred stock dividends decreased as a result of the conversion of Series
C preferred stock to common stock in March of last year.
Significant variations in segment revenues and operating income are as
follows.
CF MOTORFREIGHT
CFMF first quarter revenues were down 5.8% from the comparable quarter in
1995 on a total tonnage decline of 9.6%. Less-than-truckload (LTL) tonnage
declined 8.7%. Partially mitigating the impact of the tonnage decline was
an increase in revenues from the operations of Menlo Logistics, which are
combined with CFMF for reporting purposes, and a partial retention of the
January 1, 1996 rate increase. Business levels at CFMF were adversely
affected by the October 1995 implementation of a freight flow improvement
plan called the Business Accelerator System (BAS). Implementation of BAS
disrupted freight service, resulting in customers withholding business from
CFMF. During 1996 CFMF's average transit time improved nearly a full day
from that prior to the implementation of BAS. The Company believes that
this improved service has contributed to a gradual increase in business
levels throughout the first quarter.
The operating loss for the quarter of $21.2 million represents a $31.3
million decline from the $10.1 million operating profit in the prior year
quarter. The operating loss is attributable to lower than expected system
utilization and productivity. The winter storms and increased fuel prices
also contributed to the operating loss. Management believes that its
efforts to restore business levels and system productivity contributed to
reduced operating losses each month of this quarter. Included in CFMF
quarterly operating results are the combined operating income of its
Canadian subsidiaries and Menlo Logistics of $3.6 million and $3.2 million
for first quarter 1996 and 1995, respectively.
The implementation of BAS has improved on-time performance and reduced
average transit times. Management efforts to increase productivity in dock
and city pickup and delivery operations have yielded improvements.
However, in the short-term, management expects to continue to incur
additional losses as system utilization remains below expected levels and
due to an approximate 3.5% contractual wage and benefit increase, effective
April 1, 1996. Accordingly, management efforts are focused on
regaining customer confidence and restoring business levels lost during
the implementation of BAS.
CON-WAY TRANSPORTATION SERVICES
CTS first quarter revenues increased 9.8% on a total tonnage increase of
4.5% from the comparable period in 1995. LTL tonnage increased 6.3% from
the first quarter of 1995. The revenue increase reflects the benefits of
CTS's geographic expansion and growth of its inter-regional business. CTS
was adversely affected by the winter storms and floods and the discounting
by competitors in the regional and inter-regional LTL markets.
PAGE 9
Operating income declined 29.3% compared with the first quarter of 1995 due
to higher fuel prices and costs associated with winter storms. Also
adversely affecting the first quarter of 1996 was under-utilization of
system capacity in new geographic regions and in inter-regional business.
Management will seek to improve operating margins by directing efforts
toward replacing unprofitable business with business that earns a higher
yield and improving system utilization in new markets with aggressive
marketing programs emphasizing a full complement of service offerings.
However, discounting is expected to continue industry wide into the
foreseeable future.
EMERY WORLDWIDE
Emery's first quarter revenues increased 8.2% over the comparable period
last year. Domestic revenues increased 6.7% on a tonnage gain of 10.4%
despite the strike at General Motors, a major Emery customer. International
revenues increased 9.5% on tonnage growth of 11.9% indicating softness in
the international market compared to the first quarter of 1995 when tonnage
increased 37.2%. The largest deteriorations in international revenues were
from imports into the US from Japan and Southeast Asia and in inter-
European business.
Operating income was down 12% due to declining rates of nearly 3% from the
same quarter last year. Higher fuel charges and costs associated with the
winter storms also lowered operating income. The elimination of excise
taxes in the first quarter of 1996 essentially offset the costs of the
harsh weather.
Emery's management is focused on expanding its share of the export freight
markets and on expanding market share in international and domestic
markets, with a broad assortment of service offerings. Furthermore,
management will seek to improve yields on low margin and unprofitable
business and reduce costs, system wide.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1996, the Company had $110.9 million in cash and cash
equivalents. Net cash flow from operations during the first three months of
1996 of $59.0 million was primarily the result of depreciation and
amortization and a reduction in customer receivables. Capital expenditures
for the three months ended March 31, 1996, were $68.1 million, an increase
of $11.6 million over the same period in 1995. Debt repayment and preferred
dividend requirements during the quarter were $5.3 million. The Company
borrowed $40 million under various bank lines to finance its obligations.
The Company intends to fund the remaining capital expenditure requirements
for the year with cash from operations supplemented by financing
arrangements.
At March 31, 1996, $116.7 million of letters of credit were outstanding
under the Company's $300 million unsecured credit facility. In addition,
$78.3 million of letters of credit were outstanding and secured with Emery
receivables under the $100 million Emery receivables sale facility. Also at
March 31, 1996, $40.4 million of letters of credit were outstanding under
several unsecured letter of credit facilities. Under the above facilities
PAGE 10
and other offered lines of credit, the Company has $180 million available for
additional borrowings and letter of credit needs.
OTHER
The Company's operations necessitate the storage of fuel in underground
tanks as well as the disposal of substances regulated by various federal
and state laws. The Company adheres to a stringent site-by-site tank
testing and maintenance program performed by qualified independent parties
to protect the environment and comply with regulations. Where clean-up is
necessary, the Company takes appropriate action.
Certain statements included herein constitute forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended, and are subject to a number of risks and uncertainties. In
that regard, the following factors, among others, could cause actual
results and other matters to differ materially from those in such
statements: changes in general business and economic conditions; increasing
domestic and international competition and pricing pressure; changes in
fuel prices; uncertainty regarding the Company's ability to improve results
of operations through, among other things, implementation of BAS at CFMF;
labor matters, including changes in labor costs, renegotiation of labor
contracts and the risk of work stoppages or strikes; changes in
governmental regulation; and environmental and tax matters. As a result of
the foregoing, no assurance can be given as to future results of operations
or financial condition.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
As previously reported, the Company has been designated a Potentially
Responsible Party by the Environmental Protection Agency with respect to
the disposal of hazardous substances at various sites. The Company expects
its share of the total cleanup costs of all sites will not have a material
adverse effect on its consolidated financial position or results of
operations. Certain legal matters are discussed in Note 2 in the Notes to
Consolidated Financial Statements in Part I of this form.
ITEM 4. Submission of Matter to a Vote of Security Holders
At the Annual Shareholders Meeting held April 29, 1996 the following
proposals were presented with the indicated voting results:
For the purpose of electing members of the Board of Directors, the
votes representing shares of Common and Preferred stock were cast as
follows:
Nominee For Withheld
Donald E. Moffitt 42,121,969 444,093
Ronald E. Poelman 42,065,026 501,036
Robert D. Rogers 42,143,607 422,455
William D. Walsh 42,130,058 436,004
PAGE 11
The following directors did not stand for election and continued in
office as a director after the Annual Shareholders Meeting: Robert Alpert,
Richard A. Clarke, Earl F. Cheit, G. Robert Evans, Margaret G. Gill, Robert
Jaunich II, Richard B. Madden, and Robert P. Wayman.
The appointment of Arthur Andersen LLP as independent public
accountants for the year 1996 was approved by the following vote: For
42,089,174; Against 229,663; Abstaining 247,225.
The stockholder proposal to declassify the Board of Directors for the
purpose of Director elections was defeated by the following votes: For
14,972,429; Against 21,762,242; Abstaining 1,066,323; Broker non-votes
4,765,068.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10.1) Consolidated Freightways, Inc. Executive Incentive Plan
for 1996.
(10.2) Leland James Service Corporation - CFI Executive
Incentive Plan for 1996.
(10.3) CF MotorFreight Executive Incentive Plan for 1996.
(10.4) Con-Way Transportation Services, Inc. Incentive Plan for
1996.
(10.5) Emery Worldwide Incentive Plan for 1996.
(11) Computation of Per Share Earnings
(12) Computation of Ratios of Earnings to Fixed Charges
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
March 31, 1996.
PAGE 12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company (Registrant) has duly caused this Form
10-Q Quarterly Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Consolidated Freightways, Inc.
(Registrant)
May 14, 1996 /s/Gregory L. Quesnel
Gregory L. Quesnel
Executive Vice President and
Chief Financial Officer
May 14, 1996 /s/Gary D. Taliaferro
Gary D. Taliaferro
Vice President and Controller
Exhibit 10.1
CONSOLIDATED FREIGHTWAYS, INC.
EXECUTIVE INCENTIVE PLAN FOR 1996
THE PLAN
In order to motivate certain of its employees more effectively and
efficiently, Consolidated Freightways, Inc. (CF, Inc.) establishes an
Incentive Plan (Plan) under which payments will be made to eligible
executive personnel out of calendar year 1996 Incentive Profits.
DESIGNATION OF PARTICIPANTS
Participants in this Plan shall be all full-time executive
personnel of CF, Inc. A master list of all Plan participants will be
maintained in the office of the Chief Executive Officer of CF, Inc.
ELIGIBILITY FOR PAYMENT
Participants will commence participation at the beginning of the
first full calendar quarter following becoming eligible. Calendar
quarters begin January 1, April 1, July 1, and October 1 or the first
working day thereafter. An employee who commences participation in
the 1996 Plan during the 1996 Plan year, and who participates less
than four full quarters, will receive a pro rata payment based on the
number of full calendar quarters of Plan participation.
Subject to the following exceptions, no person shall receive any
payment under this Plan unless on the date that the payment is
actually made that person is then currently (i) employed by
Consolidated Freightways, Inc. or any of its subsidiaries and (ii) a
Plan participant.
EXCEPTION 1. A Plan participant who is employed by CF, Inc. or
any of its subsidiaries through December 31, 1996 but leaves that
employment or otherwise becomes ineligible after December 31, 1996
but before the final payment is made relating to 1996, unless
terminated for cause, shall be entitled to receive payments under
this Plan resulting from 1996 Incentive Profits.
EXCEPTION 2. An appropriate pro rata payment will be made (1) to
a Plan participant who retires prior to December 31, 1996 pursuant to
the Consolidated Freightways, Inc. Retirement Plan or to the
provisions of the Social Security Act and who, at the time of
retirement, was an eligible participant in this Plan, (2) to the
heirs, legatees, administrators or executors of a Plan participant
who dies prior to December 31, 1996 and who, at the time of death,
was an eligible participant in this Plan, (3) to an eligible Plan
participant who is placed on an approved Medical, Sabbatical, or
Military Leave of Absence prior to December 31, 1996, or (4) to an
eligible Plan participant who is transferred to another subsidiary of
CF, Inc. and who remains an employee through December 31, 1996.
METHOD OF PAYMENT
Each Plan participant will be assigned an incentive participation
factor as a percent of annual compensation. The Incentive
Participation Factor may be further allocated to specific performance
goals for each participant. Profit goals will be partitioned between
CF MotorFreight (25%) and all other CF components (75%).
Incentive compensation for the assigned goals will be earned on a
pro rata basis for accomplishments between the Minimum level and the
Incentive Factor Goals and will continue to be earned ratably for
performance over the Incentive Factor Goals.
No incentive will be earned by a participant until the respective
Minimum Profit Goals are achieved. Incentive earned from the
achievement of Performance Goals other than profit will be restricted
to the extent that post ICP profit cannot fall below the Minimum
Profit Goal. There is a maximum percent of accomplishment for any
performance goal of 200%.
PERSONAL DATA SHEET
A "Personal Data Sheet" for calculation of incentive earnings will
be prepared for each Plan participant which designates (1) the unit
to which the participant is assigned, (2) his assigned incentive
participation factor, (3) the minimum level of achievement required
for each assigned goal, (4) the incentive factor level of achievement
for each assigned goal, and (5) the incentive earnings at the
incentive factor level for each assigned goal.
DATE OF PAYMENT
The Chief Executive Officer of CF, Inc. may authorize a partial
payment of the estimated annual earned incentive, in December, 1996.
The final payment to eligible participants, less any previous partial
payment, will be made on or before March 15, 1997.
INCENTIVE PROFIT
Incentive Profit is defined as earnings before deducting any
amounts expensed under any CF, Inc. and qualified LJSC incentive
plans and before deducting income taxes.
ANNUAL COMPENSATION
Annual Compensation for incentive purposes for each Plan
participant is his annualized salary before any incentive or other
special compensation as of the first pay period following the date
the participant becomes eligible to participate in this Plan. The
term "special compensation" used herein does not include deferred
salary arrangements wherein the participant could have chosen to
receive the deferred salary in the Plan year.
MAXIMUM PAYMENT
Payments under this Plan are limited to double each participant's
Participation Factor.
LAWS GOVERNING PAYMENTS
No payment shall be made under this Plan in an amount which is
prohibited by law.
AMENDMENT, SUSPENSION, AND ADMINISTRATION OF PLAN
The Board of Directors of CF, Inc. may at any time amend, suspend,
or terminate the operation of this Plan, by thirty-day written notice
to the Plan participants, and will have full discretion as to the
administration and interpretation of this Plan. No participant in
this Plan shall at any time have any right to receive any payment
under this Plan until such time, if any, as any payment is actually
made.
DURATION OF PLAN
This Plan is for the calendar year 1996 only.
Exhibit 10.2
LELAND JAMES SERVICE CORPORATION - CFI
EXECUTIVE INCENTIVE PLAN FOR 1996
THE PLAN
In order to motivate certain employees of Leland James Service
Corporation (LJSC) more effectively and efficiently, The Company
(LJSC) establishes an Incentive Plan (Plan) under which payments will
be made to eligible executive personnel of LJSC out of calendar year
1996 Incentive Profits.
DESIGNATION OF PARTICIPANTS
Participants in this Plan shall be all full-time executive
personnel of LJSC. A master list of all Plan participants will be
maintained in the office of the President of LJSC.
ELIGIBILITY FOR PAYMENT
Participants will commence participation at the beginning of
the first full calendar quarter following becoming eligible. Calendar
quarters begin January 1, April 1, July 1, and October 1 or the first
working day thereafter. An employee who commences participation in
the 1996 Plan during the 1996 Plan year, and who participates less
than four full quarters, will receive a pro rata payment based on the
number of full calendar quarters of Plan participation.
Subject to the following exceptions, no person shall receive
any payment under this Plan unless on the date that the payment is
actually made that person is then currently (i) employed by LJSC and
(ii) a Plan participant.
EXCEPTION 1. A Plan participant who is employed by LJSC
through December 31, 1996 but leaves that employment or otherwise
becomes ineligible after December 31, 1996 but before the final
payment is made relating to 1996, unless terminated for cause, shall
be entitled to receive payments under this Plan resulting from 1996
Incentive Profits.
EXCEPTION 2. An appropriate pro rata payment will be made
(1) to a Plan participant who retires prior to December 31, 1996
pursuant to the Consolidated Freightways, Inc. Retirement Plan or to
the provisions of the Social Security Act and who, at the time of
retirement, was an eligible participant in this Plan, (2) to the
heirs, legatees, administrators or executors of a Plan participant
who dies prior to December 31, 1996 and who, at the time of death,
was an eligible participant in this Plan, (3) to an eligible Plan
participant who is placed on an approved Medical, Sabbatical, or
Military Leave of Absence prior to December 31, 1996, or (4) to an
eligible Plan participant who is transferred to another subsidiary of
CF, Inc. and who remains an employee through December 31, 1996.
METHOD OF PAYMENT
Each Plan participant will be assigned an incentive
participation factor as a percent of annual compensation. The
Incentive Participation Factor may be further allocated to specific
performance goals for each participant. Profit goals will be
partitioned between CF MotorFreight (25%) and all other CF components
(75%).
Incentive compensation for the assigned goals will be earned on
a pro rata basis for accomplishments between the Minimum level and
the Incentive Factor Goals and will continue to be earned ratably for
performance over the Incentive Factor Goals.
No incentive will be earned by a participant until the
respective Minimum Profit Goals are achieved. Incentive earned from
the achievement of Performance Goals other than profit will be
restricted to the extent that post ICP profit cannot fall below the
Minimum Profit Goal. There is a maximum percent of accomplishment for
any performance goal of 200%.
PERSONAL DATA SHEET
A "Personal Data Sheet" for calculation of incentive earnings
will be prepared for each Plan participant which designates (1) the
unit to which the participant is assigned, (2) his assigned incentive
participation factor, (3) the minimum level of achievement required
for each assigned goal, (4) the incentive factor level of achievement
for each assigned goal, and (5) the incentive earnings at the
incentive factor level for each assigned goal.
DATE OF PAYMENT
The President of LJSC may authorize a partial payment of the
estimated annual earned incentive, in December, 1996. The final
payment to eligible participants, less any previous partial payment,
will be made on or before March 15, 1997.
INCENTIVE PROFIT
Incentive Profit is defined as earnings before deducting any
amounts expensed under any CF, Inc. and qualified LJSC incentive
plans and before deducting income taxes.
ANNUAL COMPENSATION
Annual Compensation for incentive purposes for each Plan
participant is his annualized salary before any incentive or other
special compensation as of the first pay period following the date
the participant becomes eligible to participate in this Plan. The
term "special compensation" used herein does not include deferred
salary arrangements wherein the participant could have chosen to
receive the deferred salary in the Plan year.
MAXIMUM PAYMENT
Payments under this Plan are limited to double each
participant's Participation Factor.
LAWS GOVERNING PAYMENTS
No payment shall be made under this Plan in an amount which is
prohibited by law.
AMENDMENT, SUSPENSION, AND ADMINISTRATION OF PLAN
The Board of Directors of LJSC may at any time amend, suspend,
or terminate the operation of this Plan, by thirty-day written notice
to the Plan participants, and will have full discretion as to the
administration and interpretation of this Plan. No participant in
this Plan shall at any time have any right to receive any payment
under this Plan until such time, if any, as any payment is actually
made.
DURATION OF PLAN
This Plan is for the calendar year 1996 only.
Exhibit 10.3
CF MOTORFREIGHT
EXECUTIVE INCENTIVE PLAN FOR 1996
THE PLAN
In order to motivate certain employees of CF MotorFreight (CFMF)
more effectively and efficiently, Consolidated Freightways
Corporation of Delaware (CFCD) establishes an Incentive Plan (Plan)
under which payments will be made to designated eligible executive
personnel out of calendar year CFMF 1996 Incentive Profits.
DESIGNATION OF PARTICIPANTS
Participants in this Plan shall be designated full-time executive
personnel of CFMF. A master list of all Plan participants will be
maintained in the office of the President of CFCD.
ELIGIBILITY FOR PAYMENT
Participants will commence participation at the beginning of the
first full calendar quarter following becoming eligible. Calendar
quarters begin January 1, April 1, July 1, and October 1 or the first
working day thereafter. An employee who commences participation in
the 1996 Plan during the 1996 Plan year, and who participates less
than four full quarters, will receive a pro rata payment based on the
number of full calendar quarters of Plan participation.
Subject to the following exceptions, no person shall receive any
payment under this Plan unless on the date that the payment is
actually made that person is then currently (i) employed by CFCD or
any of its subsidiaries and (ii) a Plan participant.
EXCEPTION 1. A Plan participant who is employed by CFCD through
December 31, 1996 but leaves that employment or otherwise becomes
ineligible after December 31, 1996 but before the final payment is
made relating to 1996, unless terminated for cause, shall be entitled
to receive payments under this Plan resulting from 1996 Incentive
Profits.
EXCEPTION 2. An appropriate pro rata payment will be made (1) to
a Plan participant who retires prior to December 31, 1996 pursuant to
the Consolidated Freightways, Inc. Retirement Plan or to the
provisions of the Social Security Act and who, at the time of
retirement, was an eligible participant in this Plan, (2) to the
heirs, legatees, administrators or executors of a Plan participant
who dies prior to December 31, 1996 and who, at the time of death,
was an eligible participant in this Plan, (3) to an eligible Plan
participant who is placed on an approved Medical, Sabbatical, or
Military Leave of Absence prior to December 31, 1996, or (4) to an
eligible Plan participant who is transferred to another subsidiary of
CF, Inc. and who remains an employee through December 31, 1996.
METHOD OF PAYMENT
Each Plan participant will be assigned an incentive participation
factor as a percent of annual compensation. Each Plan participant
will also be assigned to a CFMF operating unit (service center,
division, total company, etc.) to earn incentive. The participation
factor may be further indexed to specific performance goals such as
revenue, profit, service, etc.
Incentive for assigned goals will be earned on a pro rata basis
for accomplishment between the Minimum Level and the Incentive Factor
Goal. Once incentive earnings exceed the Incentive Factor Goal,
incentive compensation will be earned ratably at 50% of the previous
level.
No incentive will be earned by a participant until CFMF has
achieved its Minimum Profit Goal. Actual incentive payout is subject
to the ICP pool. Incentive Compensation will be adjusted
proportionately to the amount in the ICP pool.
PERSONAL DATA SHEET
A "Personal Data Sheet" for calculation of incentive earnings will
be prepared for each Plan participant which designates (1) the unit
to which the participant is assigned, (2) his profit sharing
percentage, (3) the minimum level of achievement required for each
assigned goal, (4) the incentive factor level of achievement for each
assigned goal, and (5) the incentive earnings at the incentive factor
level for each assigned goal.
DATE OF PAYMENT
The President of CFCD may authorize a partial payment of the
estimated annual earned incentive, in December, 1996. The final
payment to eligible participants, less any previous partial payment,
will be made on or before March 15, 1997.
INCENTIVE PROFIT
Incentive Profit is defined as the operating earnings of CF
MotorFreight before deducting any amounts expensed under this or any
similar incentive or bonus plan, before deducting interest expense
and other non-operating expenses, before adding interest income, and
before deducting income taxes.
ANNUAL COMPENSATION
Annual Compensation for incentive purposes for each Plan
participant is his annualized salary or hourly base pay before any
incentive, overtime, or other special compensation as of the first
pay period following the date the participant becomes eligible to
participate in this Plan.
MAXIMUM PAYMENT
Payments under this Plan are limited to double each participant's
participation factor.
LAWS GOVERNING PAYMENTS
No payment shall be made under this Plan in an amount which is
prohibited by law.
AMENDMENT, SUSPENSION, AND ADMINISTRATION OF PLAN
The Board of Directors of CFCD may at any time amend, suspend, or
terminate the operation of this Plan, by thirty-day written notice to
the Plan participants, and will have full discretion as to the
administration and interpretation of this Plan. No participant in
this Plan shall at any time have any right to receive any payment
under this Plan until such time, if any, as any payment is actually
made.
DURATION OF PLAN
This Plan is for the calendar year 1996 only.
Exhibit 10.4
CON-WAY TRANSPORTATION SERVICES, INC.
INCENTIVE PLAN FOR 1996
THE PLAN
In order to motivate certain of its employees more effectively and
efficiently, Con-Way Transportation Services, Inc. (CTS) establishes
an Incentive Plan (Plan) under which payments will be made to
eligible managerial personnel out of calendar year 1996 Incentive
Profits.
DESIGNATION OF PARTICIPANTS
Participants in the Plan shall be designated full-time managerial
personnel of CTS Administration. A master list of Plan participants
will be maintained in the office of the President of CTS.
ELIGIBILITY FOR PARTICIPATION
Participants will commence participation at the beginning of the
first full calendar quarter following becoming eligible. Calendar
quarters begin January 1, April 1, July 1, and October 1 or the first
working day thereafter. An employee who commences participation in
the 1996 Plan during the 1996 Plan year, and who participates less
than four full quarters, will receive a pro rata payment based on the
number of full calendar quarters of Plan participation.
Subject to the following exceptions, no person shall receive any
payment under this Plan unless on the date that the payment is
actually made that person is then currently (i) employed by CTS or
any of its subsidiaries and (ii) a Plan participant.
EXCEPTION 1. A Plan participant who is employed by CTS or any of
its subsidiaries through December 31, 1996 but leaves that employment
or otherwise becomes ineligible after December 31, 1996 but
before the final payment is made relating to 1996, unless terminated
for cause, shall be entitled to receive payments under this Plan
resulting from 1996 Incentive Profits.
EXCEPTION 2. An appropriate pro rata payment will be made (1) to
a Plan participant who retires prior to December 31, 1996 pursuant to
the Consolidated Freightways, Inc. Retirement Plan or to the
provisions of the Social Security Act and who, at the time of
retirement, was an eligible participant in this Plan, (2) to the
heirs, legatees, administrators or executors of a Plan participant
who dies prior to December 31, 1996 and who, at the time of death,
was an eligible participant in this Plan, (3) to an eligible Plan
participant who is placed on an approved Medical, Sabbatical, or
Military Leave of Absence prior to December 31, 1996, or (4) to an
eligible Plan participant who is transferred to another subsidiary of
Consolidated Freightways, Inc. and who remains an employee through
December 31, 1996.
METHOD OF PAYMENT
Each Plan participant will be assigned an incentive participation
factor as a percent of Annual Compensation in accordance with the
enclosed Personal Data Sheet. The incentive participation factor will
be allocated 85% to the assigned profit goal and 15% to the assigned
accounts receivable goal.
Incentive for assigned goals will be earned on a pro rata basis
for accomplishment between the Minimum level and the Incentive Factor
Goal. Incentive earnings over the Incentive Factor Goal will continue
to earn at the same pro rata relationship that exists between minimum
level and factor goal.
No incentive will be earned by a participant until CTS has
achieved its Minimum Profit Goal. Incentive earned from the
achievement of Performance Goals will be restricted to the extent
that post ICP earnings cannot fall below the Minimum Profit Goal.
The maximum percent of accomplishment for any goal is 200%.
PERSONAL DATA SHEET
A "Personal Data Sheet" for calculation of incentive earnings will
be prepared for each Plan participant which designates (1) the unit
to which the participant is assigned, (2) his assigned incentive
participation factor, (3) the minimum level of achievement required
for each assigned goal, (4) the incentive factor level of achievement
for each assigned goal, and (5) the incentive earnings at the
incentive factor level for each assigned goal.
DATE OF PAYMENT
The President of CTS may authorize a partial payment of the
estimated annual earned incentive, in December 1996. The final
payment to eligible participants, less any previous partial payment,
will be made on or before March 15, 1997.
INCENTIVE PROFIT
Incentive profit is defined as the consolidated earnings of all of
the companies comprising CTS, before deducting any amounts expensed
under this or any similar incentive or bonus plan and before
deducting income taxes and excluding interest income and expense.
ANNUAL COMPENSATION
Annual Compensation for incentive purposes for each Plan
participant is his annualized salary or hourly base pay before any
incentive, overtime, or other special compensation as of the first
pay period following the date the participant becomes eligible to
participate in this Plan.
MAXIMUM PAYMENT
Payments under this Plan are limited to double each participant's
Participation Factor.
LAWS GOVERNING PAYMENTS
No payment shall be made under this Plan in an amount which is
prohibited by law.
AMENDMENT, SUSPENSION, AND ADMINISTRATION OF PLAN
The Board of Directors of CTS may at any time amend, suspend, or
terminate the operation of this Plan, by thirty-day written notice to
the Plan participants, and will have full discretion as to the
administration and interpretation of this Plan. No participant in
this Plan shall at any time have any right to receive any payment
under this Plan until such time, if any, as the payment is actually
made.
DURATION OF PLAN
This Plan is for the calendar year 1996 only.
Exhibit 10.5
EMERY WORLDWIDE
INCENTIVE PLAN FOR 1996
THE PLAN
In order to motivate certain employees more effectively and
efficiently, Emery Worldwide (EWW) establishes an Incentive Plan
(Plan) under which payments will be made to designated participants
out of calendar year 1996 Incentive Profits.
DESIGNATION OF PARTICIPANTS
Participants in the Plan shall be all supervisory, managerial, and
regular full-time and part-time non-contractual (time-sheet)
personnel of EWW. A master list of Plan participants will be
maintained in the office of the President of EWW.
ELIGIBILITY FOR PARTICIPATION
Participants will commence participation at the beginning of the
first full calendar quarter following becoming eligible. Calendar
quarters begin January 1, April 1, July 1 and October 1 or the first
working day thereafter. An employee who commences participation in
the 1996 Plan during the 1996 Plan year, and who participates less
than four full quarters, will receive a pro rata payment based on the
number of full calendar quarters of Plan participation.
Subject to the following exceptions, no person shall receive any
payment under this Plan unless on the date that the payment is
actually made that person is then currently (i) employed by EWW or
any of its subsidiaries and (ii) a Plan participant.
EXCEPTION 1. A Plan participant who is employed by EWW through
December 31, 1996 but leaves that employment or otherwise becomes
ineligible after December 31, 1996 but before the final payment is
made relating to 1996, unless terminated for cause, is entitled to
receive payments under this Plan resulting from 1996 Incentive
Profits.
EXCEPTION 2. An appropriate pro rata payment will be made (1) to
a Plan participant who retires prior to December 31, 1996 pursuant to
the Consolidated Freightways, Inc. Retirement Plan, The Purolator
Courier Corporation Hourly Employee Pension Plan or to the provisions
of the Social Security Act and who, at the time of retirement, was an
eligible participant in this Plan, (ii) to the heirs, legatees,
administrators or executors of a Plan participant who dies prior to
December 31, 1996 and who, at the time of death, was an eligible
participant in this Plan, (iii) to an eligible
Plan participant who is placed on approved Medical, Sabbatical,
or Military Leave of Absence prior to December 31, 1996, or (iv) to
an eligible Plan participant who is transferred to another
subsidiary of Consolidated Freightways, Inc. and who remains an
employee through December 31, 1996.
METHOD OF PAYMENT
Each Plan participant will be assigned an incentive participation
factor as a percent of annual compensation. The President of Emery
will assign each Plan participant to an operating unit (service
center, division, total company, etc.) to earn incentive. The
participation factor may be further indexed to specific performance
goals such as revenue, profit, service, etc.
Incentive compensation will be paid from an ICP pool earned
ratably between the Minimum and Incentive Factor Profit Goals and
will continue to be earned ratably over the Incentive Factor Goal.
Incentive Factor Plan Goals and minimum levels of accomplishment will
be established for all performance goals.
No incentive will be earned by a participant until the system
Minimum Profit Goal is achieved. Actual incentive payout is subject
to the ICP pool. Incentive Compensation will be adjusted
proportionately to the amount in the ICP pool, thus actual system
incentive payout for all goals other than Accounts Receivable can
never surpass the percent of accomplishment for system profit.
Company profit contributions will be paid first and other
participation factors thereafter.
Incentive earned from the achievement of the Accounts Receivable
Performance Goal will be restricted to the extent that post ICP
earnings cannot fall below the Minimum Profit Goal. There is a
maximum percent of accomplishment for any performance goal of 200%.
PERSONAL DATA SHEET
A "Personal Data Sheet" for calculation of incentive earnings will
be prepared for each Plan participant which designates (1) the unit
to which the participant is assigned, (2) his assigned incentive
participation factor and the allocation of that factor to specific
Performance Goals, (3) the minimum level of achievement required for
each assigned goal, (4) the incentive factor level of achievement for
each assigned goal, and (5) the incentive earnings at the incentive
factor level for each assigned goal.
DATE OF PAYMENT
The President of EWW may authorize a partial payment of the
estimated annual earned incentive, in December 1996. The final
payment to eligible participants, less any previous partial payment,
will be made on or before March 15, 1997.
INCENTIVE PROFIT
Incentive Profit is defined as the earnings of Emery Worldwide,
Emery Custom Brokers, Emery Ocean Services, Emery Global Logistics,
Emery Expedite and Emery Worldwide Airlines before deducting any
amounts expensed under this or any similar incentive or bonus plan
and before deducting income taxes and excluding interest income and
expense.
ANNUAL COMPENSATION
Annual Compensation for incentive purposes for each Plan
participant is his annual earnings for 1996 before any incentive or
bonus payments earned during the period of Plan participation
eligibility.
MAXIMUM PAYMENT
Payments under this plan are limited to double each participant's
Participation Factor.
LAWS GOVERNING PAYMENTS
No payment shall be made under this Plan in an amount which is
prohibited by law.
AMENDMENT, SUSPENSION, AND ADMINISTRATION OF PLAN
The Board of Directors of EWW may at any time amend, suspend, or
terminate the operation of this Plan, by thirty-day written notice to
the Plan participants, and will have full discretion as to the
administration and interpretation of this Plan. No participant in
this Plan shall at any time have any right to receive any payment
under this Plan until such time, if any, as any payment is actually
made.
DURATION OF PLAN
This Plan is for the calendar year 1996 only.
Exhibit 11
CONSOLIDATED FREIGHTWAYS, INC.
COMPUTATION OF PER SHARE EARNINGS
The following is the computation of fully diluted earnings per share:
Three Months Ended
March 31
1996 1995
(Dollars in thousands except
per share data)
Net income (loss) applicable
to common shareholders $ (1,854) $ 19,842
Non-discretionary adjustments under
the if-converted method:
Addback: Series C, preferred dividends - 2,207
Addback: Series B, preferred dividends,
net of tax benefits 2,134 2,117
Less: Replacement of funding
adjustment, net of tax benefits (1) (1,668) (1,664)
Net income (loss) applicable
to common shareholders $ (1,388) $ 22,502
WEIGHTED AVERAGE SHARES OUTSTANDING:
Common shares 43,952,397 43,274,729
Equivalents - stock options 990,587 1,244,429
Series B, Preferred stock
if-converted method 4,194,726 4,142,418
49,137,710 48,661,576
FULLY DILUTED EARNINGS PER SHARE (2) $ (0.03) $ 0.46
(1) Additional payment to the Company's Thrift and Stock Plan to replace
the funding lost under the if-converted method.
(2) Fully diluted loss per share was reported at $(.04) per share on
the Statement of Consolidated Operations for the three months
ended March 31, 1996, as this computation indicates that the
items included under the if-converted method were anti-dilutive.
<TABLE>
<CAPTION>
Exhibit 12
CONSOLIDATED FREIGHTWAYS, INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
Three Months Ended
March 31, Year Ended December 31,
1996 1995 1995 1994 1993 1992 1991
(Dollars in thousands)
<S>
Fixed Charges: <C> <C> <C> <C> <C> <C> <C>
Interest Expense $ 9,904 $ 7,201 $ 34,325 $ 27,945 $ 30,333 $ 38,893 $ 46,703
Capitalized Interest 539 175 1,092 1,042 1,224 543 1,703
Preferred Dividends 3,160 3,206 12,419 12,475 12,551 12,618 12,691
Total Interest 13,603 10,582 47,836 41,462 44,108 52,054 61,097
Interest Component of
Rental Expense 18,091 17,740 73,004 62,304 57,585 55,773 58,052
Total Fixed Charges 31,694 28,322 120,840 103,766 101,693 107,827 119,149
Less:
Capitalized Interest 539 175 1,092 1,042 1,224 543 1,703
Preferred Dividends 3,160 3,206 12,419 12,475 12,551 12,618 12,691
Net Fixed Charges $ 27,995 $ 24,941 $ 107,329 $ 90,249 $ 87,918 $ 94,666 $ 104,755
Earnings:
Income (Loss)
Before Income Taxes $ 543 $ 44,751 $ 110,873 $ 111,920 $ 91,441 $ (10,733) $ (43,337)
Add: Net Fixed
Charges 27,995 24,941 107,329 90,249 87,918 94,666 104,755
Total Earnings $ 28,538 $ 69,692 $ 218,202 $ 202,169 $ 179,359 $ 83,933 $ 61,418
Ratio of Earnings to
Fixed Charges:
Total Earnings $ 28,538 $ 69,692 $ 218,202 $ 202,169 $ 179,359 $ 83,933 $ 61,418
Fixed Charges (1) 31,694 28,322 120,840 103,766 101,693 107,827 119,149
Ratio 0.9 x(2) 2.5 x 1.8 x 1.9 x 1.8 x 0.8 x(2) 0.5 x(2)
<FN>
(1) Fixed Charges represent interest on capital leases and short-term and long-term debt, capitalized interest,
dividends on shares of the Series B Cumulative Convertible Preferred Stock used to pay debt service on notes
issued by the Company's Thrift and Stock Plan and the applicable portion of the consolidated rent expense
which approximates the interest portion of lease payments.
(2) Earnings were inadequate to cover fixed charges for the periods shown; the deficiency was $3.2 million for the
three months ended March 31, 1996 and $23.9 million and $57.7 million for the years ended December 31, 1992 and 1991,
respectively.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 110,884
<SECURITIES> 0
<RECEIVABLES> 757,733
<ALLOWANCES> (24,881)
<INVENTORY> 44,038
<CURRENT-ASSETS> 1,160,048
<PP&E> 2,238,787
<DEPRECIATION> (1,132,256)
<TOTAL-ASSETS> 2,805,114
<CURRENT-LIABILITIES> 1,017,304
<BONDS> 492,373
<COMMON> 272,699
0
144,493
<OTHER-SE> 298,322
<TOTAL-LIABILITY-AND-EQUITY> 2,805,114
<SALES> 0
<TOTAL-REVENUES> 1,321,874
<CGS> 0
<TOTAL-COSTS> 1,311,217
<OTHER-EXPENSES> 10,114
<LOSS-PROVISION> 3,059
<INTEREST-EXPENSE> 9,904
<INCOME-PRETAX> 543
<INCOME-TAX> 263
<INCOME-CONTINUING> 280
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,854)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
