FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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, 1995.
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 No. 0-10894.
ARNOLD INDUSTRIES, INC.
(Exact name of registrant as specified in its
charter)
Pennsylvania 23-2200465
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification
No.)
625 South Fifth Avenue, Lebanon, Pennsylvania
(Address of principal executive offices)
17042
(Zip Code)
(717) 274-2521
(Registrant's telephone number, including area code)
No Change
(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 X No
Common Stock, par value $1.00 per share: 26,634,054 shares
outstanding as of May 11, 1995.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Condensed Consolidated Balance Sheets - March 31, 1995
(Unaudited) and
December 31, 1994
Condensed Consolidated Statements of
Income (Three Month
Period - Unaudited) - March 31, 1995 and 1994
Condensed Consolidated Statements of
Cash Flows (Three Month
Period - Unaudited) - March 31, 1995 and 1994
Notes to Condensed Consolidated Financial Statements
<TABLE>
<CAPTION>
ARNOLD INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
1995 1994
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents 12,869,098 23,554,745
Marketable Securities 16,562,351 18,088,238
Accounts Receivable, Net 31,304,159 28,557,503
Deferred Income Taxes 3,877,175 4,110,806
Prepaid Expenses and Supplies 5,254,470 4,357,441
Total Current Assets 69,867,253 78,668,733
Property and Equipment 280,743,025 261,567,562
Less: Accumulated Depreciation 94,612,234 91,964,289
Total Property and Equipment 186,130,791 169,603,273
Other Assets
Goodwill 9,508,259 8,787,601
Investments in Limited Partnerships 3,752,651 2,237,183
Other 972,734 982,295
Total Other Assets 14,233,644 12,007,079
TOTAL ASSETS 270,231,688 260,279,085
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes Payable 27,989,073 27,989,073
Accounts Payable 8,628,123 9,755,914
Income Taxes 2,956,061 1,540,523
Estimated Liability for Claims 6,324,626 5,359,288
Accrued Expenses - Other 11,294,302 9,185,437
Total Current Liabilities 57,192,185 53,830,235
Long-Term Liabilities
Estimated Liability for Claims 9,768,951 9,768,951
Deferred Income Taxes 19,919,061 18,946,962
Other 1,310,680 1,275,580
Total Long-Term Liabilities 30,998,692 29,991,493
Stockholders' Equity
Common Stock 29,942,628 29,942,628
Paid-In Capital 75,933 75,283
Retained Earnings 161,038,508 155,458,904
Treasury Stock - At Cost (9,016,258) (9,019,458)
Total Stockholders' Equity 182,040,811 176,457,357
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 270,231,688 260,279,085
THE ACCOMPANYING NOTES, HERE AND FOLLOWING, ARE AN INTEGRAL PART
OF THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
ARNOLD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
1995 1994
<S> <C> <C>
Operating Revenues 83,416,865 75,029,365
Operating Expenses 69,998,978 63,117,054
Operating Income 13,417,887 11,912,311
Interest Expense (438,747) (251,712)
Other Income 447,996 229,801
Income Before Income Taxes 13,427,136 11,890,400
Income Taxes 4,918,205 4,469,127
Net Income 8,508,931 7,421,273
Weighted Average Shares Outstanding <FN1> 26,630,071 26,601,994
Net Income per Common Share <FN1> .32 .28
Dividends per Common Share .11 .10
<FN>
<F1>
NOTE: Common share equivalents are not included since the
effect of their inclusion is not material.
</FN>
THE ACCOMPANYING NOTES, HERE AND FOLLOWING, ARE AN INTEGRAL PART
OF THESE CONDENSED FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
ARNOLD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
1995 1994
<S> <C> <C>
Operating Activities
Net Income 8,508,931 7,421,273
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 6,017,436 4,852,285
Provision for Deferred Taxes 1,205,730 1,225,027
Other (702,052) (92,166)
Changes in Operating Assets and
Liabilities:
(Increase) in Accounts Receivable (2,746,656) (2,547,495)
(Increase) in Prepaid Expenses
and Supplies (897,029) (449,629)
Increase in Accounts Payable
and Accrued Expenses 3,361,950 6,114,659
Other 35,100 20,968
Net Cash Provided by Operating
Activities 14,783,410 16,544,922
Investing Activities
Proceeds from Sale of Investment
Securities 2,205,486 8,678,128
Purchase of Investment Securities (505,938) (4,937,969)
Proceeds from Disposition of Property
and Equipment 2,455,547 707,820
Purchase of Property and Equipment (24,355,871) (9,355,066)
Other (2,342,804) (848,766)
Net Cash Used In Investing
Activities (22,543,580) (5,755,853)
Financing Activities
Cash Dividends Paid (2,929,327) (2,660,315)
Principal Payments on Mortgages
and Other Debt -0- (51,776)
Other 3,850 16,050
Net Cash Used In Financing
Activities (2,925,477) (2,696,041)
Increase (Decrease) in Cash and Cash
Equivalents (10,685,647) 8,093,028
Cash and Cash Equivalents at Beginning
of Year 23,554,745 9,311,798
Cash and Cash Equivalents at End of
Period 12,869,098 17,404,826
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest 481,062 272,574
Income Taxes 2,304,738 2,620,454
THE ACCOMPANYING NOTES, HERE AND FOLLOWING, ARE AN INTEGRAL PART
OF THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
ARNOLD INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1: Basis of Presentation
The financial information included herein is unaudited;
however, such information reflects all adjustments (consisting
solely of normal adjustments) which are, in the opinion of
management, necessary for a fair statement of results for the
interim period. This financial information should be read in
conjunction with the Financial Statements and Notes thereto
included in the Company's latest annual report on Form 10-K.
The results of operations for the three-month period ending
March 31, 1995 and 1994 are not necessarily indicative of the
results to be expected for the full year.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Operating Revenues for the first quarter of 1995 were
$83,416,865, an increase of $8,387,500 or 11% over Operating
Revenues for 1994's first quarter. For the same periods, Operat-
ing Expenses increased $6,881,924 or 11%; Income before Income
Taxes increased $1,536,736, an increase of 13%, and Net Income
increased $1,087,658, or 15%. Earnings Per Share increased to
$.32 for the first quarter of 1995 from $.28 for the first
quarter of 1994, a 14% increase.
Gains reflected in the Company's revenue figures for the
first quarter of 1995 as compared to the first quarter of 1994
are attributable to an increase in business volume at the Arnold
Logistics companies, Lebarnold, Inc. ("Lebarnold"), SilverEagle
Transport, Inc. ("SilverEagle") and D.W. Freight, Inc.
("Dalworth"), which contributed approximately $1 million, $4.7
million and $2.7 million, respectively, to this revenue gain when
comparing this first quarter with the same period in 1994. The
comparative revenue increases at SilverEagle and Dalworth
reflect, among other things, the January 3, 1995, acquisition of
substantially all of the assets of T.W. Owens & Sons, Inc. by
SilverEagle and the acquisition of the assets of H.R. Hill, Inc.
by Dalworth in March 1994.
The Company's working capital at the end of the first
quarter of 1995 was $12,675,068, which is a decrease of
$12,163,430 or 49% from the end of the 1994 fiscal year. The
main factor contributing to the decrease in working capital was
the Company's acquisition of property and equipment, particularly
the January 1995 acquisition of T.W. Owens for approximately
$11 million in cash.
The Company's investment in Property and Equipment (Less
Accumulated Depreciation) as of the end of the first quarter of
1995 stood at $186,130,791. This figure represents an increase
from December 31, 1994, of $16,527,518 or 10% and reflects the
Company's ongoing capital expansion program. Funding for the
Company's continuing capital expansion program will be accom-
plished through the use of cash generated from current operating
and investment activities, supplemented when necessary by short
or long-term financing.
The Company's operating subsidiaries continue to experience
fierce pricing competition from others in the trucking industry.
Company management remains focused on improving operating effi-
ciencies while at the same time seeking growth opportunities by
offering expanded trucking and warehousing related services to
meet the needs of existing and prospective customers. Management
will continue to seek opportunities for profitable expansion of
the Company.
At the Annual Meeting, held May 3, 1995, stockholders re-
elected Kenneth F. Leedy, Heath L. Allen and Carlton E. Hughes to
serve as members of the Board of Directors, each for a two-year
term.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) NONE APPLICABLE
(b) NONE APPLICABLE
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
ARNOLD INDUSTRIES, INC.
(Registrant)
Date: May 11, 1995 By Heath L. Allen
Heath L. Allen, Secretary
Date: May 11, 1995 By Ronald E. Walborn
Ronald E. Walborn, Treasurer
