Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[x] Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1994
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File Number - 0-12321
ANUHCO, INC.
State of Incorporation - Delaware
IRS Employer Identification No. - 46-0278762
9393 West 110th Street, Suite 100, Overland Park, Kansas 66210
Telephone Number - (913) 451-2800
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.___.
Indicate the number of shares outstanding of each of the issuer's
classes of common stock.
Anuhco, Inc.
Common Stock, $0.01 par value
7,545,870 shares outstanding
as of September 30, 1994
Form 10-Q
Contains 11 pages
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Quarter and Year-To-Date Ending September 30, 1994
(In Thousands, Except Per Share Data)
<CAPTION>
Year-To-Date
Through
Third Quarter Third Quarter
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Operating Revenue....................... $24,913 $19,816 $71,271 $56,717
Operating Expense....................... 23,472 18,947 67,251 54,899
Operating Income........................ 1,441 869 4,020 1,818
Nonoperating Income (Expense)
Gain on sale of property and
equipment, net...................... 29 -- 43 --
Interest income....................... 76 35 188 98
Interest expense...................... ( 23) ( 41) (102) (157)
Other, net............................ -- -- 1 100
Total nonoperating income (expense). 82 ( 6) 130 41
Income from Continuing Operations before
Income Taxes.......................... 1,523 863 4,150 1,859
Income Tax Provision (Note 2)........... -- -- -- --
Income from Continuing Operations....... 1,523 863 4,150 1,859
Income from Discontinued Operations
(Note 6 and 7)........................ -- -- 1,250 2,500
Net Income.............................. $ 1,523 $ 863 $ 5,400 $ 4,359
Average Common Shares Outstanding (Note 5) 7,544 7,542 7,543 7,542
Income Per Share from Continuing
Operations............................. $0.20 $0.11 $0.55 $0.25
Income Per Share from Discontinued
Operations............................. $0.00 $0.00 $0.16 $0.33
Net Income Per Share...................... $0.20 $0.11 $0.71 $0.58
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
Sept 30 Dec. 31
1994 1993
ASSETS (In Thousands)
<S> <C> <C>
Current Assets
Cash and temporary cash investments........... $ 4,702 $ 4,708
Accounts receivable, less allowance for doubt-
ful accounts of $456 and $358 respectively. 9,363 6,731
Insurance refund receivable................... 179 574
Parts and supplies............................ 352 380
Prepayments................................... 339 249
Total current assets....................... 14,935 12,642
Operating Property, at Cost
Revenue equipment............................. 15,640 14,775
Land.......................................... 2,761 1,500
Structures and improvements................... 6,507 3,913
Other operating property...................... 3,938 3,705
28,846 23,893
Less accumulated depreciation.............. (14,664) (13,353)
Net property & equipment................. 14,182 10,540
Long-Term Obligation Receivable................. 1,202 1,180
Other Assets.................................... 111 122
Discontinued Operations (Note 6 and 7).......... -- --
$30,430 $24,484
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term debt.......... $ -- $ --
Accounts payable.............................. 871 1,187
Accrued payroll and fringes................... 6,088 3,934
Claims and insurance accruals................. 222 142
Income tax payable............................ (114) --
Other accrued expenses........................ 424 303
Total current liabilities.................. 7,491 5,566
Long-Term Debt, Net of Current Maturities....... 470 1,860
Shareholders' Equity
Preferred stock with $0.01 par value, author-
ized 1,000,000 shares, none outstanding..... -- --
Common stock with $0.01 par value, authorized
13,000,000 shares, outstanding 7,545,870
shares (Note 5)............................. 75 75
Paid-in capital (Note 5)...................... 5,329 5,319
Retained earnings............................. 17,064 11,664
Total shareholders' equity................. 22,469 17,058
$30,430 $24,484
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of this statement.
<PAGE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Year-To-Date
Through
Third Quarter
1994 1993
(In Thousands)
<S> <C> <C>
Cash Flows From Operating Activities -
Net income.................................. $ 5,400 $ 4,359
Adjustments to reconcile net income to net
cash generated in operating activities -
Gain on sale of assets.................... ( 43) --
Depreciation and amortization............. 1,727 1,496
Net increase (decrease) from change in
other working capital items affecting
operating activities................... ( 409) ( 196)
Effect of discontinued operations (Note 6) (1,250) (2,500)
Total adjustments.................... 68 (1,200)
Net Cash Generated............................ 5,468 3,159
Cash Flows from Investing Activities -
Proceeds from discontinued operations
(Note 6).................................. 1,250 2,500
Purchase of operating property.............. (5,334) (2,295)
Cash Flows from Financing Activities -
Repayment of Debt........................... (1,390) (1,766)
Net Increase (Decrease) In Cash and
temporary cash investments.................. ( 6) 1,598
Cash and Temporary Cash Investments at
beginning of period......................... 4,708 1,230
Cash and Temporary Cash Investments
at end of period............................ $ 4,702 $ 2,828
Cash Paid During the Period for:
Interest.................................... $ 107 $ 161
Income Tax.................................. 47 36
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Periods Ended September 30
<CAPTION>
Year-To-Date
Through
Third Quarter Third Quarter
1994 1993 1994 1993
(In Thousands)
<S> <C> <C> <C> <C>
Common Stock -
Balance at beginning of period...... $ 75 $ 75 $ 75 $ 5,394
Effect of the change in par value
(Note 5).......................... -- -- -- (5,319)
Balance at end of period............ $ 75 $ 75 $ 75 $ 75
Paid-in Capital -
Balance at beginning of period...... $ 5,322 $ 5,319 $ 5,319 $ --
Issuance of common shares under the
Incentive Stock Plan.............. 7 -- 10 --
Effect of the change in par value
(Note 5)......................... -- -- -- 5,319
Balance at end of period............ $ 5,329 $ 5,319 $ 5,329 $ 5,319
Retained Earnings -
Balance at beginning of period...... $15,541 $ 8,724 $11,664 $ 5,228
Income from continuing operations... 1,523 863 4,150 1,859
Income from discontinued operations
(Note 6)......................... -- -- 1,250 2,500
Balance at end of period............ $17,064 $ 9,587 $17,064 $ 9,587
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
ANUHCO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Principles of Consolidation
The consolidated financial statements include Anuhco and all of its
subsidiary companies ("the Company"). All significant intercompany accounts
and transactions have been eliminated in consolidation. The condensed
financial statements included herein have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission ("SEC") and have
not been examined or reviewed by independent public accountants. In the
opinion of management, all adjustments necessary to present fairly the
results of operations have been made.
Pursuant to SEC rules and regulations, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
from these statements unless significant changes have taken place since the
end of the most recent fiscal year. Anuhco believes that the disclosures
contained herein, when read in conjunction with the financial statements and
notes included, or incorporated by reference, in Anuhco's Form 10-K, filed
with the SEC on March 2, 1994, are adequate to make the information presented
not misleading. It is suggested, therefore, that these statements be read in
conjunction with the statements and notes included, or incorporated by
reference, in the aforementioned report on Form 10-K.
2. Income Taxes
In 1993, the Company adopted Statement of Financial Accounting Standard No.
109, Accounting for Income Taxes ("SFAS 109"). SFAS 109 permits the
recognition of deferred tax assets, net of applicable reserve, related to
net operating loss ("NOL") carryforwards and certain temporary differences.
Although the Company has NOL carryforwards and temporary differences in
excess of $32 million, no asset recognition is provided in these
consolidated financial statements, as the realization of such an asset is
not reasonably assured as of September 30, 1994. Such an asset may be
recognized in future periods based upon the facts and circumstances at that
time (See Note 7 Subsequent Event).
3. Profit Sharing
In September 1988, the employees of Crouse Cartage Company ("Crouse
Cartage") approved the establishment of a profit sharing plan ("the Plan").
The Plan is structured to allow all employees (union and non-union) to
ratably share 50 percent of income before income taxes (excluding
extraordinary items and gains or losses on the sale of assets) in return for
a 15 percent reduction in their wages. Plan distributions are made on a
quarterly basis. The Plan was recertified in 1991 and 1994, and shall
continue in effect at least through March 31, 1998, or until a replacement of
the Collective Bargaining Agreement is reached between Crouse Cartage and its
union employees, whichever is the later. The accompanying consolidated
balance sheet for the period ended September 30, 1994 includes an accrual for
profit sharing costs of $1,700,133. The accompanying consolidated statements
of income includes profit sharing costs of $1,700,133 and $4,572,136 for the
third quarter and year to date, respectively.
4. Revolving Credit Agreement
In September 1988, Crouse Cartage entered into a five-year credit agreement
with a commercial bank which provided for maximum borrowings equaling the
lesser of $2,500,000 or the sum of 80 percent of the net depreciated value of
Crouse Cartage's revenue equipment. In June, 1994 the term of this agreement
was extended to June 30, 1996. There was no outstanding balance on this
revolving line of credit at September 30, 1994.
5. Shareholders' Equity
In accordance with a resolution to amend the Company's Certificate of
Incorporation, duly prepared and adopted at the Company's 1993 Annual
Shareholders' Meeting, the capital stock of the Company was changed from
stock without par value to $0.01 par value per share. Such change has no
impact on total shareholders' equity but does require a reclassification of
a portion of capital stock to paid-in capital. This amendment will provide
a cost savings on certain franchise taxes.
Income per share is based on the average number of common shares
outstanding during each period. The average number of common shares so
computed was 7,543,631 and 7,543,217 for the quarter and year to date for the
periods ending September 30, 1994 and 7,542,470 for the quarter and year to
date periods ending September 30, 1993.
6. Discontinued Operations
Under the provisions of a Joint Plan of Reorganization (the "Joint Plan"),
American Freight System, Inc. ("AFS") is responsible for the continued
resolution of pre-July 11, 1991 creditor claims and conversion of assets
owned before that date. As claims are allowed and sufficient cash is
available, distributions to the creditors and Anuhco will occur.
On April 29, 1994, AFS made an interim distribution under the Joint Plan of
5% of each allowed unsecured claim. Anuhco's participation in this
distribution was $1.25 million.
To date AFS has achieved more favorable results than were assumed in the
March 21, 1991 disclosure statement relating to the Joint Plan. Such results
are due to favorable (i) settlements of certain claims, (ii) court decisions
and (iii) asset realizations. Total distributions to Anuhco (including the
$7.25 million previously distributed during 1992, 1993 and 1994) are
projected to exceed $10 million, excluding any proceeds from a judgment
against Westinghouse Electric Corporation ("WEC") (See Note 7 Subsequent
Event). Due to the number and value of claims to be resolved and assets to
be converted to cash, the timing and amount of additional interim
distributions and the timing of the final distribution have not been
determined.
7. Subsequent Event
On November 3, 1994, the Company reported the collection of a judgment
against WEC. As a result of such collection and its impact on AFS net
assets, including certain tax attributes, the Company expects to record as
income a total of $50 to $53 million, or $6.50 to $7.00 per share, during the
fourth quarter of 1994.
On February 23, 1993 a judgment in favor of Anuhco and AFS was entered in
the Circuit Court of Jackson County, Missouri, against WEC for failure to
provide financing pursuant to a loan commitment issued by WEC on June 3,
1988. The judgment awarded $70 million in actual damages and, by state
statute, accrued 9% simple interest from the date of such judgment. WEC
filed motions with the Circuit Court to have this judgment set aside or to
have a new trial granted, but such motions were overruled on April 8, 1993.
WEC filed an appeal of this judgment to the Missouri Court of Appeals,
Western District, in April, 1993. The Court of Appeals unanimously denied
this motion on July 12, 1994. Subsequently, WEC motions for rehearing before
the Missouri Court of Appeals and, in the alternative, a motion for transfer
to the Missouri Supreme Court were denied. On September 13, 1994 WEC filed
an application with the Missouri Supreme Court for transfer of the case to
such court. That application for transfer was denied on October 25, 1994.
With the collection of this judgment from WEC, AFS has declared a
distribution under the Joint Plan which will result in the full payment of
all its resolved claims and liabilities, and a transfer of $7.5 million to
Anuhco on or about November 11, 1994. A review of the AFS reserves for its
unresolved claims and liabilities has been undertaken to determine the amount
and timing of additional cash to be transferred to Anuhco.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
<TABLE>
RESULTS OF OPERATIONS
First Nine Months of 1994 Compared to First Nine Months of 1993
A comparative summary of consolidated operating expenses as a percent of
consolidated operating revenue for the nine months ended September 30, 1994
and 1993 is:
<CAPTION>
Percent of Operating Revenue
Three Quarters Increase
1994 1993 (Decrease)
<S> <C> <C> <C>
Salaries, wages and employee benefits. 54.0% 54.7% (0.7)%
Operating supplies and expenses....... 11.2 11.9 (0.7)
Operating taxes and licenses.......... 2.7 2.7 -
Insurance and claims.................. 2.3 2.3 -
Depreciation.......................... 2.4 2.6 ( .2)
Purchased transportation.............. 21.8 22.6 (0.8)
Total operating expenses............ 94.4% 96.8% (2.4)%
</TABLE>
During the first three quarters of 1994 consolidated operating revenue and
performance were favorably effected by continued regional economic recovery,
a teamsters union strike, January 1, 1994 rate increases and the closing of
a regional carrier within the Company's operating area as compared to the
first three quarters of 1993. Total tonnage of year to date shipments
increased 16.8% to 653,901 tons; on an increase of 25.0% in tonnage of
shipments of less than 10,000 pounds and an increase of 10.7% in tonnage of
shipments 10,000 pounds and over. For shipments of less than 10,000 pounds
average revenue per shipment increased 5.8% to $102.10 and average weight of
shipments increased 3.5% to 1,068 pounds. For shipments of 10,000 pounds and
over, average revenue per shipment increased 1.3% to $637.69 and average
weight of shipments decreased 4.6% to 29,433 pounds.
<PAGE>
<TABLE>
Third Quarter 1994 Compared to Third Quarter 1993
A comparative summary of consolidated operating expenses as a percent of
consolidated operating revenue for the third quarter ended September 30, 1994
and 1993 is:
<CAPTION>
Percent of Operating Revenue
Third Quarter Increase
1994 1993 (Decrease)
<S> <C> <C> <C>
Salaries, wages and employee benefits. 54.0% 54.8% (0.8)%
Operating supplies and expenses....... 11.4 11.0 0.4
Operating taxes and licenses.......... 2.5 2.6 (0.1)
Insurance and claims.................. 2.2 2.4 (0.2)
Depreciation.......................... 2.5 2.6 (0.1)
Purchased transportation.............. 21.6 22.3 (0.7)%
Total operating expenses............ 94.2% 95.7% (1.5)%
</TABLE>
Anuhco's third quarter 1994 consolidated operating revenue and performance
were favorably effected by continued economic recovery and the closing of a
regional carrier within the Company's operating area, as compared to the
third quarter 1993. Total tonnage of third quarter shipments increased 17.2%
to 228,198 tons; on an increase of 25.2% in tonnage of shipments of less than
10,000 pounds and an increase of 11.3% in tonnage of shipments 10,000 pounds
and over. For shipments of less than 10,000 pounds average revenue per
shipment increased 4.9% to $101.37 and average weight of shipments increased
2.8% to 1,062 pounds. For shipments of 10,000 pounds and over, average
revenue per shipment increased 0.7% to $628.09 and average weight of
shipments decreased 5.8% to 29,009 pounds.
FINANCIAL CONDITION
The Company's financial condition was strengthened during the first three
quarters of 1994. Shareholders' equity increased by $5.4 million as a result
of $4.2 million net income from continuing operations and a $1.2 million
distribution from discontinued operations (See Note 7 Subsequent Event).
Loan payments from working capital and distributions from discontinued
operations reduced the Company's long-term debt net of current maturities, by
$1.4 million from December 31, 1993. In addition, Crouse Cartage closed
on various purchases of operating property for $5.3 million, paid from
working capital.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
20(a) - Report to Shareholders for the Third Quarter, 1994,
dated November 11, 1994, included herewith.
(b) Reports on Form 8-K
None
SIGNATURE
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.
Anuhco, Inc.
Registrant
By: /S/ John P. Bigger
John P. Bigger, President,
Chief Executive Officer, and
Chief Financial Officer
Date: November 11, 1994
<PAGE>
Exhibit 20(a)
ANUHCO, INC.
REPORT TO SHAREHOLDERS
THIRD QUARTER 1994
We are pleased to report good news for the third quarter and even
better news for the fourth quarter. In the third quarter, Crouse
Cartage Company, our operating subsidiary, realized record revenues and
earnings. In the fourth quarter the previously reported judgment
against Westinghouse Electric Corporation ("WEC") was collected. As a
result of such collection and its impact on the net assets of its
subsidiary, American Freight System, Inc. ("AFS"), Anuhco expects to
record as income a total of $50 to $53 million, or $6.50 to $7.00 per
share, during the fourth quarter. This, of course, will result in
record net income for the fourth quarter and for the year.
Third quarter 1994 consolidated net income from continuing
operations was $1.5 million or $0.20 per share on revenue of $24.9
million, as compared with third quarter 1993 consolidated net income
from continuing operations of $0.9 million or $0.11 per share on revenue
of $19.8 million. No income from discontinued operations is included in
consolidated net income for the third quarter of 1994 or 1993.
Crouse Cartage, Anuhco's general commodities motor carrier, had
operating income of $1.7 million on revenues of $24.9 million for the
third quarter 1994; as compared to operating income of $1.0 million on
revenues of $19.8 million for the third quarter 1993. This increase
reflects the closing of a regional carrier within Crouse's operating
territory, a continued improvement in the economy and the impact of the
teamsters union strike against certain competitors.
Following the collection of the judgment against WEC, AFS declared
a distribution under the 1991 Reorganization Plan which will result in
full payment of its resolved claims and liabilities and a transfer of
$7.5 million in cash to Anuhco, on or about November 11, 1994. A review
to determine the appropriate reserves for AFS' future expenses and
unresolved claims and liabilities has been undertaken to determine how
much additional cash is to be transferred to Anuhco before the end of
the fourth quarter.
The planned recording of the $50 to $53 million of income will
include the above $7.5 million of cash, the receipt of any additional
cash from AFS in the fourth quarter, the value of other assets remaining
in AFS and; for the first time, the estimated value of income tax net
operating loss carryovers and other recent developments, including
favorable claims settlements.
The judgment against WEC was entered in favor of Anuhco and AFS in
the Circuit Court of Jackson County, Missouri on February 23, 1993 as a
result of WEC's credit unit's failure to provide financing pursuant to
a loan commitment issued to Anuhco on June 3, 1988. The judgment of $70
million was appealed by WEC and was affirmed by the Missouri Court of
Appeals, Western District, in a July 12, 1994 opinion; and on August 30,
1994 this court overruled WEC's motion for a rehearing before the entire
Missouri Court of Appeals and denied a motion that it transfer the case
to the Missouri Supreme Court. The Missouri Supreme Court denied WEC's
application for transfer of the case to the Missouri Supreme Court on
October 25, 1994 and WEC subsequently paid the judgment, plus interest
and court costs. This long saga has ended and it is now in order for we
shareholders to celebrate the victory.
/s/ John P. Bigger /s/ Roy R. Laborde
John P. Bigger, Roy R. Laborde,
President & CEO Chairman
November 11, 1994
<PAGE>
Exhibit 20(a)
<TABLE>
ANUHCO, INC.
UNAUDITED SUMMARY FINANCIAL STATEMENTS
(in thousands, except per share data)
CONSOLIDATED STATEMENTS OF INCOME
Periods Ended September 30
<CAPTION>
Third Quarter Year to Date
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Operating Revenue................. $24,913 $19,816 $71,271 $56,717
Operating Income.................. 1,441 869 4,020 1,818
Net Income -
Continuing Operations........... 1,523 863 4,150 1,859
Discontinued Operations......... -0- -0- 1,250 2,500
Total......................... $ 1,523 $ 863 $ 5,400 $ 4,359
Income Per Share -
Continuing Operations........... $0.20 $0.11 $0.55 $0.25
Discontinued Operations......... 0.00 0.00 0.16 0.33
Total......................... $0.20 $0.11 $0.71 $0.58
Average Common Shares Outstanding. 7,544 7,542 7,543 7,542
CONSOLIDATED BALANCE SHEETS
09/30/94 12/31/93
ASSETS
Current Assets.................... $14,935 $12,642
Operating Property (net).......... 14,182 10,540
Other Assets...................... 1,313 1,302
$30,430 $24,484
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities............... $ 7,491 $ 5,566
Long-Term Debt.................... 470 1,860
Shareholders' Equity.............. 22,469 17,058
$30,430 $24,484
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
EX-27
<ARTICLE> 5
<PERIOD-TYPE> QTR-3
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
[PERIOD-TYPE] 9-MOS
<CASH> 4,702
<SECURITIES> 0
<RECEIVABLES> 9,819
<ALLOWANCES> 456
<INVENTORY> 352
<CURRENT-ASSETS> 14,935
<PP&E> 28,846
<DEPRECIATION> 14,664
<TOTAL-ASSETS> 30,430
<CURRENT-LIABILITIES> 7,491
<BONDS> 0
<COMMON> 75
0
0
<OTHER-SE> 22,394
<TOTAL-LIABILITY-AND-EQUITY> 30,430
<SALES> 71,271
<TOTAL-REVENUES> 71,271
<CGS> 0
<TOTAL-COSTS> 67,251
<OTHER-EXPENSES> (232)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 102
<INCOME-PRETAX> 4,150
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,150
<DISCONTINUED> 1,250
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,400
<EPS-PRIMARY> .71
<EPS-DILUTED> .71
</TABLE>
