FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Year Ended December 31, 1994
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
Securities Registered Pursuant to Section 12(b) of the Act
Title of Each Class Name of Each Exchange
Anuhco, Inc. Common Stock, on Which Registered
par value $0.01 per share, 7,553,920 shares
outstanding, as of February 22, 1995 American Stock Exchange
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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [x]
The aggregate market value of the Common Stock held by non-affiliates of
Anuhco, Inc. as of February 22, 1995, was $69,615,000 based on the last trade
on the American Stock Exchange on that date.
<PAGE>
ANUHCO, INC.
1994 FORM 10-K
TABLE OF CONTENTS
Page
PART I
Item 1. Business............................................ 3
Item 2. Properties.......................................... 8
Item 3. Legal Proceedings................................... 8
Item 4. Submission of Matters to a Vote of Security Holders. 9
Executive Officers of Registrant.................... 9
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters............................ 10
Item 6. Selected Financial Data............................. 11
Item 7. Management's Discussion and Analysis of Financial
Conditions and Results of Operation............ 12
Item 8. Financial Statements and Supplementary Data......... 15
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure............ 29
PART III
Item 10. Directors and Executive Officers of the Registrant.. 29
Item 11. Executive Compensation.............................. 29
Item 12. Security Ownership of Certain Beneficial
Owners and Management.......................... 29
Item 13. Certain Relationships and Related Transactions...... 30
PART IV
Item 14. Exhibits, Financial Statements, Schedules,
and Reports.................................... 30
<PAGE>
PART I
Item 1. Business.
Anuhco, Inc. ("Anuhco"), through its subsidiary, Crouse Cartage Company
("Crouse Cartage"), operates a diversified motor freight transportation
system primarily serving the upper central and midwest portion of the United
States. Crouse Cartage, acquired by Anuhco as of September 1, 1991, is a
regular-route motor common carrier of general commodities in less-than-
truckload ("LTL") quantities with a ten state service area, and also offers
irregular-route motor common carrier service for truckload quantities of
general and perishable commodities throughout the 48 contiguous United
States. Crouse Cartage operates as an autonomous company with the same
management and operations as before its acquisition by Anuhco. Anuhco, with
two employees, performs those functions required of a public holding company
and monitors the operations of Crouse Cartage.
Crouse Cartage Company
The following table sets forth certain financial and operating data with
respect to Crouse Cartage prior to the effects of acquisition related
adjustments for the years 1994 through 1991.
<TABLE>
<CAPTION>
1994 1993 1992 1991
<S> <C> <C> <C> <C>
Revenue (000's)....................... $95,772 $76,888 $71,266 $63,449
Operating Income (000's).............. 5,803 3,206 2,980 2,511
Operating Ratio (Note 1).............. 93.9% 95.8% 95.8% 96.0%
Number of shipments (000's) -
Less-than-truckload (Note 2)..... 744 620 583 515
Truckload........................ 33 28 28 28
Revenue per hundredweight -
Less-than-truckload.............. $ 9.52 $ 9.36 $ 9.30 $ 9.52
Truckload........................ 2.19 $ 2.06 $ 2.04 $ 2.00
Tonnage (000's) -
Less-than-truckload.............. 398 321 292 246
Truckload........................ 479 433 434 447
Intercity miles operated (000's)...... 36,720 32,139 31,110 28,289
At year end, number of -
Terminals (Note 3)............... 53 48 44 42
Tractors and trucks.............. 504 483 426 363
Trailers......................... 948 869 841 776
Employees........................ 965 806 769 740
</TABLE>
Notes:
(1) Operating ratio is the percent of operating expenses to
operating revenue.
(2) Less-than-truckload refers to shipments weighing less than
10,000 pounds.
(3) Includes company-owned, company leased, agent and other
operating locations.
<PAGE>
Crouse Cartage, an Iowa Corporation headquartered in Carroll, Iowa, is
engaged in the transportation of general commodities which include all types
of freight other than personal household goods, commodities of exceptionally
high value, explosives and commodities in bulk or requiring special
equipment. During 1994, LTL shipments (less than 10,000 pounds) comprised
78% of revenue and truckload shipments (10,000 pounds or greater) comprised
22% of revenue. Crouse Cartage is an LTL regular route common carrier with
LTL service in the 10 states of Illinois, Indiana, Iowa, Minnesota, Missouri,
Nebraska, South Dakota, Wisconsin, Kansas and Michigan. Crouse Cartage also
has a truckload general commodities and special commodities division which
operates in all 48 contiguous states. More than 95% of Crouse Cartage's
business originates or terminates within 400 miles of its headquarters.
Crouse Cartage with over 12,000 customers has a broad customer base, with no
one customer comprising 5% of its total revenue.
LTL shipments must be handled rapidly and carefully in several
coordinated stages. Shipments are first picked up from customers by local
drivers operating from the Crouse Cartage network of 53 service locations,
each of which services a particular territory. The freight is then
transported to a terminal, loaded into intercity trailers, carried by
linehaul drivers to the terminal which services the delivery area,
transferred to trucks or trailers and then delivered to the consignee by
local drivers. Much of Crouse Cartage's LTL freight is handled and/or
transferred through one of three centrally located "break bulk" terminals
between the origin and destination service areas. Competition for LTL
freight is primarily based upon service and freight rates. LTL operations
require substantial equipment capabilities and an extensive network of
terminal facilities. Accordingly, LTL operations, compared to truckload
shipments and operations, command higher rates per weight shipped and have
tended historically to be less vulnerable to competition from other forms of
transportation such as railroads. Crouse Cartage's concentrated and
efficient operations typically allow it to provide overnight service
(delivery on the day after pickup) on over 90% of the LTL freight it handles;
providing Crouse Cartage with a competitive advantage and the ability to
maintain compensatory rates.
Seasonality
Crouse Cartage's quarterly operating results, as well as those of the
motor carrier industry in general, fluctuate with the seasonal changes in
tonnage levels and with changes in weather-related operating conditions.
Tonnage levels are generally highest from September through November. A
smaller peak also generally occurs in April through June. Inclement weather
conditions during the winter months adversely affect the number of freight
shipments and increase operating costs. Historically, Crouse Cartage has
achieved its best operating results in the second and third quarters when
adverse weather conditions do not affect its operations and seasonal peaks
occur in the freight shipped via public transportation.
Insurance and Safety
Crouse Cartage is largely self-insured with respect to public liability,
property damage, workers' compensation, cargo loss or damage, fire, general
liability and other risks. In addition, Crouse Cartage maintains excess
liability coverage for risks over and above the self-insured retention
limits. All claims pending against Crouse Cartage are fully covered by
outside insurance or, in the opinion of management, are adequately reserved
under Crouse Cartage's self-insurance program.
Because most risks are largely self-insured, Crouse Cartage's insurance
costs are primarily a function of the success of its safety programs and less
subject to the large increases in insurance premiums experienced in recent
years by the motor carrier industry. Crouse Cartage conducts a comprehensive
safety program to meet its specific needs. Crouse Cartage's drivers have
good driving records and have won the Iowa State Truck Driving Championship
14 times in the past 16 years. Auto liability and workers' compensation
claims consistently are below industry average in number of claims and
amounts paid for such claims (approximately 2.3% of revenue in 1994).
Competition
Crouse Cartage's operations are subject to intense competition with
other motor common carriers and, to a lesser degree, with contract and
private carriage. The enactment of the Motor Carrier Act of 1980
substantially deregulated the trucking industry, eased entry requirements
into the transportation industry and increased competition among motor
carriers. Intense competition for freight has resulted in a proliferation of
discount programs among competing carriers. Crouse Cartage competes in such
price discounting on an account by account basis, taking into consideration
the cost of services relative to the net revenue to be obtained, the
competing carriers and the need for freight in specific traffic lanes.
Crouse Cartage's main competition over its shorter routes is with Con-Way
Central Express, Ann Arbor, Michigan; Central Transport, Sterling Heights,
Michigan; H&W Motor Express, Dubuque, Iowa; Hyman Freightways, St. Paul,
Minnesota; and Midland Transportation, Marshalltown, Iowa. For freight
moving over greater distances, Crouse Cartage must compete with national and
large inter-regional carriers. Crouse Cartage's reliable overnight service
on key lanes, very low level of freight loss and damage claims and general
shipper satisfaction have allowed it to maintain steady growth with a
compensatory level of rates.
Regulation
The interstate operations of Crouse Cartage are subject to regulation by
the Interstate Commerce Commission ("ICC") and the Department of
Transportation ("DOT"). Crouse Cartage is also subject to state public
utilities commissions and similar state regulatory agencies with respect to
its intrastate operations. The ICC regulates entry into motor carrier
operations, rates and charges, tariffs, accounting systems and certain
mergers and consolidations. The DOT generally regulates driver
qualifications and safety and equipment standards. Crouse Cartage is also
subject to safety regulations of the states in which it operates, as well as
regulations governing the weight and dimensions of equipment.
During 1994, the United States Congress passed legislation which
generally eliminated the requirements for obtaining or maintaining
"intrastate" operating authority effective January 1, 1995. This
deregulation will not materially affect the financial position or results of
operations of the Company.
Passage of the Motor Carrier Act of 1980 represented, among other
things, an effort to increase competition among motor carriers and
substantially reduce industry regulation. Entry into the motor carrier
market has been facilitated by making ICC operating authority more readily
available. Carriers have been given the opportunity to greatly expand the
scope of their operations. (See "Competition".) In addition, the Motor
Carrier Act of 1980 limited the immunity from the antitrust laws previously
applicable to the trucking industry in setting prices for transportation
services. After July 1, 1984, collective discussions by motor carriers may
only involve general rate increases or tariff restructuring relating to
average costs for the industry as a whole. Such discussions may not relate
to individual single-line rates or specific markets. In addition, the Motor
Carrier Rate-Making Study Commission, established by the Motor Carrier Act of
1980, has, by majority vote, recommended to the Congress that antitrust
immunity for all motor carrier collective ratemaking be eliminated. The DOT
also has recommended an end to collective ratemaking.
Employees
Crouse Cartage employs approximately 965 persons, of whom approximately
796 are drivers, mechanics, dockworkers or terminal office clerks. The
remainder are engaged in managerial, sales and administrative functions.
Labor costs represent the largest single component of Crouse Cartage's
operating expenses, totaling 53.8% of consolidated revenue for 1994. In the
opinion of its management, Crouse Cartage has a good working relationship
with its employees.
Approximately 70% of Crouse Cartage employees, including primarily
drivers, dockworkers and mechanics, are represented by the International
Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America
("Teamsters Union"). Crouse Cartage and the Teamsters Union are parties to
the National Master Freight Agreement ("NMFA") which expires on March 31,
1998. As an employer signatory to the agreement, Crouse Cartage must
contribute to certain pension plans established for the benefit of employees
belonging to the Teamsters Union.
Under provisions of the NMFA, Crouse Cartage has maintained a profit
sharing program for all employees since 1988 ("Profit Sharing"). In 1994 the
Profit Sharing was extended for at least another four years after 87% of the
union employees and 91% of its non-union employees voted for such extension.
Profit Sharing is structured to allow all Crouse Cartage employees to ratably
share 50% of Crouse Cartage's income before income taxes (excluding
extraordinary items and gains and losses on the sale of assets) in return for
a 15% reduction in wages. Profit Sharing distributions, made quarterly,
totalled $6.0 million in 1994.
American Freight System, Inc.
American Freight System, Inc. ("AFS") is treated as a discontinued
operation of Anuhco. The primary obligation of AFS is to administer the
provisions of a Joint Plan of Reorganization ("Joint Plan"). After discharge
from bankruptcy in 1991, AFS is under the control of a reconstituted AFS
Board of Directors, which currently consists of two individuals who formerly
served on creditors' committees, and two additional persons selected by
Anuhco. AFS is to sell its remaining non-cash assets and distribute its
assets as provided in the Joint Plan. AFS is to resolve creditor claims
against the estates and make distributions to holders of allowed claims as
cash is available. The Joint Plan also provides for certain distributions
from AFS to Anuhco as unsecured creditor distributions occur in excess of 50%
of allowed claims, as shown in the following table:
<TABLE>
<CAPTION>
Cumulative Unsecured
Creditors' Distribution Anuhco Participation
<S> <C>
50.01 - 70% $100,000 per percentage point
70.01 - 80% $ 25,000 per percentage point
80.01 - 130% $250,000 per percentage point
</TABLE>
Anuhco receives the full benefit of any remaining assets through its
ownership of the capital stock of AFS if unsecured creditors receive
distributions equivalent to 130% of their allowed claims.
Anuhco and unsecured creditors have received distributions from AFS
during 1992, 1993 and 1994 as follows:
<TABLE>
<CAPTION>
Cumulative Unsecured Cumulative Anuhco
Date Creditor Distribution % Participation
<S> <C> <C>
February 18, 1992 60% $ 1.00 Million
September 11, 1992 80% 2.25 Million
April 15, 1993 90% 4.75 Million
October 13, 1993 95% 6.00 Million
April 29, 1994 100% 7.25 Million
November 16, 1994 130% 14.75 Million
</TABLE>
In addition, AFS paid a dividend of $25 million to Anuhco on December
28, 1994. Such payment represents a portion of the benefit Anuhco recognized
as Income from Discontinued Operations in December, 1994 as a result of its
ownership of AFS capital stock.
AFS had net assets of $21.1 million as of December 31, 1994. Such net
assets were recognized by Anuhco as income from discontinued operations
during December, 1994. The liquidation of the remaining assets and
settlement of the liabilities is anticipated to be substantially completed
during 1995. See Note 8 to the consolidated financial statements - AFS Net
Assets - for further discussion.
Item 2. Properties.
Anuhco owns property through Crouse Cartage which operates a modern
intercity fleet and maintains a network of terminals to support the intercity
movement of freight. Crouse Cartage owns most of its fleet but leases some
equipment from owner-operators to supplement the owned equipment and to
provide flexibility in meeting seasonal and cyclical business fluctuations.
As of December 31, 1994 Crouse Cartage owned 470 tractors and 34 trucks.
During 1994 Crouse Cartage leased 182 tractors and 33 flatbed trailers from
owner-operators. On December 31, 1994, it also owned 257 temperature
controlled trailers, 691 volume vans (including 245 53-foot high-cube van
trailers), and 28 flatbed trailers.
The table below sets forth the number of operating locations at year end
for the last four years:
<TABLE>
<CAPTION>
1994 1993 1992 1991
<S> <C> <C> <C> <C>
Owned terminals....... 26 10 9 9
Leased terminals...... 8 19 19 20
Agency terminals...... 19 19 16 13
Total............ 53 48 44 42
</TABLE>
Effective January 1, 1994, Crouse Cartage exercised its purchase options
under certain operating leases to purchase eleven (11) of the "Leased
Terminals", above.
The depreciated net book value of Crouse Cartage's property and
equipment at December 31, 1994 was:
<TABLE>
<CAPTION>
Amount
(In Thousands)
Description
<S> <C>
Land......................... $ 2,761
Structures and improvements.. 6,107
Revenue equipment............ 4,671
Other operating property..... 878
Construction in progress..... -
Total................... $14,417
</TABLE>
Item 3. Legal Proceedings.
On February 5, 1991, AFS (including certain subsidiaries subsequently
merged with AFS) and its parent filed a Joint Plan of Reorganization ("Joint
Plan") and a related Disclosure Statement with the United States Bankruptcy
Court, District of Kansas, Topeka Division ("Bankruptcy Court"). After
approval by each class of creditors entitled to vote and the equity security
holders, on June 10, 1991, following a confirmation hearing, the Bankruptcy
Court confirmed the Joint Plan with an Effective Date of July 11, 1991. The
Joint Plan provided for the reorganization of the Company with $3.8 million
in cash, no debt and the expressed intent of acquiring one or more operating
companies; and the administration of the Joint Plan by AFS. (See Item 1,
American Freight System, Inc. for further discussion.)
On January 12, 1994 a complaint was filed in the District Court of
Johnson County, Kansas, against Anuhco, AFS and certain employees of those
companies by a former employee of AFS. Such complaint alleges breach of
contract, promissory estoppel, tortious interference, and misrepresentation
and fraud, as it relates to an alleged incentive compensation arrangement
between the former employee and AFS. The suit claims, from Anuhco and
others, actual damages in excess of $2 million and punitive damages of $5
million. Management believes such claims will not likely have a material
adverse effect on Anuhco's financial position or business.
Anuhco's subsidiaries are parties to routine litigation, other than
litigation being conducted pursuant to the Joint Plan, primarily involving
claims for personal injury and property damage incurred in the
transportation of freight and the collection of receivables. Anuhco and its
subsidiaries maintain insurance programs and accrue for expected losses in
amounts designed to cover liability resulting from personal injury and
property damage claims. In the opinion of management, the outcome of such
claims and litigation will not materially affect the Company's financial
position or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the security holders during the
fourth quarter of 1994.
Included herein, pursuant to General Instruction G, is the information
regarding executive officers required by Item 401 (b) and (e) of Regulation
S-K, as of March 31, 1995.
<TABLE>
<CAPTION>
Executive Officers
Name Age Position
<S> <C> <C>
John P. Bigger 60 President and Chief Executive Officer;
Treasurer and Chief Financial Officer
Lawrence D. Crouse 54 Vice President and Director
Barbara J. Wackly 53 Corporate Secretary
</TABLE>
John P. Bigger, a member of the Company's Board from July 19, 1988 to
March 22, 1991, has been President and Chief Executive Officer of the Company
since September 23, 1988. On July 8, 1991 he was elected to the additional
office of Treasurer and designated as Chief Financial Officer. He previously
served as Executive Vice President, Senior Vice President-Administration and
Corporate Secretary, and Vice President-Administration of ACI at various
times from 1982. From 1978 to 1982, he held positions as Vice President-
Administration of AFS and Assistant to the Chairman of AFS. From 1972 to
1978 he was Dean of Admissions and Registrar of Georgia State University and
from 1960 through 1969 was employed by Arthur Andersen & Co. in their
consulting division. Mr. Bigger has sole voting and investment power with
respect to 14,863 shares of Anuhco Common Stock.
Lawrence D. ("Larry") Crouse has been a member of the Company's Board
and Vice President of the Company since September 5, 1991. He has served as
Chairman and Chief Executive Officer of CC Investment Corporation (former
parent of Crouse Cartage and now a subsidiary of Anuhco) since 1987 and has
been Chief Executive Officer of Crouse Cartage since 1987. He has been owner
and President of K. P. Enterprises, a personal investment and holding company
since 1966. One of the principal assets of K. P. Enterprises was a truckload
common carrier doing business as Corrugated Carriers, which ceased operations
in March, 1995. Mr. Crouse has sole voting and investment power with respect
to 168,036 shares of Anuhco Common Stock.
Barbara J. Wackly has been Corporate Secretary of Anuhco since November,
1988. From 1988 to 1992 she served as Vice President of ACI Services, Inc.,
a wholly-owned subsidiary of the Company. From 1983 to 1988 she was the
Executive Assistant to the Chairman of the Board. Ms. Wackly has sole voting
and investment power with respect to 773 shares of Anuhco Common Stock.
PART II
Item 5. Market for Registrant's Common Equity and
Related Shareholder Matters.
(a) Market Information.
Anuhco's Common Stock is and has been traded on the American Stock
Exchange under the symbol ANU since its listing on June 21, 1993. From
November 12, 1991 to June 21, 1993 Anuhco's Common Stock was traded over-the-
counter under the symbol ANUH on the Nasdaq Small-Cap Market. The following
table shows the sales price information for each full quarterly period after
June 30, 1993, and the bid prices for each full quarterly period from January
1, 1993 through June 30, 1993.
<TABLE>
<CAPTION>
1994 High Low
<S> <C> <C>
Fourth Quarter....................... $11 7/8 $ 8 1/4
Third Quarter........................ 10 1/8 6
Second Quarter....................... 6 7/8 5 1/8
First Quarter........................ 5 7/8 4 3/4
</TABLE>
<TABLE>
<CAPTION>
1993 High Low
<S> <C> <C>
Fourth Quarter....................... $ 5 1/8 $ 3 7/8
Third Quarter........................ 4 11/16 4
Second Quarter....................... 5 3/16 3 13/16
First Quarter........................ 5 2 1/2
</TABLE>
(b) Holders.
<TABLE>
<CAPTION>
Number of Holders of Record
Title of Class at December 31, 1994
<S> <C>
Common Stock, par value
$0.01 per share 7,360
</TABLE>
(c) Dividends.
No cash dividends were paid during 1994 or 1993 on Anuhco's Common
Stock. Anuhco currently intends to retain earnings to finance expansion and
does not anticipate paying cash dividends on its Common Stock in the near
future. Anuhco's future policy with respect to the payment of cash dividends
will depend on several factors including, among others, any acquisitions,
earnings, capital requirements and financial and operating conditions.
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
1994 1993 1992 1991
(In Thousands, Except Per Share Data)
<S> <C> <C> <C> <C>
Operating Revenue.................... $ 95,772 $ 76,888 $ 71,266 $ 21,853
Income from Continuing Operations.... $ 5,495 $ 2,673 $ 2,296 $ 682
Income from Discontinued Operations.. $ 54,845 $ 3,750 $ 2,250 $ 41,323
Net Income........................... $ 60,340 $ 6,423 $ 4,546 $ 42,005
Net Income per Share -
Continuing Operations............ $ 0.73 $ 0.35 $ 0.30 $ 0.09
Discontinued Operations1......... $ 7.27 $ 0.50 $ 0.30 $ 5.57
Total............................ $ 8.00 $ 0.85 $ 0.60 $ 5.66
Total Assets......................... $ 84,772 $ 24,484 $ 19,388 $ 18,205
Long-Term Debt2...................... $ - $ 1,860 $ 3,927 $ 6,912
Cash Dividends per Common Share...... $ - $ - $ - $ -
</TABLE>
1 See Note 8 of the Notes to Consolidated Financial Statements.
2 Including current maturities of $0 for 1994 and 1993, $297,000 for 1992
and $315,000 for 1991 (See Note 4 of the Notes to Consolidated Financial
Statements).
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation.
The following table sets forth the percentage relationship of revenue and
expense items to operating revenue for the registrant for the years ended
December 31:
<TABLE>
<CAPTION> Percent of Operating Revenue
1994 1993 1992
<S> <C> <C> <C>
Operating Revenue......................... 100.0% 100.0% 100.0%
Operating Expenses -
Salaries, wages & employee benefits.. 54.0 54.4 54.2
Operating supplies and expenses...... 11.4 12.1 12.4
Operating taxes and licenses......... 2.7 2.8 2.7
Insurance and claims................. 2.3 2.1 2.0
Depreciation......................... 2.4 2.6 2.6
Purchased transportation and rents... 21.8 22.7 22.6
Total operating expenses............. 94.6 96.7 96.5
Operating Income.......................... 5.4 3.3 3.5
Non-Operating Income (Expense), net....... 0.3 0.2 (0.3)
Income from Continuing Operations
before Income Taxes.................. 5.7 3.5 3.2
Income Tax Provision...................... 0.0 0.0 0.0
Income from Continuing Operations......... 5.7% 3.5% 3.2%
</TABLE>
RESULTS OF OPERATIONS
Anuhco, through its subsidiary Crouse Cartage, was able to continue its
growth in total revenue and number of LTL shipments in 1994 and to increase
its truckload shipments. As a result of a strong economy during 1994, as
well as the effects of the teamsters union strike against certain
competitors, and the closing of a regional carrier's operations within the
Company's operating area, the Company's revenue surged nearly 25%. Although
operating expenses were also on the rise, due to increased efficiency of both
personnel and equipment, that increase was only 22% over 1993. The net
impact on the Company was an increase of operating profitability of
approximately 63% for the year. In 1994 total tonnage of shipments increased
by 16.4% over 1993; with LTL tonnage increasing 24.1% and truckload tonnage
increasing by 10.7%. Primarily as a result of holding a portion of the
January, 1994 rate increases against ever present competition and rate
discounting, revenue per hundredweight increased 1.7% and 6.4% for LTL and
truckload shipments, respectively.
The Company was able to continue its growth in total revenue and number
of LTL shipments in 1993. In 1993 total tonnage of shipments increased by
3.8% over 1992; with LTL tonnage increasing 9.7% and truckload tonnage
decreasing by 0.3%. The decrease in truckload tonnage resulted in a 0.1%
increase in truckload revenue per hundredweight due to the retention of more
profitable traffic. In spite of a January 1993 rate increase, LTL revenue
per hundredweight only increased 0.1% due to the continued effects of rate
discounting.
The 1992 total tonnage of shipments increased by 4.9.% over 1991; with
LTL tonnage increasing 19.0% and truckload tonnage decreasing by 2.8%. The
decrease in truckload tonnage resulted in a 3.7% increase in truckload
revenue per hundredweight due to the retention of more profitable traffic.
In spite of a 3.0% rate increase, LTL revenue per hundredweight decreased
2.3% largely as a result of industry freight rate discounting; fueled by the
continued softness of the economy and excess capacity in the motor carrier
industry. Led by a 1.3% increase in salaries and wages in 1992 under the
labor contract effective April 1, 1991, and with a 3.9% increase in number of
employees, operating expenses increased 12.1% over 1991, while revenue
increased by 12.3%; resulting in a 22.3% increase in Anuhco's operating
income.
As a result of inflationary cost increases and in anticipation of labor
and other cost increases in 1995, freight rate increases were made effective
January 1, 1995 which could favorably impact revenues, if the economy
improves and industry wide discounting does not accelerate. Indications are
that expenses will increase generally in line with changes in revenues and
the general rate of inflation experienced in 1994.
FINANCIAL CONDITION
Anuhco continued to strengthen its financial position during 1994 and
1993. At the beginning of 1993 assets totaled $19.4 million while
shareholders' equity amounted to $10.6 million. By the end of 1994 total
assets had increased to $84.8 million and shareholders' equity had increased
to $77.4 million. During this period long-term debt of $3.9 million was
eliminated, while the Company's cash position increased from $1.2 million to
$38.3 million. Major factors contributing to these improvements were
successful operations creating $5.5 million and $2.7 million of net income
and discontinued operations which generated $54.8 million and $3.8 million of
net income for 1994 and 1993, respectively. The large income from
discontinued operations relates to the collection of a judgment against
Westinghouse Electric Corporation (see footnote 8 to the consolidated
financial statements). The increased capital is being utilized to further
upgrade the company's equipment, for additions and enhancement of terminal
facilities, and may be utilized for acquisition(s) should a viable
candidate(s) become available. Capital expenditures totaled $6.1 million and
$2.7 million in 1994 and 1993, respectively.
Anuhco expects available cash and cash generated from 1995 operations to
be sufficient to fund its operations and to meet other cash needs for 1995.
Should additional cash be required, Crouse Cartage has a $2.5 million secured
revolving credit agreement with Bankers Trust Company of Des Moines, Iowa,
with no balance outstanding on December 31, 1994, which is available to meet
short term operational needs and long-term requirements.
At December 31, 1994, Crouse Cartage owns or leases parcels of real
property which are utilized in their operations. Because many of these
facilities maintain underground or other fuel storage tanks, some ongoing
environmental liability exists; however, management is not aware of any
material contamination.
AFS is accounted for as a discontinued operation in these financial
statements. The net assets, including administrative costs, are recorded on
the financial statements of Anuhco as a current asset, as management expects
to complete the liquidation of the net assets during 1995.
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of Anuhco, Inc.:
We have audited the accompanying consolidated balance sheet of Anuhco, Inc.
(a Delaware corporation) and Subsidiaries as of December 31, 1994 and 1993,
and the related consolidated statements of income, shareholders' equity and
cash flows for each of the three years in the period ended December 31, 1994.
These consolidated financial statements and the schedule referred to below
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and schedule
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Anuhco,
Inc. and Subsidiaries as of December 31, 1994 and 1993, and the results of
their operations and their cash flows for each of the three years in the
period ended December 31, 1994, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule II is presented for the
purpose of complying with the Securities and Exchange Commission rules and is
not a required part of the basic financial statements. This schedule has
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, fairly states, in all material
respects, the financial data required to be set forth therein in relation to
the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Kansas City, Missouri
February 16, 1995
<PAGE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
In Thousands, Except Share Amounts
<CAPTION>
December 31 December 31
1994 1993
ASSETS
<S> <C> <C>
Current Assets
Cash and temporary cash investments............ $38,258 $ 4,708
Accounts receivable, less allowance for doubt-
ful accounts of $412 and $358, respectively... 8,675 6,731
Insurance refund receivable.................... 329 574
Parts and supplies............................. 365 380
Prepayments and other.......................... 289 249
AFS net assets (Note 8)........................ 21,095 --
Total current assets....................... 69,011 12,642
Operating Property, at Cost
Revenue equipment.............................. 15,939 14,775
Land........................................... 2,761 1,500
Structures and improvements.................... 6,859 3,913
Other operating property....................... 4,097 3,705
29,656 23,893
Less Accumulated Depreciation................ (15,239) (13,353)
Net operating property................... 14,417 10,540
Other Assets....................................... 1,344 1,302
$84,772 $24,484
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Accounts payable............................... $ 906 $ 1,187
Accrued payroll and fringes.................... 5,775 3,934
Claims and insurance accruals.................. 247 142
Income tax payable (Note 6).................... -- --
Other accrued expenses......................... 425 303
Total current liabilities.................. 7,353 5,566
Long-Term Debt to Related Parties, net of current
maturities (Note 4)............................ -- 1,860
Commitments (Note 7)............................... -- --
Shareholders' Equity (Notes 1 and 5)
Preferred stock $0.01 par value, authorized
1,000,000 shares, none outstanding........... -- --
Common stock $0.01 par value, authorized
13,000,000 shares, outstanding 7,552,920
shares....................................... 76 75
Paid-in capital................................ 5,339 5,319
Retained earnings.............................. 72,004 11,664
Total shareholders' equity................. 77,419 17,058
$84,772 $24,484
<FN>
The accompanying notes to consolidated financial statements
are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
In Thousands, Except Per Share Amounts
<CAPTION>
Year Ended December 31
1994 1993 1992
<S> <C> <C> <C>
Operating Revenue............................... $95,772 $76,888 $71,266
Operating Expenses
Salaries, wages and employee benefits......... 51,732 41,816 38,645
Operating supplies and expenses............... 10,869 9,316 8,855
Operating taxes and licenses.................. 2,597 2,153 1,914
Insurance and claims (Note 3)................. 2,209 1,579 1,428
Depreciation.................................. 2,315 2,022 1,819
Purchased transportation and rents............ 20,829 17,507 16,095
Total operating expenses.................... 90,551 74,393 68,756
Operating Income................................ 5,221 2,495 2,510
Nonoperating Income (Expense)
Interest income............................... 342 151 128
Interest expense.............................. (114) (193) (503)
Gain on sale of property and equipment, net... 45 118 16
Other, net.................................... 1 102 145
Total nonoperating income (expense)......... 274 178 (214)
Income From Continuing Operations Before
Income Taxes.................................. 5,495 2,673 2,296
Income Tax Provision (Note 6)................... -- -- --
Income From Continuing Operations............... 5,495 2,673 2,296
Income From Discontinued Operations (Note 8).... 54,845 3,750 2,250
Net Income...................................... $60,340 $ 6,423 $4,546
Average Common Shares Outstanding............... 7,545 7,542 7,542
Income Per Share from Continuing Operations..... $0.73 $0.35 $0.30
Income Per Share from Discontinued Operations... $7.27 $0.50 $0.30
Net Income Per Share............................ $8.00 $0.85 $0.60
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
Year Ended December 31
1994 1993 1992
(In Thousands)
<S> <C> <C> <C>
Cash Flows From Operating Activities-
Net income.................................... $60,340 $ 6,423 $4,546
Adjustments to reconcile net income to
net cash generated in operating activities-
Gain on sale of assets..................... ( 45) ( 118) ( 16)
Depreciation............................... 2,315 2,022 1,819
Net increase (decrease) from change in
other working capital items affecting
operating activities...................... ( 19) ( 407) (359)
Income from discontinued operations
(Note 8).................................. (54,845) (3,750) (2,250)
7,746 4,170 3,740
Cash Flows From Investing Activities-
Proceeds from discontinued operations
(Note 8)................................... 33,750 3,750 2,450
Purchase of operating property, net........... (6,086) (2,375) (4,313)
Repurchase minority interest in Crouse Cartage -- -- ( 435)
27,664 1,375 (2,298)
Cash Flows from Financing Activities-
Repayment of debt............................. (1,860) (2,067) (2,985)
Net Increase (Decrease) in Cash and
Temporary Cash Investments.................... 33,550 3,478 (1,543)
Cash and Temporary Cash Investments at
Beginning of Period........................... 4,708 1,230 2,773
Cash and Temporary Cash Investments at
End of Period................................. $38,258 $ 4,708 $1,230
Cash Paid During the Period for-
Interest...................................... $ 118 $ 200 $ 569
Income Tax.................................... 47 40 8
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<CAPTION>
Year Ended December 31
1994 1993 1992
(In Thousands)
<S> <C> <C> <C>
Common Stock -
Balance at beginning of period................ $ 75 $ 5,394 $ 5,394
Effect of the change in par value (Note 5).... -- (5,319) --
Issuance of shares under the Incentive
Stock Plan.................................. 1 -- --
Balance at end of period...................... $ 76 $ 75 $ 5,394
Paid-in Capital -
Balance at beginning of period................ $ 5,319 $ -- $ --
Effect of the change in par value (Note 5).... -- 5,319 --
Issuance of shares under Incentive Stock Plan. 20 -- --
Balance at end of period...................... $ 5,339 $ 5,319 $ --
Retained Earnings -
Balance at beginning of period................ $11,664 $ 5,228 $ 682
Income from continuing operations............. 5,495 2,673 2,296
Income from discontinued operations (Note 8).. 54,845 3,750 2,250
Other......................................... -- 13 --
Balance at end of period...................... $72,004 $11,664 $ 5,228
</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
December 31, 1994 and 1993
1. Summary of Significant Accounting Policies
Principles of Consolidation - The consolidated financial statements include
Anuhco, Inc. and its subsidiary companies ("the Company"), all of which are
wholly-owned. Anuhco's holdings include Crouse Cartage Company ("Crouse
Cartage"), a regional less-than-truckload motor carrier, and American Freight
System, Inc. ("AFS"). On June 10, 1991, the Joint Plan of Reorganization
("Joint Plan") was confirmed by the Bankruptcy Court resulting in the formal
discharge of American Carriers, Inc., AFS and other subsidiaries from Chapter
11 Bankruptcy proceedings. AFS, whose responsibility it is to administer the
Joint Plan, has been accounted for as a discontinued operation since 1991
with only net assets reflected in the Anuhco consolidated financial
statements (see Note 8). All significant intercompany accounts and
transactions have been eliminated in consolidation.
Depreciation and Maintenance - Depreciation is computed using the straight-
line method and the following useful lives for new equipment:
<TABLE>
<CAPTION>
Revenue Equipment -
<S> <C>
Linehaul Tractors 3 - 5 years
Linehaul Trailers 3 - 5 years
Terminal Facilities 19 - 31.5 years
Other Equipment 2 - 10 years
</TABLE>
Upon sale or retirement of operating property, the cost and accumulated
depreciation are removed from the accounts and any gain or loss is reflected
in non-operating income. The Company expenses costs related to repairs and
overhauls of equipment as incurred.
Cost of Tires - The cost of tires, including those purchased with new
equipment, is expensed when the tires are placed in service.
Recognition of Revenues - Operating revenues, and related direct expenses,
are recognized when freight is delivered. Other operating expenses are
recognized as incurred.
Income Taxes - The Company accounts for income taxes in accordance with the
liability method as specified in the Financial Accounting Standards Board's
Statement No. 109, Accounting for Income Taxes. Deferred income taxes are
determined based upon the difference between the book and the tax basis of
the Company's assets and liabilities. Deferred taxes are provided at the
enacted tax rates expected to be in effect when these differences reverse.
Cash Equivalents - The Company considers all highly liquid investments
purchased with an original maturity of approximately six months or less to be
cash equivalents. Such temporary investments generally are held in U. S.
Treasury securities or commercial paper of the highest rating, the cost of
which approximates market value.
2. Employee Benefits
Multiemployer Plans
Crouse Cartage contributed $3,221,579, $2,780,082, and $2,573,270 to the
multiemployer pension plans for 1994, 1993 and 1992, respectively. Crouse
Cartage contributed $4,231,228, $3,600,635 and $3,128,312 to the
multiemployer health and welfare plans for 1994, 1993 and 1992, respectively.
Non-Union Pension Plan
Crouse Cartage has a defined contribution profit sharing (as defined by the
Internal Revenue Code) plan ("the Non-union Plan") providing for a mandatory
Company contribution of 5% of annual earned compensation of the non-union
employees. Additional discretionary contributions can be made by the Board
of Directors of Crouse Cartage depending upon profitability of Crouse
Cartage. Any discretionary funds contributed to the Non-union Plan will be
invested 100% in Anuhco Common Stock.
Crouse Cartage had a defined benefit pension plan covering employees not
covered under collective bargaining agreements. Crouse Cartage terminated
this plan effective December 31, 1992, at which time all benefit accruals
ceased. Benefits under the plan were based on years of service and the
employees' compensation during the last three years of employment. All par-
ticipants who had met this plan's requirements, who had been entered into
this plan and who were actively employed by Crouse Cartage as of the
termination date, are 100% vested in their accrued plan benefits. Crouse
Cartage has purchased an annuity contract to satisfy the individual accrued
plan benefits as of the termination date. Crouse Cartage distributed excess
plan assets to plan participants as additional annuities or through rolling
them into the Non-union Plan as elected by individual participants. Final
settlement of the terminated plan occurred in 1994 with the plan assets being
sufficient to settle all termination obligations and expenses, including the
participants' accrued plan benefits.
Pension expense, exclusive of the multi-employer pension plans, was
$608,919, $80,000, and $0 for the years 1994, 1993 and 1992, respectively.
The accompanying consolidated balance sheet includes a pension liability of
$420,325 and $152,158 as of December 31, 1994 and 1993, respectively.
Profit Sharing
In September, 1988, the employees of 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% of Crouse
Cartage's income before income taxes (excluding extraordinary items and gains
or losses on the sale of assets) in return for a 15% reduction in their
wages. The Plan calls for profit sharing distributions to be made on a
quarterly basis. The Plan was recertified in 1991 and 1994, and shall
continue in effect through March 31, 1998, or until a replacement Collective
Bargaining Agreement is reached between the parties, whichever is the later.
The accompanying consolidated balance sheet includes profit sharing accruals
of $1,383,658 and $986,583 for 1994 and 1993, respectively. The accompanying
consolidated statement of income includes profit sharing expense of
$5,955,794, $3,307,862, and $3,071,057 for 1994, 1993 and 1992, respectively.
401(k) Plan
Effective January 1, 1990, Crouse Cartage established a salary deferral
program under Section 401(k) of the Internal Revenue Code ("the Code"). To
date, participant contributions to the 401(k) plan have not been matched with
Company contributions. All employees of the Company are eligible to
participate in the 401(k) plan after they attain age 21 and complete one year
of qualifying employment.
3. Insurance Coverage
Claims and insurance accruals reflect accrued insurance premiums and the
estimated cost of incurred claims for cargo loss and damage, bodily injury
and property damage and workers' compensation not covered by insurance.
Workers' compensation expense is included in "Salaries, wages and fringe
benefits" in the accompanying consolidated statement of income.
The Company's public liability and property damage, cargo and workers'
compensation premiums are subject to retrospective adjustments based on
actual incurred losses. The actual adjustments normally are not known for at
least one year; however, based upon a review of the preliminary compilation
of losses incurred through December 31, 1994, management does not believe any
material adjustment will be made to the premiums paid or accrued at that
date.
In connection with its public liability and property damage, cargo and
workers' compensation insurance coverage, the Company has an irrevocable
letter of credit ("LOC"), which as of the date of this report, was $750,000.
The LOC, required by the Company's insurance provider, is deemed to be
automatically extended unless notice of termination is given. The fee for
the LOC is .75% of the LOC amount.
4. Long-Term Debt
<TABLE>
Long-term debt was as follows, as of December 31:
<CAPTION>
1994 1993
(In Thousands)
<S> <C> <C>
Convertible Note, due October 31, 1995, with
interest varying at prime rate minus 1%
(7.5% at December 31, 1994)............... $ -- $ 1,860
Revolving Credit Agreement................... -- --
-- 1,860
Less - Current maturities.................... -- --
$ -- $ 1,860
</TABLE>
The Convertible Note was payable to sellers of Crouse Cartage, including
certain employees, Crouse Cartage officers, and a director and officer of
Anuhco.
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 borrowing base, as defined in such
agreement. Based on the value of its revenue equipment, such borrowing base
exceeds $2,500,000 at December 31, 1994. This agreement was amended and
superseded on September 30, 1991, and Anuhco was added as a guarantor. In
July, 1994 the term was extended to June 30, 1996. There was no outstanding
balance on this revolving line of credit at December 31, 1994 or 1993.
On the last day of each calendar month through the term of the agreement,
Crouse Cartage is required to pay to the bank equal payments of principal,
each in an amount equal to one forty-eighth (1/48) of the highest unpaid
principal balance of the previous 12-month period. The agreement provides
for interest on borrowings at the bank's prime rate. The effective rate at
December 31, 1994 was 8.5%. The agreement can be terminated by the bank on
six months notice or by Crouse Cartage on 30 days notice after full payment
of any debt to the bank. The terms of the agreement require the maintenance
of a minimum shareholder's equity and contain restrictions on declaration and
payment of dividends, acquisition of Crouse Cartage stock, loans to officers
or employees and type of investments. The Company was in compliance with all
such restrictions at December 31, 1994.
5. Common Stock
In accordance with a resolution to amend Anuhco's Certificate of
Incorporation, duly prepared and adopted at the Company's 1993 annual meeting
of its sharheolders, the capital stock of Anuhco was changed from stock
without par value to $0.01 par value per share effective June 1, 1993. Such
change has no impact on total shareholders' equity but did require a
reclassification of a portion of capital stock to paid-in capital.
An Incentive Stock Option Plan was adopted in 1983 which provides that
options for shares of Anuhco Common Stock may be granted to officers and key
employees at fair market value of the stock at the time such options are
granted. This plan terminated under its provisions in May, 1993 and no
further options may be granted. At December 31, 1994 options for 25,000
shares were outstanding and exercisable at an average option price of $2.44
per share. These options are exercisable over a period through 1997.
An Incentive Stock Plan was adopted in 1992 which provides that options for
shares of Anuhco Common Stock shall be granted to directors, and may be
granted to officers and key employees at fair market value of the stock at
the time such options are granted. At December 31, 1994 options for 127,850
shares were outstanding at an average option price of $4.79 per share and
options for 48,150 shares were exercisable. The remaining outstanding
options will become exercisable over a period through 2004.
6. Income Taxes
The Company accounts for income taxes in accordance with the liability
method as required in the Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes". The impact of significant temporary
differences and carryforwards representing deferred tax assets and
liabilities is determined utilizing the enacted tax rates expected to be in
effect when such differences reverse.
<TABLE>
Deferred tax liabilities (assets) are comprised of the following at
December 31:
<CAPTION>
1994 1993
(In Thousands)
<S> <C> <C>
Liabilities:
Property and equipment, princi-
pally due to differences in
depreciation................... $ 1,118 $ 1,155
Assets:
Employee benefits............... ( 344) ( 362)
Claims accruals and other....... ( 106) ( 61)
Reserve for doubtful accounts... ( 177) ( 154)
Net operating loss carryforward. -- (15,015)
Discontinued operations......... (3,741) --
Deferred tax assets........... (4,368) (15,592)
Valuation allowance............. -- 14,437
Net deferred tax asset........ $(3,250) $ --
</TABLE>
At December 31, 1993 the Company had $32 million of net operating loss
carryforwards and $2 million of tax credit carryforwards which will be
available for Federal income tax purposes. The Company utilized
substantially all carryforwards during 1994, but anticipates AFS generating
additional tax loss during 1995. The Net Deferred Tax Asset of $3.25 million
has been recorded as a portion of the AFS Net Assets (see Note 8).
The following is a reconciliation of the statutory Federal income tax rate
to the effective income tax rate.
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Federal statutory income tax rate......... 35.0% 35.0% 34.0%
State income tax rate, net................ 7.9 7.9 7.9
Net operating losses...................... (42.9) (42.9) (41.9)
Effective income tax rate................. 0.0% 0.0% 0.0%
</TABLE>
No net provision for income tax has been made for the years ended December
31, 1994, 1993 or 1992 due to significant tax losses and related
carryforwards from the discontinued operations during those years.
7. Contingencies and Commitments
The Company is party to certain other claims and litigation arising in the
ordinary course of business. In the opinion of management, the outcome of
such claims and litigation will not materially affect the Company's financial
position.
Payments are made to tractor owner-operators under various short-term lease
agreements for the use of revenue equipment. These lease payments, which
totaled $10,551,443, $9,554,580, and $9,416,968 for 1994, 1993 and 1992,
respectively, are primarily based on miles traveled or on a percent of
revenue generated through the use of the equipment.
Future commitments for the purchase of operating property totaled
approximately $1.2 million at December 31, 1994.
8. AFS Net Assets
Under the provisions of the Joint Plan, AFS is responsible for the
administration of pre-July 12, 1991 creditor claims and conversion of assets
owned before that date. As claims are allowed and cash is available,
distributions to the creditors occur. The Joint Plan also provides for
distributions to Anuhco as unsecured creditor distributions occur in excess
of 50% of allowed claims in accordance with the following table. Such
distributions were recognized as "Income from Discontinued Operations".
<TABLE>
<CAPTION>
Cumulative Unsecured
Creditors' Distribution Anuhco Participation
<S> <C>
50.01 - 70% $100,000 per percentage point
70.01 - 80% $ 25,000 per percentage point
80.01 - 130% $250,000 per percentage point
</TABLE>
Anuhco also receives the full benefit of any remaining assets through its
ownership of AFS stock, if unsecured creditors receive distributions,
including interest, equivalent to 130% of their claims.
On November 3, 1994 Anuhco, through its subsidiary AFS, collected a
judgment against Westinghouse Electric Corporation ("WEC") for failure to
provide financing pursuant to a loan commitment issued by WEC on June 3,
1988. As a result, AFS declared a distribution under the Joint Plan to
unsecured creditors and Anuhco. Such distribution resulted in the full
payment of all AFS's resolved claims and liabilities, and a transfer of $7.5
million of cash to Anuhco on November 16, 1994. Subsequent to this
distribution, and based upon a review of the AFS reserves for its unresolved
claims and liabilities, the net assets of AFS were estimated to be $46.1
million. On December 28, 1994 AFS paid a $25 million dividend to Anuhco.
The remaining AFS net assets are depicted in the following table. The
liquidation of these assets and settlement of these liabilities is
anticipated to be substantially completed during 1995.
<TABLE>
<CAPTION>
Amount
(In Thousands)
<S> <C>
Cash and Temporary Cash Investments................... $22,320
Accounts Receivable, net.............................. 5,130
Real Property, at estimated net realizable value...... 649
Deposits, Prepayments and Other....................... 2,286
Deferred Income Taxes................................. 3,250
Priority Wages, Taxes and Other....................... (8,750)
Unsecured Liabilities................................. (3,790)
Net Assets............................................ $21,095
</TABLE>
Assets and Liabilities - Assets, including real property remaining at
December 31, 1994, are stated at estimated net realizable value. Certain
contingent assets have been identified and are described in the Disclosure
Statement to the Joint Plan.
AFS has provided notice to all known creditors and the deadline for filing
claims to be resolved under the Joint Plan has expired. Creditors are barred
from submitting claims after the deadline. Claims filed by the creditors are
significantly in excess of recorded liabilities. AFS is in the process of
investigating these claims, however until this process is completed the
amount of liabilities cannot be ascertained. The ultimate resolution of the
amounts, validity and priority of recorded liabilities and other claims is
uncertain at this time. Accordingly, liabilities are reflected at estimated
amounts due or are based on claims filed.
Distributions - The initial distribution of 40% was made on August 15, 1991
and on February 18, 1992, September 11, 1992, April 15, 1993 October 13,
1993, April 29, 1994 and November 16, 1994, AFS made interim distributions
under the Joint Plan at the rate of 20%, 20%, 10%, 5%, 5%, and 30%
respectively, of each allowed unsecured claim. Anuhco's participation in
these distributions were $1 million, $1.25 million, $2.5 million, $1.25
million, $1.25 million, and $7.5 million, respectively. A portion of these
distributions to Anuhco was applied as payment of a note payable to AFS. To
date AFS has distributed a total of 130% on allowed claims which is the
maximum allowed under the Joint Plan.
SUPPLEMENTAL FINANCIAL INFORMATION
Summary of Quarterly Financial Information (Unaudited):
Anuhco's quarterly operating results, as well as those of the motor
carrier industry in general, fluctuate with the seasonal changes in tonnage
levels and with changes in weather related operating conditions. Inclement
weather conditions during the winter months adversely affect freight
shipments and increase operating costs. Historically, Anuhco has achieved
its best operating results in the second and third quarters when adverse
weather conditions have a lessor effect on operating efficiency.
Discontinued operations reflects the continuing winddown of the AFS and
related estates. Included in Income from Discontinued Operations for the
fourth quarter are the $7.5 million distribution under the Joint Plan, the
$25 million dividend paid to Anuhco by AFS, and the $21.1 million of AFS net
assets (see Note 8 to the consolidated financial statements).
<TABLE>
The following table sets forth selected unaudited financial information for
each quarter of 1994 and 1993 (in thousands, except per share amounts).
<CAPTION>
1994
First Second Third Fourth Full Yr.
<S> <C> <C> <C> <C> <C>
Revenue..................... $21,184 $25,174 $24,913 $24,501 $95,772
Operating Income............ 742 1,844 1,441 1,194 5,221
Nonoperating Income (Expense) 10 31 82 151 274
Income from Continuing
Operations................ 752 1,875 1,523 1,345 5,495
Income from Discontinued
Operations................ -- 1,250 -- 53,595 54,845
Net Income.................. 752 3,125 1,523 54,940 60,340
Income per Share from
Continuing Operations..... 0.10 0.25 0.20 0.18 0.73
Income per Share from
Discontinued Operations... -- 0.16 -- 7.10 7.27
Net Income per Share........ 0.10 0.41 0.20 7.28 8.00
</TABLE>
<TABLE>
<CAPTION>
1993
First Second Third Fourth Full Yr.
<S> <C> <C> <C> <C> <C>
Revenue..................... $18,005 $18,896 $19,816 $20,171 $76,888
Operating Income............ 322 627 869 677 2,495
Nonoperating Income (Expense) 13 34 ( 6) 137 178
Income from Continuing
Operations................ 335 661 863 814 2,673
Income from Discontinued
Operations................ -- 2,500 -- 1,250 3,750
Net Income.................. 335 3,161 863 2,064 6,423
Income per Share from
Continuing Operations..... 0.04 0.09 0.11 0.11 0.35
Income per Share from
Discontinued Operations... -- 0.33 -- 0.17 0.50
Net Income per Share........ 0.04 0.42 0.11 0.28 0.85
</TABLE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
This Item 9 is not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
Pursuant to General Instruction G(3), the information required by this Item
10 is hereby incorporated by reference from the Anuhco, Inc. Proxy Statement
for Annual Meeting of Shareholders to be held on May 23, 1995, which the
Registrant will file pursuant to Regulation 14-A. (See Item 4, included
elsewhere herein, for a listing of Executive Officers of the Registrant).
Item 11. Executive Compensation
Pursuant to General Instruction G(3), the information required by this Item
11 is hereby incorporated by reference from the Anuhco, Inc. Proxy Statement
for Annual Meeting of Shareholders to be held on May 23, 1995, which the
Registrant will file pursuant to Regulation 14-A.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Pursuant to General Instruction G(3), the information required by this Item
12 is hereby incorporated by reference from the Anuhco, Inc. Proxy Statement
for Annual Meeting of Shareholders to be held on May 23, 1995, which the
Registrant will file pursuant to Regulation 14-A.
Item 13. Certain Relationships and Related Transactions
Pursuant to General Instruction G(3), the information required by this Item
13 is hereby incorporated by reference from the Anuhco, Inc. Proxy Statement
for Annual Meeting of Shareholders to be held on May 23, 1995, which the
Registrant will file pursuant to Regulation 14-A.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
(a)1. Financial Statements
Included in Item 8, Part II of this Report -
Consolidated Balance Sheet at December 31, 1994 and 1993
Consolidated Statement of Income for the years ended
December 31, 1994, 1993 and 1992
Consolidated Statement of Cash Flows for the years
ended December 31, 1994, 1993 and 1992
Consolidated Statement of Shareholders' Equity for the
years ended December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
Supplemental Financial Information (Unaudited) -
Summary of Quarterly Financial Information for 1994 and
1993
(a)2. Financial Statement Schedules
Included in Item 14, Part IV of this Report -
Financial Statement Schedules for the three years ended
December 31, 1994:
Section II - Valuation and Qualifying Accounts
Other financial statement schedules are omitted either because of
the absence of the conditions under which they are required or
because the required information is contained in the consolidated
financial statements or notes thereto.
(a)3. Exhibits
2(a) - Fifth Amended Joint Plan of Reorganization of the Registrant
and others and Registrant's Disclosure Statement Relating to
the Fifth Amended Joint Plan of Reorganization. Filed as
Exhibit 28(a) and 28(b) to the Registrant's Form 8-K dated
March 21, 1991.
2(b) - United States Bankruptcy Court order confirming the Fifth
Amended Joint Plan of Reorganization of the Registrant and
others. Filed as Exhibit 28(c) to Registrant's Form 8-K
dated June 11, 1991.
3(a) - 1993 Restated Certificate of Incorporation of the Registrant.
Filed as Exhibit 3 to Registrant's Form 10-Q dated August 4,
1993.
3(b) - By-Laws of the Registrant. Filed as Exhibit 3(b) to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1991 by Amendment No. 1 dated July 30, 1992.
4 - Specimen Certificate of the Common Stock, no par value, of
the Registrant. Filed as Exhibit 4 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1991 by
Amendment No. 1 dated July 30, 1992.
10(a) - Registrant's 1983 Incentive Stock Option Plan. Filed as
Exhibit 10(a) to Registrant's Registration Statement No. 2-
83536, effective May 22, 1986.
10(b) - Form of Indemnification Agreement with Directors and
Executive Officers. Filed as Exhibit 10(k) to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1986.
10(c) - Trust and Security Agreement by and between American Freight
System, Inc. (Grantor) and The Merchants Bank (Trustee),
dated July 11, 1991. Filed as Exhibit 10(c) to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1991 by Amendment No. 1 dated July 30, 1992.
10(d) - Agreement by and between Registrant (Buyer) and owners of the
outstanding capital stock of CC Investment Corporation
(Sellers). Filed as Exhibit 10 to Registrant's Form 8-K
dated August 9, 1991.
10(e) - Incentive Compensation Agreement by and between Registrant
and Lawrence D. Crouse, and Employment Agreement by and
between Crouse Cartage Company and Lawrence D. Crouse. Filed
as Appendices F. and G. to Exhibit 28(a) to Registrant's Form
8-K dated September 19, 1991.
10(f) - Secured Revolving Credit Agreement for a revolving credit
facility in the amount of $2,500,000 by and between Crouse
Cartage Company and Bankers Trust Company of Des Moines,
Iowa. Filed as Exhibit 10(i) to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1991 by
Amendment No. 1 dated July 30, 1992.
10(g) - Registrant's 1992 Incentive Stock Plan. Filed as Exhibit
10(j) to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992.
22* - List of all subsidiaries of Anuhco, Inc., the state of
incorporation of each such subsidiary, and the names under
which such subsidiaries do business.
24* - Consent of Independent Public Accountant.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended December 31,
1994.
* Filed herewith.
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
Schedule II - Valuation and Qualifying Accounts
<CAPTION>
Balance Additions
at Charged Charged to Balance
Beginning to Other Deduc- at End
Description of Year Expense Accounts tions1 of Year
(In Thousands)
<S> <C> <C> <C> <C> <C>
Allowance for doubtful accounts
(deducted from accounts receivable)
Year Ended December 31 -
1994........ $358 $150 $ - $( 96) $412
1993........ 314 172 - (128) 358
1992........ 279 155 - (120) 314
</TABLE>
1 Deduction for purposes for which reserve was created.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: March 10, 1995 By /s/ John P. Bigger
John P. Bigger,
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ John P. Bigger President and Chief Executive Officer
John P. Bigger (Principal Executive Officer)
/s/ John P. Bigger Treasurer and Chief Financial Officer
John P. Bigger (Principal Financial and Accounting
Officer)
/s/ Joe J. Brown /s/ Roy R. Laborde
Joe J. Brown, Director Roy R. Laborde, Chairman of the
Board of Directors
/s/ William D. Cox /s/ Eleanor B. Schwartz
William D. Cox, Director Eleanor B. Schwartz, Director
/s/ Lawrence D. Crouse /s/ Walter P. Walker
Lawrence D. Crouse, Director Walter P. Walker, Director
/s/ Donald M. Gamet
Donald M. Gamet, Director
March 10, 1995
Date of all signatures
Registrant's Proxy Statement for Annual Meeting of Shareholders to be held in
1995 and Annual Report will be mailed to security holders at a later date.
Copies of such material will be furnished to the Securities and Exchange
Commission when it is sent to security holders.
<TABLE>
Exhibit 22
<CAPTION>
Subsidiaries of Anuhco, Inc. State of Incorporation
<S> <C>
Crouse Cartage Company Iowa
CC Investment Corporation Iowa
American Freight System, Inc. Delaware
</TABLE>
(All companies do business under same name unless otherwise indicated).
<PAGE>
Exhibit 24
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 10-K into the Company's previously
filed Registration Statements for the Anuhco, Inc. 1992 Incentive Stock
Plan, File No. 33-51494 and the American Carriers, Inc. 1983 Incentive
Stock Option Plan, File No. 2-86915.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Kansas City, Missouri
March 2, 1995
<PAGE>
