UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-12321
ANUHCO, INC.
(Exact name of Registrant as specified in its charter)
Delaware 46-0278762
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
8245 Nieman Road, Suite 100
Lenexa, Kansas 66214
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (913) 859-0055
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, as of the latest
practicable date.
Class Outstanding at August 9, 1996
Common stock, $0.01 par value 6,631,393 Shares
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
For the Three Months Ended June 30,
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
1996 1995
<S> <C> <C>
Operating Revenues $28,345 $24,569
Operating Expenses 27,919 24,086
Operating Income 426 483
Nonoperating Income (Expense)
Interest Income 217 546
Interest Expense (14) (63)
Gain on sale of property and equipment, net 6 22
Other, net -- --
Total nonoperating income (expense) 209 505
Income from Continuing Operations
before Income Taxes 635 988
Income Tax Provision 273 425
Income from Continuing Operations 362 563
Income from Discontinued Operations (Note 6) -- 27
Net Income $ 362 $ 790
Average Common Shares Outstanding (Note 5) 6,892 7,555
Net Income Per Share from Continuing
Operations $0.05 $0.07
Net Income Per Share from Discontinued
Operations $0.00 $0.03
Net Income Per Share $0.05 $0.10
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
</TABLE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
Consolidated Statements of Income
For the Six Months Ended June 30,
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
1996 1995
<S> <C> <C>
Operating Revenues $ 53,561 $49,200
Operating Expenses 52,941 47,748
Operating Income 620 1,452
Nonoperating Income (Expense)
Interest Income 608 1,158
Interest Expense (17) (66)
Gain on sale of property and equipment, net 41 42
Other, net 2 1
Total nonoperating income (expense) 634 1,135
Income from Continuing Operations
before Income Taxes 1,254 2,587
Income Tax Provision 539 1,113
Income from Continuing Operations 715 1,474
Income from Discontinued Operations (Note 6) -- 595
Net Income $ 715 $2,069
Average Common Shares Outstanding (Note 5) 7,014 7,554
Net Income Per Share from Continuing
Operations $0.10 $0.19
Net Income Per Share
from Discontinued Operations $0.00 $0.08
Net Income Per Share $0.10 $0.27
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
</TABLE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share amounts)
<CAPTION>
June 30,1996 Dec.31,1995
(Unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and temporary cash investments $ 6,073 $6,617
Short term investments (Note 6) 10,583 27,366
Freight accounts receivable, less allowance
for doubtful accounts of $435 and $409,
respectively 9,594 7,952
Finance accounts receivable, less allowance
for doubtful accounts of $663 and $351,
respectively 38,565 8,290
Current deferred tax asset 346 177
Other current assets 2,065 1,291
AFS net assets (Note 6) 16,490 16,840
Total current assets 83,716 68,533
Operating Property, at Cost
Revenue equipment 20,731 18,944
Land 3,099 2,826
Structures and improvements 8,869 7,534
Other operating property 4,934 4,643
37,633 33,947
Less accumulated depreciation (18,696) (17,724)
Net operating property 18,937 16,223
Intangibles and Other Assets (Note 2) 10,004 3,670
$112,657 $ 88,426
Liabilities and Shareholders' Equity
Current Liabilities:
Secured notes payable (Note 4) $24,297 $ --
Accounts payable 3,706 1,041
Accrued payroll and fringes 5,856 5,203
Claims and insurance accruals 277 224
Accrued and current deferred income taxes 293 288
Other accrued expenses 932 847
Total current liabilities 35,361 7,603
Deferred Income Taxes 624 543
Shareholders' Equity (Note 5)
Preferred stock with $0.01 par value,
authorized 1,000,000 shares, none
outstanding -- --
Common stock with $0.01 par value,
authorized 13,000,000 shares, out-
standing 6,645,693 and 7,139,970
shares, respectively 76 76
Paid-in capital 5,470 5,357
Retained earnings 79,105 78,390
Treasury stock, 943,877 and 417,100
shares, respectively, at cost (7,979) (3,543)
Total shareholders' equity 76,672 80,280
$112,657 $88,426
<FN>
The accompanying notes to consolidated financial statements
are an integral part of this statement.
</TABLE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
(In thousands)
(Unaudited)
<CAPTION>
1996 1995
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $ 715 $ 2,069
Adjustments to reconcile net income
cash provided by operating
activities
Gain on sale of assets (41) (42)
Depreciation and amortization 1,678 1,335
Provision for uncollectible accounts 364 109
Deferred tax provision 136 --
Net increase (decrease) from change
in other working capital items
affecting operating activities (247) (831)
Income from discontinued operations -- (595)
2,605 2,045
Cash Flows from Investing Activities
Purchase of finance subsidiary
(Note 2) (11,979) (11,216)
Purchase of operating property (3,998) (3,772)
Origination of finance accounts
receivables (53,556) (5,510)
Sale of finance accounts receivables 20,885 4,205
Collection of owned finance accounts
receivables 32,444 2,481
Collection of long-term receivable -- 1,270
Purchases of short-term investments (10,515) (25,747)
Maturities of short-term investments 27,298 28,588
579 (9,701)
Cash Flows from Financing Activities
Payments to acquire treasury stock (4,385) --
Borrowings on credit agreements, net 522 --
Other 135 15
(3,728) 15
Net Increase (Decrease) in Cash and
Temporary Cash Investments (544) (7,641)
Cash and Temporary Cash Investments
at beginning of period 6,617 11,365
Cash and Temporary Cash Investments at
end of period $6,073 $3,742
Cash Paid During the Period for
Interest $ 534 --
Income Tax -- $ 353
<FN>
The accompanying notes to consolidated financial statements are
an integral part of these statements.
</TABLE>
<TABLE>
ANUHCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In Thousands)
<CAPTION>
Total
Share
Common Paid-In Retained Treasury holders'
Stock Capital Earnings Stock Equity
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $ 76 $5,339 $72,004 $ -- $77,419
Income from continuing operations -- -- 2,810 -- 2,810
Income from discontinued operations -- -- 3,576 -- 3,576
Issuanace of shares under Incentive Stock Plan -- 18 -- -- 18
Purchase of 417,100 shares of common stock -- -- -- (3,543) (3,543)
Balance at December 31, 1995 76 5,357 78,390 (3,543) 80,280
Income from continuing operations -- 715 -- 715
Income from discountinued operations -- -- -- -- --
Issuance of shares under Incentive Stock Plan -- 113 -- (51) 62
Purchase of 521,300 shares of common stock -- -- -- (4,385) (4,385)
Balance at June 30, 1996 (unaudited) $ 76 $5,470 $79,105 $(7,979) $ 76,672
<FN>
The accompanying notes to consolidated financial statements are
an integral part of these statements.
</TABLE>
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 11, 1996, 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. Acquisition of Premium Finance Subsidiaries
On May 31, 1995, Anuhco completed the acquisition of all of the
issued and outstanding stock of Agency Premium Resource, Inc. and
subsidiary ("APR"). The purchase price, together with payments
for certain services to be rendered by the sellers after closing,
was approximately $11.3 million. In addition to the Stock
Purchase Agreement by which Anuhco acquired all of the APR stock,
Anuhco entered into a consulting agreement with the former
shareholder of APR, and an employment agreement with APR's
president and chief executive officer. Under the former, Anuhco
is entitled to consult with the former majority shareholder
regarding APR for three years. Under the latter, APR is entitled
to the continuation of the services of the president and chief
executive officer for five years. This transaction was accounted
for as a purchase. Anuhco utilized a portion of its available
cash and investments to consummate the purchase. The terms of
the acquisition and the purchase price resulted from negotiations
between Anuhco and the APR shareholders.
APR offers insurance premium financing and related services
through approved insurance agencies, primarily throughout the
midwestern United States. Its wholly owned subsidiary, Agency
Services, Inc., provides motor vehicle report services throughout
the same geographic area.
In connection with the purchase of APR, Anuhco recorded
goodwill of $2.4 million, which will be amortized on the straight-
line basis over 15 years, and a software and service agreement of
$1.0 million, which will be amortized over 5 years.
On March 29, 1996, Anuhco completed the acquisition of all of
the issued and outstanding stock of Universal Premium Acceptance
Corporation and UPAC of California, Inc. (together referred to as
"UPAC"). UPAC offers short-term collateralized financing of
commercial and personal insurance premiums through approved
insurance agencies in over 30 states throughout the United
States. At March 31, 1996, UPAC had outstanding net finance
receivables of approximately $30 million. This transaction was
accounted for as a purchase. Anuhco utilized a portion of its
available cash and short-term investments to consummate the
purchase at a price of approximately $12 million. The terms of
the acquisition and the purchase price resulted from negotiations
between Anuhco and William H. Kopman, the former sole shareholder
of UPAC. In connection with the purchase of UPAC, based on a
preliminary allocation of the purchase price, Anuhco has recorded
goodwill of $6.3 million, which will be amortized on the straight-
line basis over 25 years.
In addition to the Stock Purchase Agreement by which Anuhco
acquired all of the UPAC stock, Anuhco entered into a consulting
agreement with Mr. Kopman. Under the consulting agreement,
Anuhco is entitled to consult with Mr. Kopman on industry
developments as well as UPAC operations through December 31,
1998. In addition to retaining the services of Mr. Kopman under
a consulting agreement, existing executive management personnel
of UPAC have been retained under multiyear employment agreements.
Anuhco's acquisition of UPAC, in combination with its earlier
acquisition, gives the Company a nationwide presence in this
financial services industry.
The following reflects the operating results of Anuhco for the
second quarter ended June 30, 1995 and the six months ended June
30, 1996 and 1995, assuming the acquisitions occurred as of the
beginning of each of the respective periods:
<TABLE>
Pro Forma Operating Results
(Unaudited)
(In thousands, except per share data)
<CAPTION>
Second
Quarter Six Months
1995 1996 1995
<S> <C> <C> <C>
Operating Revenues $26,636 $54,794 $53,181
Income from Continuing Operations 675 700 1,613
Income from Discontinued Operations 227 -- 595
Net Income $ 902 $ 700 $ 2.208
Net Income Per Share:
Continuing operations $ 0.09 $0.10 $ 0.21
Discontinued Operations 0.03 0.00 0.08
Total $ 0.12 $0.10 $ 0.29
</TABLE>
The pro forma results of operations are not necessarily
indicative of the actual results that would have been obtained
had the acquisitions been made at the beginning of the respective
periods, or of results which may occur in the future.
3. Profit Sharing
In September 1988, the employees of Crouse Cartage Company
("Crouse Cartage"); a wholly owned subsidiary of Anuhco, 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.
Plan distributions are 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 of the Collective
Bargaining Agreement is reached between the parties, whichever is
the later. The accompanying consolidated balance sheet as of
June 30, 1996 includes an accrual for profit sharing costs of
$724,000. The accompanying consolidated statements of income
includes profit sharing costs of $724,000 and 1,022,000 for the
second quarter of 1996 and 1995, respectively, and 1,189,000 and
2,187,000 for the first six months of 1996 and 1995,
respectively.
4. Financing Agreements
In October, 1995, the Company, APR, and APR Funding
Corporation, a wholly owned subsidiary of APR, entered into an
extendible three year securitization agreement whereby undivided
interests in a designated pool of finance accounts receivable can
be sold on an ongoing basis. The maximum allowable amount of
receivables to be sold under the agreement is $30,000,000. This
agreement replaced a similar agreement with another financial
institution that was entered into in July, 1993. The purchaser
permits principal collections to be reinvested in new financing
agreements. APR had securitized receivables of $17.2 million at
June 30, 1996. The cash flows from the sale of receivables are
reported as investing activities in the accompanying consolidated
statement of cash flows. The securitized receivables are
reflected as sold in the accompanying balance sheet. The
proceeds from the initial securitization of the receivables were
used to pay off the previous securitized receivables under the
prior agreement.
APR did not record a gain or loss on the sales as the costs of
receivables sold approximated the proceeds. The terms of the
securitization agreement require that APR maintain a default
reserve at specified levels which serves as collateral. At June
30, 1996, approximately $2.1 million of owned finance receivables
served as collateral under the default reserve provision. APR
continues to service the securitized receivables for which it
receives a servicing fee.
As of June 30, 1996, UPAC had outstanding secured notes payable
of $22.7 million under a restated secured credit agreement with
three banks dated as of July 29, 1994, as amended on August 14,
1995 and April 3, 1996. The restated secured credit agreement is
secured by UPAC receivables, and provides an aggregate maximum
principal amount outstanding not to exceed the lesser of
$30,000,000 or 85% of the qualified notes assigned to the banks
and the sum of the outstanding principal of and the accrued
interest on, the additional obligations to insurance agents with
whom UPAC does business evidenced by promissory notes. This
credit agreement, as amended, is scheduled to expire in the
fourth quarter of 1996. Borrowings under the credit agreement
not subject to the LIBOR (London Inter Bank EuroDollar Market)
Pricing Option, $1.7 million at June 30, 1996, are at the bank's
prime rate, which was 8.25% at June 30, 1996. Borrowings under
the LIBOR Pricing Option, $21 million at June 30, 1996, are at
the LIBOR rate plus 2.00% for each applicable interest period, an
average effective rate of 7.45% at June 30, 1996. The
acquisition of UPAC by Anuhco resulted in certain technical
events of default of the secured credit agreement which were
waived by the lender. UPAC's domestic banking system provides
for the daily replenishment of major bank accounts for check
clearing requirements. Accordingly, outstanding checks of
$1,639,000 at June 30, 1996 are also included in secured notes
payable.
In September 1988, Crouse Cartage entered into a multi-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. In September, 1995
the term of this agreement was extended to June 30, 1997. There
was no outstanding balance on this revolving line of credit at
June 30, 1996.
5. Shareholders' Equity
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 6,891,740 and 7,013,878 for the
quarter and six months ended June 30, 1996, and 7,555,234 and
7,554,424 for the quarter and six months ended June 30, 1995,
respectively.
On June 26, 1995, the Company adopted a program to repurchase
up to 10% of its outstanding shares of common stock. During the
second quarter of 1996, the Company completed this initial
repurchase program and expanded the number of shares authorized
to be repurchased by an additional 10% of its then outstanding
shares. During the second quarter and first six months of 1996,
the Company repurchased an additional 502,600 shares and 521,300
shares of common stock, respectively, bringing the total shares
repurchased to 938,400 shares, or 12.4% of outstanding shares
before initiating the program, at a total cost of $7,928,000.
6. AFS Net Assets
Under the provisions of a Joint Plan of Reorganization ("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
provided for distributions to Anuhco as unsecured creditor
distributions occurred in excess of 50% of allowed claims.
Anuhco also will receive the full benefit of any remaining assets
of AFS through its ownership of AFS stock, after unsecured
creditors received distributions, including interest, equivalent
to 130% of their claims.
AFS has made the full payment of all it's resolved claims and
liabilities. The remaining AFS net assets are estimated to have
net realizable value of $16.5 million. The primary assets
include approximately $14.4 million in cash and investments.
Gross unresolved claims, primarily related to workers'
compensation indemnification issues, are approximately $4
million. In July 1996, AFS paid a dividend of $8.5 million to
Anuhco. This dividend was paid from the excess cash and
investments of AFS and did not result in the recognition of
additional income from discontinued operations.
AFS is in the process of resolving 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, AFS net assets reflect
estimated amounts due on such liabilities and claims.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Second quarter and six months ended June 30, 1996 compared to the
second quarter and six months ended June 30, 1995
With the acquisition of APR on May 31, 1995, and UPAC on March
29, 1996 Anuhco now operates in two distinct industries;
transportation, through its subsidiary, Crouse Cartage; and
financial services, through its subsidiaries, APR and UPAC.
Transportation
Operating Revenue - The changes in transportation operating
revenue are summarized in the following table (in thousands):
<TABLE>
<CAPTION>
Qtr. 2 1996 Six Months 1996
vs. vs.
Qtr. 2 1995 Six Months 1995
<S> <C> <C>
Increase (decrease) from:
Increase in LTL tonnage $3,357 $3,872
Decrease in LTL revenue per
hundredweight (1,154) (1,826)
Decrease in truckload revenues (220) (407)
Net increase (decrease) $1,983 $1,639
</TABLE>
Less-than-truckload ("LTL") operating revenues rose by 11.7%
and 5.3% in the second quarter and first six months of 1996,
respectively, as compared to the same periods in 1995. In spite
of severe winter weather in the first quarter of 1996 which
management estimates caused a loss of three revenue days in the
quarter, Crouse achieved 17.8% and 10.1% increases in LTL tons
for the second quarter and first half of 1996, respectively, over
the corresponding periods of 1995. The trucking industry,
including Crouse Cartage, continues to be adversely impacted by
the competitive market pressures on freight rates during the
current periods, which reduced Crouse Cartage's LTL revenue yield
by approximately 6.1% and 4.8% for the quarter and six months,
respectively.
Truckload operating revenues were 4.1% and 3.9% lower in the
second quarter and six months as the net result of 5.0% and 5.7%
declines in the number of shipments hauled and 0.9% and 1.8%
increases in revenue per shipment.
Operating Expense - A comparative summary of transportation
operating expenses as a percent of transportation operating
revenue follows:
<TABLE>
<CAPTION>
Percent of Operating Revenue
Second Quarter Six Months
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Salaries, wages and employee benefits 55.7% 55.4% 55.7% 55.6%
Operating supplies and expenses 12.9% 11.5% 13.1% 11.1%
Operating taxes and licenses 2.7% 2.7% 2.9% 2.7%
Insurance and claims 2.1% 2.3% 2.0% 2.2%
Depreciation 2.6% 2.3% 2.6% 2.4%
Purchased transportation 21.2% 21.3% 21.3% 21.7%
Total operating expenses 97.2% 95.5% 97.6% 95.7%
</TABLE>
Crouse Cartage's operating expenses as a percentage of
operating revenue, or operating ratio, rose from 95.5% to 97.2%
for the second quarter and from 95.7% to 97.6% for the first six
months of 1995 as compared to 1996. These increases in Crouse's
operating ratio were primarily the result of increased linehaul,
fuel and maintenance costs caused by the severe winter storms
which occurred in Crouse's operating territory in the first
quarter and the reduction in operating revenue per ton.
Additionally, in the second quarter of 1996 fuel costs have
remained at levels substantially above that experienced in 1995.
In order to maintain its strong relationships with its key
customers the Company has not passed these higher fuel costs on
to its customers through fuel surcharges.
Management expects the difficult economic operating environment
in the transportation industry and the pressure on freight rates
to continue in the short term.* In addition, a 3.7% contractual
increase in union salaries and benefits went into effect on April
1, 1996. *This is a forward-looking statement which involves
risks and uncertainties that are detailed under caption "Forward-
Looking Statements".
Financial Services
In the second quarter and first six months of 1996, APR and
UPAC (since March 29, 1996) financed $36.3 million and $50.5
million in insurance premiums at an average annual yield of
$14.6% and 14.2%, respectively. These operations generated
operating income of $108,000 on net finance charges and fees
earned of $2.1 million for the second quarter of 1996, and
operating income of $128,000 on net finance charges and fees
earned of $3.0 million for the first six months of 1996, after
certain costs incurred on the acquisition and integration of
UPAC.
Other
Primarily as a result of its utilization of cash and short-term
investments for the acquisitions of APR and UPAC since the first
quarter of 1995, Anuhco recorded a substantial decrease in
interest income for the second quarter and six months ended June
30, 1996, from the corresponding periods of 1995. Anuhco's
effective tax rate for the second quarter and six months of 1996
and 1995 was 43%. During the second quarter and six months of
1995, the Company recognized income from discontinued operations
relating to additional deferred tax benefits.
Outlook
The following statements are forward-looking statements, within
the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and as such involve risks and uncertainties
which are detailed below under the caption "Forward-Looking
Statements".
The Company is currently developing a three-year strategic plan
with the goal of growing each of its business segments to be
equal contributors to the Company's earnings per share. In the
transportation segment the plan calls for the Company to continue
to provide and improve upon its already superior service to its
customers in its primary operating territory, while extending its
operations throughout the Midwest. As the Company makes the
strategic investments necessary to support this expansion, the
Company intends to continue to improve the efficiency and
effectiveness of its existing base of operations.
The first step for the financial services segment is the
successful integration of the operations of APR and UPAC. The
continued growth of this operation will involve the expansion of
its licensing and qualifications to include all 50 states. The
financial services segment will also focus on increasing its
market penetration in certain states with substantial population
and industrial base.
In addition to the expansion of its existing operations in each
of its business segments, the Company continues to consider
potential acquisitions which would complement these operations.
Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form
10-Q which are not statements of historical fact constitute
forward-looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended, including,
without limitation, the statements specifically identified as
forward-looking statements in this Form 10-Q. In addition,
certain statements in future filings by the Company with the
Securities and Exchange Commission, in the Company's press
releases, and in oral statements made by or with the approval of
an authorized executive officer of the Company which are not
statements of historical fact constitute forward-looking
statements within the meaning of the Act. Examples of forward-
looking statements include, but are not limited to (i)
projections of revenues, income or loss, earnings or loss per
share, capital expenditures, the payment or non-payment of
dividends, capital structure and other financial items, (ii)
statements of plans and objectives of the Registrant or its
management or Board of Directors, including plans or objectives
relating to the products or services of the Registrant, (iii)
statements of future economic performance, and (iv) statements of
assumptions underlying the statements described in (i), (ii) and
(iii). These forward-looking statements involve risks and
uncertainties which may cause actual results to differ materially
from those in such statements. The following discussion
identifies certain important factors that could affect the
Company's actual results and actions and could cause such results
or actions to differ materially from any forward-looking
statements made by or on behalf of the Company that related to
such results or actions. Other factors, which are not identified
herein, could also have such an effect.
Transportation
Certain specific factors which may affect the Company's
transportation operation include: increasing competition from
other regional and national carriers for freight in the Company's
primary operating territory; increasing price pressure; changes
in fuel prices; labor matters; including changes in labor costs,
and other labor contract issues; and, environmental matters.
Financial Services
Certain specific factors which may affect the Company's
financial services operation include: the performance of
financial markets and interest rates; the performance of the
insurance industry; increasing competition from other premium
finance companies and insurance carriers for finance business in
the Company's key operating states; failure to achieve the
Company's anticipated levels of expense savings from the
integration of APR's and UPAC's administrative functions;
difficulty in integrating the computer and operating systems; the
loss of experienced, trained personnel during the transition
period; the loss of customer identification with the Company as
the businesses are combined; and, the inability to obtain
continued financing at a competitive cost of funds.
General Factors
Certain general factors which could affect both the Company's
transportation operation and the Company's financial services
operation include: changes in general business and economic
conditions; changes in governmental regulation, and; tax changes.
Expansion of these businesses into new states or markets is
substantially dependent on obtaining sufficient business volumes
from existing and new customers in these new markets at
compensatory rates.
The cautionary statements made pursuant to Section 21E of the
Securities Exchange Act of 1934, as amended, are made as of the
date of this Report and are subject to change. The cautionary
statements set forth in this Report are not intended to cover all
of the factors that may affect the Company's businesses in the
future. Forward-looking information disseminated publicly by the
Company following the date of this Report may be subject to
additional factors hereafter published by the Company.
FINANCIAL CONDITION
The Company's financial condition remained strong at June 30,
1996 with over $16 million in cash and investments at the Anuhco
level, as well as approximately $14 million in cash and
investments included in the net assets of AFS. In July 1996, AFS
paid a dividend of $8.5 million to Anuhco from its excess cash
and investments. During the first quarter of 1996 Anuhco
completed the acquisition of UPAC using approximately $12 million
in available funds. In addition, during the first six months of
1996, the Company has purchased $4.0 million of operating
property and equipment, without incurring any long term
indebtedness.
On October 20, 1995 APR entered into a three year agreement
with a receivable purchaser to sell an undivided interest in a
designated pool of receivables. The maximum allowable
receivables to be sold under this agreement is $30 million.
Proceeds from the initial funding of this agreement were utilized
to eliminate all outstanding balances under a prior agreement.
As of June 30, 1996, APR had securitized receivables with an
outstanding balance of $17.2 million. Anuhco serves as guarantor
in certain limited circumstances under this agreement.
UPAC finances its outstanding receivables under a secured
credit agreement dated July 29, 1994, as amended on August 14,
1995 and April 3, 1996, which provides for maximum borrowings of
the lesser of $30 million or 85% of qualified receivables. This
agreement, as amended, is scheduled to expire in the fourth
quarter of 1996. As of June 30, 1996, UPAC had outstanding
secured notes payable under the credit agreement of $22.7
million. The Company is currently evaluating proposals to expand
APR's receivables securitization agreement to include UPAC's
receivables or to replace both financing arrangements within a
combined receivables securitization agreement with UPAC's primary
bank lender, under terms comparable to APR's securitization
agreement.
On June 26, 1995, the Company adopted a program to repurchase
up to 10% of its outstanding shares of common stock. During
the second quarter of 1996 the Company completed this program and
expanded the program to include an additional 10% of its then
outstanding shares. During the second quarter and six months of
1996, respectively, the Company repurchased an additional 502,600
and 521,300 shares of common stock bringing the total shares
repurchased to 938,400, or 12.4% of outstanding shares before
initiating the program, at a total cost of $7,928,000. This
program is being funded from available cash and investments.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings Reference is made to Item 3 of the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1995.
Item 2. Changes in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders
(a) Annual Meeting of Shareholders was held on May 22, 1996.
(b) The nominees for the board of directors previously
reported to the Commission in the Company's Proxy Statement
were re-elected.
(c) The matters voted upon at the Annual Meeting were as
follows:
(1) All eight nominees for director were re-elected as
follows:
<TABLE>
<CAPTION>
Shares Voted
Nominee For Withheld
<S> <C> <C>
John P. Bigger 5,201,246 214,803
William D. Cox 5,277,746 138,303
Lawrence D. ("Larry") Crouse 5,292,546 123,503
Harold C. Hill, Jr. 5,292,771 123,278
Roy R. Laborde 5,292,546 123,503
Timothy P. O'Neil 5,276,746 139,303
Eleanor Brantley Schwartz 5,215,996 200,053
Walter P. Walker 5,215,546 200,503
</TABLE>
(2) The selection of Coopers & Lybrand, L.L.P. as
independent public accountants was ratified with
5,288,040 shares voting for, 90,440 shares voting
against, and 37,569 shares abstaining.
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
19(a)* Report to Shareholders for the Second Quarter, 1996,
dated August 12, 1996.
27 * Financial Data Schedule
* Filed 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/Timothy P. O'Neil
Timothy P. O'Neil, President &
Chief Financial Officer
Date: August 14, 1996
EXHIBIT INDEX
Assigned
Exhibit
Number Description of Exhibit
19(a) Report to Shareholders for the Second
Quarter, 1996, dated August 12, 1996.
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ANUHCO, INC.
CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000719271
<NAME> ANUHCO, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,073
<SECURITIES> 10,583
<RECEIVABLES> 49,257
<ALLOWANCES> 1,098
<INVENTORY> 0
<CURRENT-ASSETS> 83,716
<PP&E> 37,633
<DEPRECIATION> 18,696
<TOTAL-ASSETS> 112,657
<CURRENT-LIABILITIES> 35,361
<BONDS> 0
<COMMON> 76
0
0
<OTHER-SE> 76,596
<TOTAL-LIABILITY-AND-EQUITY> 112,657
<SALES> 0
<TOTAL-REVENUES> 53,561
<CGS> 0
<TOTAL-COSTS> 52,941
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17
<INCOME-PRETAX> 1,254
<INCOME-TAX> 539
<INCOME-CONTINUING> 715
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 715
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
ANUHCO, INC. SECOND QUARTER 1996 REPORT TO SHAREHOLDERS
Anuhco's second quarter 1996 results reflect the continued competitive
pricing market in the transportation industry and the high level of
fuel costs experienced so far this year. Consolidated income from
continuing operations for the second quarter of 1996 was $362,000, or
$0.05 per share, on operating revenue of $28.3 million; compared to
$563,000, or $0.07 per share on operating revenue of $24.6 million
during the same quarter of 1995. The second quarter 1995 results also
included additional income from discontinued operations of $227,000,
or $0.03 per share.
While second quarter operating results for Crouse Cartage Company,
Anuhco's general commodities motor carrier, were down compared to
1995, less-than-truckload ("LTL") tonnage showed a 17.8% improvement.
Second quarter operating income was $737,000 on revenue of $26.2
million versus $1,041,000 on revenue of $24.2 million during 1996 and
1995, respectively. Pressure on freight rates resulting from industry
over-capacity pushed Crouse Cartage's revenue per hundredweight down
6.1% compared to the same quarter of 1995, while continued high fuel
costs contributed to an increase in operating expense.
Agency Premium Resource, Inc. ("APR") and Universal Premium Acceptance
Corporation ("UPAC"), Anuhco's insurance premium finance subsidiaries,
generated operating income of $108,000 on net finance charges and fees
earned of $2.1 million for the second quarter of 1996, after certain
costs incurred on the acquisition and integration of UPAC. The back
office operations of APR and UPAC are expected to be fully integrated
by yearend. While some additional costs will be incurred in this
process over the second half of 1996, the fully integrated operations
of APR and UPAC will provide a nationwide presence and opportunity for
further expansion in this market.
Anuhco completed a program to repurchase up to 10% of its outstanding
shares, 755,700 shares, in May and immediately expanded this program
to include an additional 10% of its then outstanding shares, 681,300
shares. Through June 30, 1996, Anuhco has repurchased 938,400 shares,
or 12.4% of its common stock outstanding at the inception of the
program.
Anuhco continues to maintain a strong cash and investment position of
approximately $16.7 million as of June 30, 1996. In July 1996, AFS,
Anuhco's discontinued operation, paid a dividend of $8.5 million to
Anuhco from its excess cash and investments. After the dividend, AFS
had remaining net assets of approximately $8 million, $6 million of
which is in cash and investments.
Timothy P. O'Neil, Roy R. Laborde,
President Chairman
August 12, 1996
<TABLE>
ANUHCO, INC.
UNAUDITED SUMMARY FINANCIAL STATEMENTS
(in thousands, except per share data)
CONSOLIDATED STATEMENTS OF INCOME
Second Quarter and Six Months Ended June 30, 1996 and 1995
<CAPTION>
Second Quarter Six Months
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Operating Revenues $28,345 $24,569 $53,561 $49,200
Operating Expenses 27,919 24,086 52,941 47,748
Operating Income 426 483 620 1,452
Non-Operating Income 209 505 634 1,135
Income From Continuing Operations
Before Income Taxes 635 988 1,254 2,587
Income Tax Provision 273 425 539 1,113
Income From Continuing Operations 362 563 715 1,474
Income From Discontinued Operations -- 227 -- 595
Net Income $ 362 $ 790 $ 715 $ 2,069
Income Per Share -
Continuing Operations $ 0.05 $ 0.07 $ 0.10 $ 0.19
Discontinued Operations 0.00 0.03 0.00 0.08
Total $ 0.05 $ 0.10 $ 0.10 $ 0.27
Average Common Shares Outstanding 6,892 7,555 7,014 7,554
</TABLE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
06/30/96 12/31/95
<S> <C> <C>
ASSETS
Cash and Short-Term Investments $ 16,656 $33,983
Finance Accounts Receivable, net 38,565 8,290
Other Current Assets 28,495 26,260
Total Current Assets 83,716 68,533
Operating Property, net 18,937 16,223
Intangible and Other Assets 10,004 3,670
$112,657 $88,426
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes Payable, Secured $ 24,297 $ --
Other Current Liabilities 11,064 7,603
Total Current Liabilities 35,361 7,603
Deferred Income Taxes 624 543
Shareholders' Equity 76,672 80,280
$112,657 $88,426
</TABLE>
Anuhco, Inc. 8245 Nieman Road, Suite 100, Lenexa, Kansas 66214
(913) 859-0055
