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, 1998
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-14060
INTRENET, INC.
(Exact name of registrant as specified in its charter)
Indiana 35-1597565
(State or other jurisdiction of (IRS Employer Identification No)
incorporation or organization)
400 TechneCenter Drive, Suite 200, Milford, Ohio 45150
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (513)576-6666
Not Applicable
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock, without par value, 13,550,638 shares issued and
outstanding at August 3, 1998
INTRENET, INC.
FORM 10-Q
JUNE 30, 1998
INDEX
Page
Part I - Financial Information:
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
June 30, 1998 and December 31, 1997 .......... 3
Condensed Consolidated Statements of Operations
Three Months and Six Months Ended .......... 4
June 30, 1998 and 1997
Condensed Consolidated Statement of Shareholders' Equity
Six Months Ended June 30, 1998 .......... 5
Condensed Consolidated Statements of Cash Flows
Three Months and Six Months Ended .......... 6
June 30, 1998 and 1997
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .......... 9
Part II - Other Information:
Item 1. Legal Proceedings .......... 12
Item 2. Changes in Securities .......... 12
Item 3. Defaults Upon Senior Securities.......... 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information .......... 13
Item 6. Exhibits and Reports on Form 8-K......... 13
<TABLE>
INTRENET, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
June 30, 1998 and December 31, 1997
(In Thousands of Dollars)
<CAPTION>
Assets 1998 1997
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,064 $ 598
Receivables, principally freight revenue less
allowance for doubtful accounts of $1,302 in 1998
and $1,110 in 1997 33,933 30,474
Prepaid expenses and other 6,441 4,697
Total current assets 41,438 35,769
Property and equipment, at cost, less accumulated
depreciation 28,803 30,248
Reorganization value in excess of amounts allocated
to identifiable assets, net of accumulated amortization 5,489 5,889
Deferred income taxes, net 2,723 2,723
Other assets 1,509 1,335
Total assets $ 79,962 $ 75,964
Liabilities and Shareholders' Equity
Current liabilities:
Current debt and capital lease obligations $ 5,696 $ 5,167
Accounts payable and cash overdrafts 9,788 7,772
Current accrued claim liabilities 8,195 8,829
Other accrued expenses 7,499 7,525
Total current liabilities 31,178 29,293
Long-term debt and capital lease obligations 22,875 22,401
Long-term accrued claim liabilities 2,800 2,800
Total liabilities 56,853 54,494
Shareholders' equity:
Common stock, without par value; 20,000,000
shares authorized; 13,550,638 and 13,548,138 shares
issued and outstanding, respectively 16,856 16,851
Retained earnings since January 1, 1991 6,253 4,619
Total shareholders' equity 23,109 21,470
Total liabilities and shareholders' equity $ 79,962 $ 75,964
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
INTRENET, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three and Six Months Ended June 30, 1998 and 1997
(Unaudited)
(In Thousands of Dollars, Except Per Share Data)
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Operating revenues $ 66,351 $ 64,507 $ 127,027 $ 122,170
Operating expenses:
Purchased transportation
and equipment rents 29,861 27,443 57,098 51,278
Salaries, wages, and benefits 15,767 15,622 30,231 30,102
Fuel and other operating expenses 11,961 12,765 23,160 25,039
Operating taxes and licenses 2,554 2,534 5,068 5,152
Insurance and claims 1,974 2,199 3,945 4,180
Depreciation 977 1,190 1,964 2,368
Other operating expenses 903 933 1,923 1,635
63,997 62,686 123,389 119,754
Operating income 2,354 1,821 3,638 2,416
Interest expense (643) (770) (1,303) (1,512)
Other expense, net (105) (105) (210) (210)
Earnings before income taxes 1,606 946 2,125 694
Provision for income taxes (360) (232) (491) (232)
Net earnings $ 1,246 $ 714 $ 1,634 $ 462
Earnings per common and common
equivalent share
Basic $ 0.09 $ 0.05 $ 0.12 $ 0.03
Diluted $ 0.09 $ 0.05 $ 0.12 $ 0.03
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
INTRENET, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Shareholders' Equity
For the Six Months Ended June 30, 1998
(Unaudited)
(In Thousands of Dollars)
<CAPTION>
Retained Shareholders'
Common Stock Earnings Equity
Shares Dollars
<S> <C> <C> <C> <C>
Balance, December 31, 1997 13,548,138 $ 16,851 $ 4,619 $ 21,470
Exercise of stock options 2,500 5 - 5
Net earnings for 1998 - - 1,634 1,634
Balance, June 30, 1998 13,550,638 $ 16,856 $ 6,253 $ 23,109
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
INTRENET, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Three and Six Months Ended June 30, 1998 and 1997
(Unaudited)
(In Thousands of Dollars)
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,246 $ 714 $ 1,634 $ 462
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Deferred income taxes 360 232 491 232
Depreciation and amortization 1,097 1,295 2,204 2,578
Provision for doubtful accounts 74 99 133 226
Changes in assets and liabilities, net:
Receivables (3,586) (3,452) (3,592) (6,062)
Prepaid expenses 397 738 (1,743) (404)
Accounts payable and accrued expenses (155) 1,195 880 2,411
Net cash provided by (used in)
operating activities (567) 821 7 (557)
Cash flows from financing activities:
Net borrowings (repayments) on line of
credit, net 2,210 479 2,829 4,928
Principal payments on long-term debt (854) (926) (1,826) (3,118)
Proceeds from exercise of stock options 0 15 5 67
Net cash provided by (used in)
financing activities 1,356 (432) 1,008 1,877
Cash flows from investing activities:
Additions to property and equipment (557) (213) (646) (735)
Disposals of property and equipment 19 312 97 815
Net cash provided by (used in)
investing activities (538) 99 (549) 80
Net increase in cash
and cash equivalents 251 488 466 1,400
Cash and cash equivalents:
Beginning of period 813 1,322 598 410
End of period $ 1,064 $ 1,810 $ 1,064 $ 1,810
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
INTRENET, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
June 30, 1998
(Unaudited)
(1) Unaudited Consolidated Financial Statements
The accompanying unaudited consolidated financial statements
include the accounts of Intrenet, Inc. and all of its
subsidiaries (collectively, the Company). Operating subsidiaries
at June 30, 1998 were Roadrunner Trucking, Inc. (RRT), Eck
Miller Transportation Corporation (EMT), Advanced Distribution
System, Inc. (ADS), and Roadrunner Distribution Services, Inc.
(RDS). Also included is the Company's intermodal broker and
logistics manager, INET Logistics, Inc. (INL). All significant
intercompany transactions are eliminated in consolidation.
Through its subsidiaries, the Company provides general and
specialized truckload carrier, brokerage and logistics
management services throughout North America.
The consolidated financial statements included herein have been
prepared pursuant to the rules and regulations of the Securities
and Exchange Commission (SEC). In management's opinion, these
financial statements include all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation
of the results of operations for the interim periods presented.
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. For this reason, the accompanying
consolidated financial statements and notes thereto should be
read in conjunction with the financial statements and notes for
the year ended December 31, 1997 included in the Company's 1997
Annual Report on Form 10-K.
The results for the three month and six month periods ended
June 30, 1998, are not necessarily indicative of the results to
be expected for the entire year.
(2) Earnings Per Common and Common Equivalent Share
Earnings per common and common equivalent share have been
computed on the basis of the weighted average common shares
outstanding during the periods. The Company has adopted the
Financial Accounting Standard Board issue of SFAS No. 128,
"Earnings Per Share", and restated its computation of EPS for
all prior periods. The adoption of this new standard resulted
in an immaterial difference in its computation of basic and
diluted EPS.
(3) Income Taxes
Income taxes in interim periods are generally provided on the
basis of the estimated effective tax rate for the year.
(4) Contingent Liabilities
On June 13, 1997, the Company received notice from the Central
States Southeast and Southwest Areas Pension Fund (the "Fund")
of a claim pursuant to the Employee Retirement Income Security
Act of 1974, as amended by the Multi-employer Pension Plan
Amendments Act of 1980 ("MPPAA"). MPPAA provides that, if an
employer withdraws from participation in a multi-employer
pension plan, such as the Fund, the employer and members of the
employer's "controlled group" of businesses are jointly and
severally liable for a portion of the plan's underfunding. The
claim is based on the withdrawal of R-W Service System, Inc.
("RW") from the Fund in 1992. The Company's records indicate
that RW was an indirect subsidiary of the Company's predecessor,
Circle Express, Inc., from March 1985 through April 1988, when
it and certain other subsidiaries were sold. The Fund currently
claims that RW's withdrawal liability is approximately $3.7
million plus accrued interest in the amount of approximately
$1.7 million. Based on its investigation to date, and, after
consultation with counsel, management believes that the Company
is not liable to the Fund for any of RW's withdrawal liability.
The Company has filed a formal request for review of the claim
as provided by MPPAA, and the Fund rejected that request on
January 28, 1998. The Company is in the process of seeking
resolution of the claim in binding arbitration. The Company is
obligated to make interim payments to the Fund until the issue
of liability is resolved. The interim payment obligation is
currently approximately $88,500 per month. The Company has made
payments to the Fund that total approximately $1,000,000 as of
June 30, 1998, which are included in other assets on the
Company's balance sheet. There can be no assurance that either
the need to make interim payments to the Fund or the ultimate
resolution of this matter will not have a material adverse
effect on the Company's liquidity, results of operation or
financial condition.
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Results of Operations
Introduction
The following discussion should be read in conjunction with the
condensed consolidated financial statements and notes thereto
appearing elsewhere in this report. Certain statements made in
this report relating to trends in the Company's business, as
well as other statements including such words as "believe",
"expect", "anticipate", and other similar expressions constitute
forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. For a description of
risks and uncertainties relating to forward looking statements,
see the discussion in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997.
The Company reported net earnings of $1,246,000($0.09 per
share) on revenues of $66.4 million in the three months and net
earnings of $1,634,000 ($0.12 per share) on revenues of $127.0
million in the six months ended June 30, 1998. This compares
with net earnings of $714,000 on revenues of $64.5 million, and
net earnings of $462,000 on revenues of $122.2 million in the
comparable periods of 1997, respectively. The Company's revenue
grew by 2.9 percent in the second quarter of 1998 and three of
its five subsidiaries (EMT, ADS and INET) reported revenue
improvements. During the second quarter of 1998, RDS's
operations and administrative offices were combined with RRT in
Albuquerque, NM. Consequently, this activity resulted in a
slight decrease in revenue production for these companies during
the quarter compared to the prior year. On a year to date basis,
all of the subsidiaries except RDS reported revenue growth. Fuel
prices continued to decline during the second quarter and were
lower than the second quarter of the prior year. Barring any
unforeseen changes in the overall economy or in the price of
fuel, management expects that the Company will benefit from
continuing cost reduction programs in the area of safety, fuel
purchasing and insurance costs and greater equipment utilization
and that an expanded fleet will allow for revenue growth. These
trends should enable the Company to remain profitable for the
balance of 1998.
During the second quarter of 1998, the Company acquired the
assets of two companies, Regal Transportation and Ram Trans.
Regal Transportation, a flatbed operation located in Niles, OH,
with revenues of approximately $5 million, was acquired by EMT.
Ram Trans, a flatbed brokerage and logistics company, located in
Denver, CO, with revenues of $5 - 6 million per year, was
acquired by INET. These acquisitions are projected to add $10 -
11 million in operating revenues.
Revenue miles for the second quarter of 1998 decreased to 42.6
million miles from 44.9 million miles as a result of fewer
average number of tractors in the fleet. Revenue per mile in the
second quarter of 1998 improved by 3.8 percent to $1.37 per
mile, up from $1.32 last year, continuing the trend reported in
the first quarter.
The Company's total operating fleet, including owner-operators,
at the end of the second quarter of 1998 was 2,250 tractors, up
from 2,231 at the end of the second quarter of 1997,
representing an increase of 1 percent. The number of Company owned
tractors, at the end of the second quarter, grew by 3 percent, as
compared with the second quarter of 1997.
A discussion of the impact of the above and other factors on
the results of operations in the three months and six months
ended June 30, 1998, as compared to the comparable periods of
1997 follows.
1998 Compared to 1997
Three Months Six Months
Ended June 30, Ended June 30,
Key Operating Statistics 1998 1997 %Change 1998 1997 %Change
Operating Revenues ($ millions) $66.4 $64.5 2.9 $127.0 $122.2 3.9
Net Earnings ($000's) $1,246 $714 74.5 $1,634 $462 253.7
Average Number of Tractors 2,249 2,282 (1.5) 2,225 2,275 (2.2)
Total Loads (000's) 91.1 79.0 15.3 174.9 147.3 18.7
Revenue Miles (millions) 42.6 44.9 (5.1) 82.6 85.2 (3.1)
Average Revenue per
Revenue Mile* $1.37 $1.32 3.8 $1.36 $1.32 3.0
* Excluding brokerage revenue
Operating Revenues
Operating revenues for the three months and six months ended
June 30, 1998, totaled $66.4 million and $127.0 million,
respectively, as compared to $64.5 million and $122.2 million
for the same periods in 1997, reflecting better freight
availability than the prior year. Four of the Company's five
subsidiaries continued to grow in 1998. Revenue increased by
$1.9 million, or 2.9 percent, in the three months, and $4.8
million, or 3.9 percent, in the six months ended June 30, 1998,
over the comparable 1997 periods. The average number of Company
owned tractors decreased 0.3 percent from 1,208 to 1,205 in the
six month period ended June 30, 1998 from the comparable period
in 1997, and the average owner-operator tractor count decreased
4.4 percent from 1,067 to 1,020. Approximately 50.9 percent of
the Company's revenue was generated by Company-operated
equipment, and 37.3 percent by owner-operator equipment in the
six months ended June 30, 1998. This compares to 54.3 percent
and 37.8 percent, respectively, in the 1997 period. The
remaining revenues were from freight brokered to other carriers,
("brokered freight").
The Company experienced a 3.0 percent improvement in the
average revenue per revenue mile in the first six months of
1998, as compared to 1997. This is generally the result of a
slight tightening of capacity in the markets served by the
Company.
Operating Expenses
The following table sets forth the percentage relationship of
operating expenses to operating revenues for the three months
and six months ended June 30.
Three Months Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
Operating revenues 100% 100% 100% 100%
Operating expenses:
Purchased transportation
and equipment rents 45.0 42.5 44.9 42.0
Salaries, wages and benefits 23.8 24.2 23.8 24.6
Fuel and other operating expenses 18.0 19.8 18.2 20.5
Operating taxes and licenses 3.8 4.0 4.0 4.2
Insurance and claims 3.0 3.5 3.2 3.5
Depreciation 1.5 1.8 1.5 1.9
Other operating expenses 1.4 1.4 1.5 1.3
Total operating expenses 96.5% 97.2% 97.1% 98.0%
Purchased transportation and equipment rents increased as a
percentage of revenue due to the increased amount of brokered
freight. Likewise, salaries, wages and benefits decreased as a
percentage of revenue because of the relatively smaller portion
of the Company's total revenue generated by Company operated
equipment and the growing portion of the Company's total revenue
from owner-operators and from brokered freight. Fuel and other
operating expenses are attributable to Company-operated
equipment and these expenses declined in relation to growth in
the use of owner-operators and brokered freight. Declining
diesel fuel prices have also been a significant factor relating
to this expense decrease. Other operating expenses increased in
1998 over 1997 due to higher communication cost resulting from
pay phone user surcharges and increased professional fees as a
result of the MPPAA litigation.
Interest Expense
Interest expense decreased in 1998, primarily as a result of
the decreased borrowings under capital lease obligations as
equipment is replaced with operating leases. Interest on bank
borrowings were flat in 1998 compared to 1997, due to a slight
increase in the borrowing base offset by a reduction in the
borrowing rate due to the amended bank agreement in 1998.
Provision for Income Taxes
Income taxes in interim periods are generally provided on the
basis of the estimated effective tax rate for the year.
Liquidity and Capital Resources
The Company generated $466,000 of cash in the first six months
of 1998. As reflected in the accompanying Consolidated
Statements of Cash Flows, $7,000 of cash was provided by
operating activities, primarily by earnings and depreciation
which was offset by increased accounts receivable and cash used
to purchase plates and permits for the Company's fleet. Net cash
of $1.0 million was generated by financing activities, primarily
bank borrowings. Net cash of $549,000 was used in financing
activities, primarily additions to property and equipment.
The Company's day-to-day financing is provided by borrowings
under its bank credit facility. The credit facility consists of
a $5 million term loan with a final maturity of December 31,
1999, and a $28 million revolving line of credit which expires
January 1, 2000. Quarterly principal payments of $312,500 on
the term loan are required. The line of credit includes
provisions for the issuance of standby letters of credit which,
as issued, reduce available borrowings under the line of credit.
Borrowings under the line of credit are limited to amounts
determined by a formula tied to the Company's eligible accounts
receivable and inventories, as defined in the credit facility.
Borrowings under the revolving line of credit totaled $9.4
million at June 30, 1998, and outstanding letters of credit
totaled $6.2 million at that date. The combination of these two
bank credits totaled $15.6 million, leaving $9.1 million of
borrowing capacity available at June 30, 1998.
During the first quarter, the Company's bank agreement was
amended, resulting in a reduction of the borrowing rate on the
Company's credit facility from the bank's prime rate plus one
half percent to, at the election of the Company, the prime rate
or 250 basis points over the 30 day LIBOR rate. The bank also
reduced the rate on the term loan from the prime rate plus one
half to, at the election of the Company, one quarter percent
plus the prime rate or 275 basis points in excess of the 30, 90,
or 120 day LIBOR rate. Among other changes, the bank increased
the ratio of adjusted liabilities from 3:1 to 4:1, removed
limitations on capital expenditures for tractors and trailers,
but added a "Fixed Charge Coverage Ratio" defined by EBITDA plus
Historical Operating Lease payments divided by Fixed Charges
plus Prospective Operating Lease payments.
The Company believes that cash generated from operations, and
cash available to it under the bank credit facility will be
sufficient to meet the Company's needs for the foreseeable
future.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
On June 13, 1997, the Company received notice from the
Central States Southeast and Southwest Areas Pension Fund (the
"Fund") of a claim pursuant to the Employee Retirement Income
Security Act of 1974, as amended by the Multi-employer Pension
Plan Amendments Act of 1980 ("MPPAA"). MPPAA provides that, if
an employer withdraws from participation in a multi-employer
pension plan, such as the Fund, the employer and members of the
employer's "controlled group" of businesses are jointly and
severally liable for a portion of the plan's underfunding. The
claim is based on the withdrawal of R-W Service System, Inc.
("RW") from the Fund in 1992. The Company's records indicate
that RW was an indirect subsidiary of the Company's predecessor,
Circle Express, Inc., from March 1985 through April 1988, when
it and certain other subsidiaries were sold. The Fund currently
claims that RW's withdrawal liability is approximately $3.7
million plus accrued interest in the amount of approximately
$1.7 million. Based on its investigation to date, and, after
consultation with counsel, management believes that the Company
is not liable to the Fund for any of RW's withdrawal liability.
The Company has filed a formal request for review of the claim
as provided by MPPAA, and the Fund rejected that request on
January 28, 1998. The Company is in the process of seeking
resolution of the claim in binding arbitration. The Company is
obligated to make interim payments to the Fund until the issue
of liability is resolved. The interim payment obligation is
currently approximately $88,500 per month. The Company has made
payments to the Fund that total approximately $1,000,000 as of
June 30, 1998, which are included in other assets on the
Company's balance sheet. There can be no assurance that either
the need to make interim payments to the Fund or the ultimate
resolution of this matter will not have a material adverse
effect on the Company's liquidity, results of operation or
financial condition.
There are no other material pending legal proceedings to which
the Company or any of its subsidiaries is a party or of which
any of their property is the subject, other than routine
proceedings previously reported in the Company's 1997 Annual
Report on Form 10-K, and litigation incidental to its business,
primarily involving claims for personal injury and property
damage incurred in the transporting of freight. The Company
maintains insurance which covers liability resulting from
transportation related claims in amounts management believes are
prudent and consistent with accepted industry practices, subject
to deductibles for the first $100,000 to $250,000 of exposure
for each incident. The Company is not aware of any claims or
threatened claims that might materially affect the Company's
operating or financial results.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of shareholders of the Company was held on
May 6, 1998. The following individuals were elected as
directors for the ensuing year or until their successors are
duly elected and qualified with the following votes cast for or
against. There were no abstentions or broker non-votes.
For Against
John P. Delavan 12,705,979 2,539
Ned N. Fleming III 12,706,279 2,239
Eric C. Jackson 12,706,279 2,239
Edwin H. Morgens 12,706,379 2,139
Thomas J. Noonan, Jr. 12,706,079 2,439
Philip Scaturro 12,706,379 2,139
The shareholders of the Company also ratified the selection of
Arthur Andersen LLP as auditors for 1998 with 12,697,800 votes
in favor, 4,718 against, and 6,000 abstentions. There were no
broker non-votes.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit 10.1 - First Amendment to the Employment Agreement dated
June 4, 1996, between the Company and John P. Delavan
Exhibit 11 - Computation of Per Share Earnings
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
INTRENET, INC.
(Registrant)
/s/ John P. Delavan
John P. Delavan,
President and Chief
Executive Officer
August 11, 1998 /s/ Roger T. Burbage
Roger T. Burbage,
Executive Vice-President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment to Employment Agreement ("Amendment") is
made and dated as of April 9, 1998, by and between INTRENET,
INC., an Indiana corporation ("Employer"), and JOHN DELAVAN
("Employee"),
W I T N E S S E T H
WHEREAS, Employee is currently serving as the Chief Executive
Officer of Employer pursuant to an Employment Agreement dated as
of June 4, 1996 (the "Prior Agreement"),
WHEREAS, Employee desires to be assured of certain compensation
and other benefits for his continued services to Employer.
WHEREAS, the parties have agreed to amend the Prior Agreement
on the terms and conditions set forth in this amendment.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and undertakings contained herein, Employer and
Employee agree as follows:
1. The Term of the agreement for Employee's employment as
defined in Paragraph 3 of the Prior Agreement shall continue
through June 30, 2000.
2. The Base Compensation of the Employee as defined in
Paragraph 4 of the Prior Agreement shall be $210,000 per annum,
payable at regular intervals in accordance with the Employer's
normal payroll practices now or hereafter in effect.
3. Except as set forth in this Amendment, the Prior Agreement
shall continue in effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed and delivered as of the day and year first set forth
above.
INTRENET, INC.
By /s/ Edwin H. Morgens
Edwin H. Morgens,
Chairman of the Board, Employer
By /s/ John Delavan
John Delavan, Employee
<TABLE>
INTRENET, INC.
STATEMENT RE: COMPUTATION
OF PER SHARE EARNINGS
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Weighted average shares outstanding during period 13,550,638 13,450,303 13,549,934 13,444,088
Assumed exercise of options and warrants 457,994 228,456 420,384 185,906
Shares assumed for fully diluted earnings per share 14,008,632 13,678,759 13,970,318 13,629,994
Earnings for the period:
($ in Thousands)
Net earnings $ 1,246 $ 714 $ 1,634 $ 462
Earnings per common and common
equivalent share:
Basic: $ 0.09 $ 0.05 $ 0.12 $ 0.03
Diluted: $ 0.09 $ 0.05 $ 0.12 $ 0.03
Exhibit 11
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000778161
<NAME> INTRENET,INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 1,064
<SECURITIES> 0
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<ALLOWANCES> (1,302)
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<PP&E> 28,803
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<TOTAL-ASSETS> 79,962
<CURRENT-LIABILITIES> 31,178
<BONDS> 22,875
0
0
<COMMON> 16,856
<OTHER-SE> 6,253
<TOTAL-LIABILITY-AND-EQUITY> 79,962
<SALES> 0
<TOTAL-REVENUES> 127,027
<CGS> 0
<TOTAL-COSTS> 123,389
<OTHER-EXPENSES> 210
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<INCOME-PRETAX> 2,125
<INCOME-TAX> 491
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<CHANGES> 0
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<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
