<PAGE>
M.S. Carriers, Inc.
3171 Directors Row
Memphis, TN 38116
March 28, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
Pursuant to the requirements of the Securities Exchange Act of 1934, we are
transmitting herewith the attached Form 10-K.
Sincerely,
s/ M.J. Barrow
M.J. Barrow, Senior Vice President
<PAGE>
United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1995
Commission file number 0-14781
M.S. Carriers, Inc.
(Exact name of registrant as specified in its charter)
Tennessee 62-1014070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3171 Directors Row, Memphis, TN 38116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (901) 332-2500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 Par Value
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 periods that the registrant was required to filed
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. [ ]
The aggregate market value of the registrant's $.01 par value common stock
held by non-affiliates of the registrant as of March 1, 1996 was $151,196,560
(based on the closing sale price of $16.6875 per share on that date, as
reported by NASDAQ).
As of March 1, 1996, 12,347,634 shares of the registrant's common stock were
outstanding.
Documents Incorporated by Reference
No documents are incorporated by reference.
1
<PAGE>
PART I
ITEM 1. BUSINESS
M.S. Carriers, Inc. is a transportation company primarily engaged in the
hauling of truckload shipments of general commodities throughout the United
States and the provinces of Quebec and Ontario in Canada. The Company has both
common and contract authority, granted by the Interstate Commerce Commission
to transport any type of freight (except certain types of explosives,
household goods and commodities in bulk) from any point in the continental
United States to any other point in any state over any route selected by
the Company. The Company has authority in Canada granted by the Quebec
Transport Commission and the Ontario Highway Transport Board to haul general
commodities from points in the United States to points in Quebec and Ontario
and from points in Quebec and Ontario into the United States. The Company
also provides interline service to and from Mexico.
The Company's primary line-haul traffic flows are between the
Middle South and the Southwest, Midwest, Central States,
Southeast and Northeast. In addition, the Company operates
regional networks which serve the Southeast, Southwest, Middle
South, Central States and Northeast. The average length of a trip
(one-way) was approximately 584 miles in 1995 and 617 miles in 1994.
The principal types of freight transported are packages, retail
goods, nonperishable foodstuffs, paper and paper products,
household appliances, furniture and packaged petroleum products.
Marketing
M.S. Carriers, Inc. has targeted the service-sensitive segment of
the transportation market rather than that segment which uses price as
its primary consideration. The Company has chosen to provide premium
services and charge compensating rates rather than to compete
solely on the basis of price. The principal elements of the
Company's premium service are dependable late-model equipment
which allows timely deliveries, multiple and appointment pickups
and deliveries, assistance in loading and unloading, the
availability of extra trailers which can be placed for the
convenience of customers and sufficient equipment to respond
promptly to customers' varying requirements.
The Company's individualized service requires a strong commitment
to marketing. The Company's marketing efforts concentrate on
attracting customers that ship multiple loads from numerous
locations that complement the Company's existing traffic flows.
As shipping patterns of existing customers expand or change, the
Company attempts to obtain additional customers to complement the
new traffic flows. Thus, the effort to attract new customers
varies from time to time depending upon growth or changes in the
shipping patterns of existing customers.
The Company's major revenue sources are the medium to long line-haul and
the regional short-haul segments of the dry van truckload market. In
these markets, the Company focuses on customers who value the broad
geographic coverage, premium services and flexibility available from a larger
carrier. These customers generally prefer to have their freight handled by a
few carriers with whom they can establish long-term relationships. The
Company also provides dedicated fleet services and logistics services.
These services supplement the Company's strengths in its traditional markets
and position the Company to meet the anticipated needs of its customers.
2
<PAGE>
The Company had revenues of $28 million in both 1995 and 1994 from freight
shipments having either a point of origin or a point of destination in
Mexico. These shipments represented approximately 8.4% and 9.6%,
respectively, of total revenues for 1995 and 1994.
The largest 25, 10 and 5 customers accounted for approximately
63%, 48% and 35%, respectively, of the Company's revenues during
1995. Most of these customers are large, publicly-held companies.
One customer, Sears, accounted for approximately 18% of the
Company's revenues during 1995 and 15% in 1994. No other
customer accounted for more than 10% of the Company's revenues
during 1995 or 1994.
Operations
The Company's operations are designed to maximize efficiency
while maintaining the emphasis placed on providing premium
service to customers. Through the use of the Company's information
and satellite tracking systems, the location of all shipments and
equipment is continuously monitored to coordinate routes and increase
equipment utilization. The Company's usual hauling method
requires the unit carrying the shipment to proceed directly from
origin to destination with no delay enroute occasioned by a
change of drivers, relays or circuitous routing. The Company's
customer service department maintains constant customer contact
regarding overall service requirements and specific freight
movements and also attempts to produce backhauls for each unit.
Because the average trip has been approximately 600 miles, most of
the Company's shipments are hauled by one driver rather than two.
The relatively short trips ordinarily run by the Company make
this method of operation preferable to team operations. Each of
the Company's over-the-road tractors is equipped with a sleeper
cab so that the driver can comply with the Department of
Transportation's hours of service guidelines.
Competition
The entire transportation industry, including the trucking industry, is
highly competitive. The Company competes primarily with other truckload
carriers. Competition for the freight transported by the Company is based,
in the long-term, primarily on service and efficiency and, to a lesser
degree, on freight rates. Several other truckload carriers have substantially
greater financial resources, own more equipment or carry a larger volume of
freight than the Company.
During 1995, the Company experienced the effects of intense competition in
some of the markets which it serves. This competition reduced the demand for
the Company's services in these markets. Management attributed this to an
overcapacity of equipment servicing these markets as well as reduced freight
requirements of shippers in those markets during 1995 as compared to 1994.
Accordingly, the Company scaled down the number of planned additions to
its fleet in 1995 while seeking to obtain additional freight from customers
in more favorable markets.
3
<PAGE>
Regulation
The Company is a motor carrier regulated by the Interstate Commerce
Commission and the United States Department of Transportation. Additionally,
such matters as weight and dimensions of equipment are subject to
federal, state and international regulations. The Company believes that it
is in substantial compliance with all licensing and regulatory requirements
in each jurisdiction in which it operates.
Seasonality
In the trucking industry generally, results of operations tend to show a
seasonal pattern as some customers reduce shipments during and after the
winter holiday season and during the summer months due to temporary plant
closings for vacations. Revenues can also be affected by bad weather and
holidays, since revenue is directly related to available working days.
Furthermore, operating expenses historically have been higher in the winter
months due primarily to decreased fuel efficiency and increased maintenance
costs of revenue equipment in cold weather.
Fuel
Shortages of fuel or increases in fuel prices could have a materially adverse
effect on the operations and profitability of the Company. Although fuel
prices have been relatively stable over the past few years, the Company can
not predict future fuel supplies or prices.
The Company maintains fuel storage tanks at certain of its terminals. Leakage
or damage to these tanks could subject the Company to environmental clean-up
costs.
Drivers and Employees
The Company recognizes the importance of maintaining a professional driver
work force. The Company has established several programs to increase driver
loyalty and to give drivers a stake in the Company. The drivers
are compensated on the basis of miles driven and other services
such as loading and unloading and number of deliveries. Base pay
for miles driven increases with a driver's length of employment
with the Company.
The Company maintains a defined contribution plan under Section
401(k) of the Internal Revenue Code for drivers and all other
employees. The Company matches 50% of the employee's
contribution, but limited to a maximum of 3% of the employee's
compensation.
Drivers are selected in accordance with specific Company guidelines
relating primarily to safety records, driving experience and
personal evaluations. Once selected, a driver is trained in all
phases of Company policies and operations as well as safety
techniques and fuel efficient operation of equipment. In
addition, all new drivers must pass a road test prior to
assignment to a vehicle. Recognizing the importance of driver
contact while on the road for extended periods, the Company
maintains an electronic mailbox system which allows the drivers
to transmit and receive messages 24 hours a day, equips each of its
tractors with a mobile two-way satellite communication system and
maintains regular telephonic contact between dispatchers and drivers.
4
<PAGE>
The Company also recognizes that owner-operators provide the Company
with another source of drivers to support its operations. Owner-
operators are independent contractors which supply their own tractors and
drivers, and are responsible for their operating expenses in return for a
negotiated fee based upon number of miles driven and accessorial services
provided. While the Company's primary benefit from owner-operators is the
acquisition of the services of a qualified driver, an additional benefit
is the Company requires less capital for growth as owner-operators
provide their own tractors. The Company intends to continue its emphasis
on recruiting owner-operators.
Since competition for qualified drivers is intense, the Company
emphasizes the importance of attracting and retaining qualified
drivers. The Company employs eight full-time driver recruiters
and two full-time owner-operator recruiters. The driver
compensation programs, together with the Company's late-model
equipment and relatively short trips, provide important
incentives to attract and retain qualified drivers. Despite these
incentives, the Company experiences difficulty from time to time
in attracting and retaining qualified drivers.
At December 31, 1995, the Company employed 2,947 persons, of whom
2,139 were drivers, 262 were mechanics and other equipment
maintenance personnel, and 546 were support personnel including
management and administration. The Company also leased 253 tractors
with qualified drivers from owner-operators.
None of the Company's employees are represented by a collective
bargaining unit, and management considers the Company's relationship
with its employees to be excellent.
ITEM 2. PROPERTIES
Office and Terminal Facilities
The Company's executive offices and principal terminal are located in
Memphis, Tennessee on 3-acre and 48-acre tracts of land, respectively,
both of which are owned by the Company. The executive offices have
57,000 square feet of office space. The principal terminal consists of
52,000 square feet of office space and 41,000 square feet of maintenance
facilities.
The Company owns office and maintenance facilities of 34,500 square
feet in Columbus, Ohio, 16,500 square feet in Laredo, Texas, 16,500
square feet in Martinsburg, West Virginia and 45,500 square feet in
Atlanta, Georgia. Additionally, the Company owns a 3,000 square
foot office and terminal on a 4-acre tract of land in Tupelo, Mississippi.
The Company leases several small offices and/or trailer parking yards
throughout the country.
Revenue Equipment
The Company has a policy of purchasing standardized tractors and
trailers manufactured to the Company's specifications. At
December 31, 1995, the Company owned and operated 2,078 Company-
owned tractors and leased 253 tractors owned by owner-operators.
The Company's tractors include 2,057 over-the-road and 21 local tractors.
The Company owns 7,190 van trailers, of which 934 are 48 feet long and
6,256 are 53 feet long; all trailers are 102 inches wide with a minimum
of 109.5 inches of inside height. Most of the tractors are manufactured
by Freightliner and most of the trailers are manufactured by Lufkin or
Great Dane.
5
<PAGE>
Standardization enables the Company to simplify driver training,
control the cost of spare parts inventory and enhance its
preventive maintenance program. The Company adheres to a
comprehensive maintenance program, based on the amount of use of
the tractor, designed to minimize equipment down-time and enhance
the resale value of all of its equipment. During 1995, the Company
reduced its trade cycle on tractors from 5 years to 4 years. The Company
constantly monitors the fuel efficiency of its power equipment. The miles-
per-gallon average of the entire fleet was approximately 6.03 in
1995.
The following table shows the type and age of equipment operated
by the Company at December 31, 1995:
<TABLE>
<CAPTION>
Model Year Over-the-Road 48-Foot 53-Foot
Tractors Trailers Trailers
_______________________________________________________
<S> <C> <C> <C>
1996 388 993
1995 635 1,930
1994 341 222 926
1993 601 209 1,015
1992 84 250 306
1991 225
1990 1 500
1989 1 154 172
1988 43 189
1987 4 38
1986 2 16
1985 2
___________________________________________
2,057 934 6,256
___________________________________________
___________________________________________
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to routine litigation incidental to its
business, primarily involving claims for personal injuries and
property damage incurred in the transportation of freight. The
Company believes adverse results in one or more of these cases
would not have a material adverse effect on its financial position
or its results of operations. The Company self-insures up to
$1,000,000 for liability and property damage claims arising out of a
single occurrence. In addition, the Company self-insures up to an
aggregate amount of $750,000 for liability and property damage claims
in excess of $1,000,000 arising out of a single occurrence. The Company
maintains insurance which covers liability in excess of the self-insured
amounts at coverage levels that management considers adequate.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during
the fourth quarter of 1995.
6
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED STOCKHOLDER MATTERS
Price Range of Common Stock
The Company's Common Stock is traded in the over-the-counter market
under the symbol MSCA. The following table sets forth, for the
calendar periods indicated, the high and low sales prices for the
Company's Common Stock as reported by the National Association of
Securities Dealers Automated Quotations System (NASDAQ).
<TABLE>
<CAPTION>
High Low
__________________
<S> <C> <C>
1995
1st Quarter 25 1/4 21
2nd Quarter 25 16 5/8
3rd Quarter 20 3/4 15 3/4
4th Quarter 20 1/4 15 1/4
1994
1st Quarter 28 1/2 20 1/2
2nd Quarter 23 1/4 18 3/4
3rd Quarter 25 1/4 19 1/2
4th Quarter 25 20
</TABLE>
As of March 1, 1996, the Company's common stock was held by approximately
4,000 stockholders of record or through nominee or street name accounts
with brokers.
Dividend Policy
The Company has never paid a cash dividend on its Common Stock. It
is the current intention of the Company's Board of Directors to
continue to retain earnings to finance the growth of the Company's
business rather than to pay dividends. Future payment of cash
dividends will depend upon the financial condition, results of
operations and capital commitments of the Company as well as other
factors deemed relevant by the Board of Directors.
7
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data should be read in conjunction
with the financial statements and notes thereto appearing elsewhere
herein.
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993 1992 1991
______________________________________________________
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Statement of income data:
Operating revenues $333,070 $292,883 $224,716 $181,303 $152,569
Operating expenses:
Salaries, wages and benefits 126,176 111,493 84,820 66,568 55,648
Operations and maintenance 66,961 64,498 60,880 52,077 44,973
Taxes and licenses 10,024 8,746 6,901 6,040 4,965
Insurance and claims 15,666 14,471 9,545 8,035 7,863
Communications and utilities 6,081 4,698 4,135 3,279 2,803
Depreciation and amortization 39,143 33,694 27,360 21,866 18,186
Rent and purchased
transportation 41,946 23,564 4,246 1,358 1,603
Other 2,435 2,058 1,792 1,706 1,161
______________________________________________________
Total operating expenses 308,432 263,222 199,679 160,929 137,202
______________________________________________________
Operating income 24,638 29,661 25,037 20,374 15,367
Interest expense (4,076) (1,802) (2,041) (2,463) (2,535)
Other (expense) income (25) 147 118 68 151
______________________________________________________
Income before income taxes and
cumulative effect of change
in accounting for income
taxes 20,537 28,006 23,114 17,979 12,983
Income taxes 7,386 10,856 9,512 7,405 5,223
______________________________________________________
Income before cumulative effect
of accounting change 13,151 17,150 13,602 10,574 7,760
Cumulative effect as of
January 1, 1993 of change
in accounting for income
taxes 500
______________________________________________________
Net income $13,151 $17,150 $14,102 $10,574 $7,760
______________________________________________________
______________________________________________________
Earnings per share:
Income before cumulative
effect of accounting change $1.01 $1.31 $1.13 $0.97 $0.73
Cumulative effect of
accounting change 0.04
______________________________________________________
Net income $1.01 $1.31 $1.17 $0.97 $0.73
______________________________________________________
______________________________________________________
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
December 31
1995 1994 1993 1992 1991
_______________________________________________________
(In thousands)
<S> <C> <C> <C> <C> <C>
Balance sheet data:
Total assets $279,934 $276,073 $198,960 $150,842 $122,275
Long-term obligations 47,377 51,187 17,985 32,693 26,799
Stockholders' equity 152,524 147,924 131,939 71,969 61,293
</TABLE>
<TABLE>
The following tables set forth data regarding the freight revenues,
operations, revenue equipment and employees of the Company.
<CAPTION>
1995 1994 1993 1992 1991
______________________________________________________
For the year ended December 31:
<S> <C> <C> <C> <C> <C>
Operating ratio (1) 92.6% 89.9% 88.9% 88.8% 89.9%
Average number of truckloads
per week (2) 8,265 6,971 5,759 4,300 3,324
Average revenues per tractor
per week (2) $2,569 $2,613 $2,530 $2,575 $2,597
Average miles per trip (2) 584 617 618 693 765
Average revenue per mile (2) $1.25 $1.26 $1.19 $1.17 $1.15
At December 31:
Total tractors operated
Company owned 2,078 2,106 1,854 1,460 1,227
Owner-Operator Owned 253 207 0 0 0
Total tractors 2,331 2,313 1,854 1,460 1,227
Total trailers 7,190 6,481 5,256 3,925 2,478
Number of employees 2,947 3,238 2,705 2,177 1,897
<FN>
(1) Operating expenses as a percentage of operating revenues.
(2) Excludes revenues from logistics services which began
in September 1993.
</FN>
</TABLE>
9
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following table sets forth the percentage relationship of
revenue and expense items to operating revenues for the periods
indicated.
<TABLE>
<CAPTION>
Percentage of Operating Revenues
Year ended December 31
1995 1994 1993
____________________________________
<S> <C> <C> <C>
Operating revenues 100.0% 100.0% 100.0%
Operating expenses:
Salaries, wages and benefits 37.9 38.1 37.7
Operations and maintenance 20.1 22.0 27.1
Taxes and licenses 3.0 3.0 3.1
Insurance and claims 4.7 5.0 4.3
Communications and utilities 1.8 1.6 1.8
Depreciation and amortization 11.8 11.5 12.2
Rent and purchased transportation 12.6 8.0 1.9
Other 0.7 0.7 0.8
____________________________________
Total operating expenses 92.6 89.9 88.9
____________________________________
Operating income 7.4 10.1 11.1
Interest expense (1.2) (0.6) (0.9)
Other income (0.1) 0.1 0.1
____________________________________
Income before income taxes and
cumulative effect of change in
accounting for income taxes 6.1 9.6 10.3
Income taxes 2.2 3.7 4.2
____________________________________
Income before cumulative effect
of accounting change 3.9 5.9 6.1
Cumulative effect as of January 1,
1993 of change in method of
accounting for income taxes 0.2
____________________________________
Net income 3.9% 5.9% 6.3%
____________________________________
____________________________________
</TABLE>
10
<PAGE>
RESULTS OF OPERATIONS
1995 Compared to 1994
Operating revenues grew 13.7% to $333 million in 1995 from
$293 million in 1994. This growth was due to the increase in the
average number of tractors in service during the year and increased
revenues from logistics services.
Revenues per mile were $1.25 in 1995 compared to $1.26 in
1994. There were no material rate increases during 1995.
Salaries, wages and benefits were 37.9% of revenues in 1995 compared to
38.1% of revenues in 1994. This decrease was due to owner-operator tractors
representing a larger percentage of the average number of total tractors in
service during 1995, which caused a shift in expenses as amounts paid to
owner-operators are recorded as purchased transportation.
Operations and maintenance expenses decreased to 20.1% of revenues in
1995 from 22.0% of revenues in 1994. This decrease resulted from the larger
percentage of owner-operator tractors used in 1995.
Insurance and claims expense was 4.7% of revenues in 1995 compared to 5.0%
in 1994. This decrease was due principally to improvement in claims handling
and experience.
Depreciation and amortization increased slightly in 1995 to 11.8% of
revenues from 11.5% of revenues in 1994. This increase resulted from the
Company reducing its trade-in cycle of tractors during 1995, a reduced
utilization of tractors in 1995 and the addition of a fleet-wide
satellite tracking system which was installed in the latter part of 1994.
This was partially offset by an increase in the use of owner-operators and
expanded revenues from logistics services.
Rent and purchased transportation rose to 12.6% of revenues in 1995
compared to 8.0% of revenues in 1994. The increase is attributable primarily
to increased use of owner-operators and expenses incurred related to the
Company's logistics services.
Interest expense was $5,524,467 in 1995 compared to $1,801,981 in 1994.
This increase in interest expense is due to the increase in average
outstanding debt during 1995.
The effective income tax rate decreased to 35.9% in 1995 from 38.8% in 1994,
as described in Note 4 of the Notes in Consolidated Financial Statements.
1994 Compared to 1993
Operating revenues grew 30.3% to $293 million in 1994 from $225 million in
1993. This growth was due to the increase in the average number of tractors
in service during the year and rate increases implemented during the year.
11
<PAGE>
Revenues per mile were $1.26 in 1994 compared to $1.19 in 1993. The
increase in revenues per mile resulted principally from the continued
expansion of the Company's regional short-haul markets. The Company's regional
traffic involves shorter lengths of haul and higher revenues per mile.
Revenues from regional operations were 32% of the Company's total revenues in
1994 compared to 24% in 1993. In addition, rates charged to customers
were increased in mid-year to provide for increased driver compensation in an
attempt to attract and retain qualified drivers.
Salaries, wages and benefits were 38.1% of revenues in 1994
compared to 37.7% in 1993. Effective January 1, 1994, the Company no longer
paid per diem to line-haul drivers as reimbursement for expenses incurred
during extended periods of time away from home. Instead, these drivers now
receive a higher pay rate per mile which has caused a significant increase in
the Company's salary and wages expense. This was partially offset by the
Company's implementation of the use of owner-operators during 1994 which caused
a shift in expenses as amounts paid to owner-operators are recorded as
purchased transportation.
Operations and maintenance expense was 22.0% of revenues in 1994
compared to 27.1% in 1993. The decrease was attributable primarily to the
discontinuance of per diem payments to line-haul drivers and the use of owner-
operators.
Insurance and claims expense was 5.0% of revenues in 1994 compared
to 4.3% in 1993. The increase in costs is due primarily to adjustments to
reflect increased liability related to claims incurred in prior periods.
Depreciation and amortization decreased as a percentage of revenues
to 11.5% in 1994 from 12.2% in 1993. The decrease in 1994 was
associated with the Company's use of owner operators.
Rent and purchased transportation was 8.0% of revenues in 1994 compared to
1.9% in 1993. The increase in 1994 was attributable primarily
to expenses incurred in conjunction with the use of owner-operators and
the increase in the Company's logistics services.
Interest expense was $1,801,981 in 1994 compared to $2,041,114 in 1993.
The decrease in interest expense is due to the reduction in average
outstanding debt during 1994.
The effective income tax rate decreased to 38.8% in 1994 from 41.2% in
1993, as described in Note 4 of the Notes to Consolidated
Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES
The growth of the Company's business continues to require
significant investments in new revenue equipment and office and
terminal facilities. These investments have been financed largely
from cash provided by operating activities, secured and unsecured
borrowings, unsecured credit facilities and capital markets during the
past three years.
Net cash provided by operating activities was approximately $55.4
million in 1995, $55.8 million in 1994, and $36.2 million in 1993.
At December 31, 1995, the Company had obligations of $64 million
related to purchases of revenue equipment.
12
<PAGE>
The Company expects to purchase approximately $43 million of
additional revenue equipment (after trade-in allowances) in 1996. The
Company expects to fund these expenditures through cash provided by operating
activities, secured borrowings or existing credit facilities. Prevailing
interest rates and the market for used revenue equipment may affect the timing
of the Company's purchase of new and replacement revenue equipment.
Historically, cash provided by operating activities, secured and unsecured
borrowings and existing credit facilities have been sufficient to satisfy
substantially all of the Company's working capital and capital expenditure
requirements. The Company has a bank line of credit providing for borrowing of
up to $30 million with interest at the lower of the bank's corporate prime rate
or the 30-day LIBOR rate plus .45%. At December 31, 1995, there was $12.9
million outstanding under this line of credit. Management expects to maintain
this line of credit for an indefinite period.
From time to time, the Company has and may continue to repurchase shares of
its common stock. The timing and amount of such repurchases depend on market
conditions and other factors. During 1995, the Company repurchased 413,900
of its shares at an aggregate cost of $7.8 million.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's Consolidated Financial Statements and Financial Statement
Schedules are included on pages 28 to 46.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
13
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and certain other information about the Company's directors,
executive officers and other officers as of March 1, 1996 are set forth below:
Name Age Position
Michael S. Starnes 51 Chairman of the Board,
President, Chief
Executive Officer and
Director
Carl J. Mungenast 56 Executive Vice
President, Chief
Operating Officer and
Director
James W. Welch 52 Senior Vice President -
Marketing and Director
M. J. Barrow 51 Senior Vice President -
Finance, Secretary -
Treasurer and Director
Robert P. Hurt 61 Vice President -
Maintenance, assistant
Secretary and Director
Michael J. Hufnagel 51 Vice President -
Corporate Development
John W. Hudson 55 Vice President -
Process and Individual
Development
Jerry L. Stairs 54 Vice President -
Safety and Risk Management
Kenneth B. Stonebrook 34 Vice President - Human
Resources
Mike Reaves 51 Vice President -
Driver Services
Dwight M. Bassett 35 Controller
Morris H. Fair 66 Director
Jack H. Morris, III 65 Director
14
<PAGE>
Michael S. Starnes has served as a director, Chief Executive Officer and
President of the Company since 1978. In 1986, Mr. Starnes was named
Chairman of the Board. Mr. Starnes is also a director of RFS Hotel
Investors, Inc., a real estate investment trust.
Carl J. Mungenast has been Executive Vice President and Chief Operating
Officer of the Company since April 1, 1994. Mr. Mungenast was elected as a
director of the Company on May 6, 1994. Mr. Mungenast was employed by Sears
Roebuck and Company from 1958 until his retirement in December 1993. At
the time of his retirement, he was Senior Vice President for Sears Logistics
Services in Itasca, Illinois and responsible for all distribution,
transportation and home delivery services for Sears.
James W. Welch joined the Company in 1982 as a director and Vice President-
Sales. In 1989, Mr. Welch was named Senior Vice President-Marketing of the
Company and is an executive officer of the Company.
M. J. Barrow joined the Company in 1982 as Controller and Treasurer.
Shortly thereafter, he was elected as a director of the Company and named
Vice President-Finance. Mr. Barrow was named Secretary-Treasurer of the
Company in 1986 and Senior Vice President-Finance of the Company in 1989.
Mr. Barrow is an executive officer of the Company.
Robert P. Hurt joined the Company in 1983 as a director and Vice President-
Operations and Maintenance. Mr. Hurt was named Vice President-Maintenance
of the Company in 1984 and is an executive officer of the Company.
Michael J. Hufnagel joined the Company in 1987 and was named Vice President-
Corporate Development of the Company in 1989.
John M. Hudson joined the Company in 1990 and was named Vice President-
Human Resources of the Company in 1991 and Vice President-Process and
Individual Development of the Company in 1994.
Jerry L. Stairs joined the Company in 1986 and was named Vice President-
Safety and Risk Management of the Company in 1993.
Kenneth B. Stonebrook joined the Company 1983 and was named Vice
President-Human Resources of the Company in 1994.
Mike Reaves joined the Company on June 20, 1994 and was named
Vice President-Driver Services of the Company in 1995. Prior to joining
the Company, Mr. Reaves was employed by Yellow Corporation, the parent
company of several less-than-truckload carriers, for more than five
years in various sales management positions.
Dwight M. Bassett joined the Company in 1986 and was named Controller of
the Company in 1993.
Morris H. Fair has served as a director of the Company since 1986. Mr. Fair
has been a Senior Vice President of Union Planters Corporation, a bank holding
company, for more than five years.
Jack H. Morris, III has served as a director of the Company since 1986. Mr.
Morris has been Chief Executive Officer of Auto Glass of Memphis, Inc. for
more than five years.
15
<PAGE>
The Amended and Restated Bylaws of the Company provide for a Board of
Directors consisting of not less than three members, which number may be
fixed from time to time by resolution of the Board of Directors. The term of
each director expires at the next annual meeting of shareholders following the
election of the director.
16
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table and related notes summarizes the compensation paid by
the Company to its Chief Executive Officer and the four other most highly
compensated executive officers for the three fiscal years ended December 31,
1995.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long Term Other Compensation
Compensation
______________________________________________________________________________________
Profit
Name and Sharing Retirement Life
Principal Position Year Salary Bonus Options Plan(1) Savings Plan(2) Insurance(3)
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Michael S. Starnes 1995 $325,246 -- -- -- -- $64,238
Chairman of Board, 1994 313,190 $29,096 -- $ 834 -- 73,775
President and Chief 1993 300,942 36,112 60,000 1,482 -- 59,704
Executive Officer
Carl J. Mungenast 1995 205,815 -- 40,000 -- $4,620 --
Executive Vice President 1994 190,401(4) 18,500 50,000 -- -- --
and Chief Operating Officer 1993 -- -- -- -- -- --
James W. Welch 1995 188,178 -- -- -- 4,620 4,387
Senior Vice President - 1994 179,178 16,574 20,000 834 -- 4,052
Marketing 1993 170,522 20,463 -- 1,185 -- 4,016
Gary L. Hardeman(5) 1995 169,245 -- -- -- 1,848 --
Senior Vice President - 1994 164,321 14,583 20,000 834 1,848 4,110
Operations 1993 149,975 17,997 -- 1,042 1,799 4,053
M.J. Barrow 1995 138,365 -- -- -- 3,170 4,667
Senior Vice President - 1994 135,313 12,188 20,000 817 2,772 4,313
Finance, Secretary - 1993 122,944 14,753 -- 854 2,698 4,273
Treasurer
<FN>
(1) The Company's contribution to the named individual's account in the
Company's Profit-Sharing Plan.
(2) The Company's contribution to the named individual's account in the
Company's Retirement Savings Plan.
(3) Premiums paid by the Company on split-dollar life insurance policies
covering the named individual. Upon death of an individual, the
Company will be reimbursed the amount it has paid in premiums.
(4) Carl J. Mungenast's employment with the Company commenced April 1, 1994.
The amount listed under this column included $44,247 of reimbursed
relocation expenses.
(5) Gary L. Hardeman's employment with the Company terminated January 31, 1996.
</FN>
</TABLE>
17
<PAGE>
The following table sets forth information with respect to stock options
granted to the Chief Executive Officer and each of the four other most
highly compensated executive officers during the year ended December 31, 1995.
<TABLE>
<CAPTION>
Individual Grants
_________________________________________________________________________ Potential realizable
value at assumed
% of annual rates
Number of Total of stock price
Securities Options Exercise appreciation for
Underlying Granted to or Base option term
Options Employees in Price Expiration _____________________
Name Granted (#) Fiscal Year ($/SH) Date 5% 10%
____ ___________ _____________ _________ __________ ____ _____
<S> <C> <C> <C> <C> <C> <C>
Michael S.
Starnes -- -- -- -- -- --
Carl J.
Mungenast 40,000 88.9% $23.00 2/06/05 $578,583 $1,249,312
James W.
Welch -- -- -- -- -- --
Gary L.
Hardeman -- -- -- -- -- --
M.J.
Barrow -- -- -- -- -- --
</TABLE>
18
<PAGE>
The following table sets forth information with respect to stock options
exercised by the Chief Executive Officer and each of the four other
most highly compensated executive officers during the year ended
December 31, 1995.
<TABLE>
<CAPTION>
Aggregated Option Exercises in 1995 and Year-End Value Table
Number of Value of Unexercised
Unexercised Options In-the-Money Options
Shares At December 31, 1995 At December 31, 1995(1)
Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Michael S.
Starnes -- -- -- 60,000 -- --
Carl J.
Mungenast -- -- -- 90,000 -- --
James W.
Welch -- -- 76,666 33,334 $1,241,654 $170,842
Gary L.
Hardeman -- -- 46,668 26,666 545,849 85,408
M.J.
Barrow -- -- 26,666 33,334 341,658 170,842
<FN>
(1) This amount is the aggregate of the number of options multiplied by the
difference between the last sale price of $20.00 of the Common Stock
on the last trading day in 1995 minus the exercise price for those options.
</FN>
</TABLE>
19
<PAGE>
Employment Contracts
The Company has employment agreements with Michael S. Starnes, Carl J.
Mungenast, James W. Welch and M.J. Barrow. Under each of these employment
agreements, the Executive Compensation Committee of the Company's Board of
Directors determines the annual base salary of the executive officer and may
award discretionary bonuses to the executive officer. Each executive officer
is entitled to participate in all employee benefit plans generally available
to the Company's employees. The Company shall reimburse all ordinary and
necessary business expenses incurred by each of these executive officers.
Each of these employment agreements provide that the employment
of the executive officer may be terminated by either the Company
or the executive officer upon thirty days notice. Mr.
Mungenast's and Mr. Welch's employment agreements contain certain
non-competition and confidentiality provisions which continue
after the term of their employment.
Compensation of Directors
Directors who are not full-time employees receive a fee of $1,500 for each
meeting of the Board of Directors they attend and for each Committee meeting
they attend if not held on a day on which a meeting of the Board of Directors
is held. Directors who are also officers of the Company receive no additional
compensation for services as directors. Under the Company's Non-Employee
Director Stock Option Plan, which was approved by the shareholders, each
non-employee director received on September 14, 1994, an automatic, non-
discretionary award of an option to purchase 2,500 shares of Common Stock
and all new non-employee directors will receive a similar award upon their
election to the Board. The option price per share is equal to the fair
market value of the Common Stock on the date of the grant. Each stock option
shall vest and become exercisable in five (5) equal annual installments on
the anniversary dates of the date of the grant. If a non-employee director
ceases to be a director of the Company for any reason other than death or
disability, all options granted to him or her shall immediately terminate;
provided, however, the non-employee director shall have thirty (30) days
from the date on which he or she ceased to be a director to exercise any
portion of the option which was exercisable on the date that the non-employee
director ceased to be a director of the Company.
Compensation Committee Interlocks and Inside Participation
in Compensation Decisions
Compensation decisions regarding the executive officers of the Company are
made by the Executive Compensation Committee of the Company's Board of
Directors. The Executive Compensation Committee consists of Michael S.
Starnes, the Company's President and Chief Executive Officer, and the Company's
two non-employee directors, Morris H. Fair and Jack H. Morris, III.
20
<PAGE>
Compliance With Section 16(a) of the
Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons
who own more than ten percent of a registered class of the Company's equity
securities, to file reports of securities ownership and changes in such
ownership with the Securities and Exchange Commission (the "SEC"). Officers,
directors and greater than ten-percent shareholders also are required by rules
promulgated by the SEC to furnish the Company with copies of all Section 16(a)
forms they file.
The Company believes that, during the fiscal year ended December 31, 1995,
all filing requirements under Section 16(a) of the Exchange Act applicable to
its officers, directors and greater than ten percent beneficial owners were
complied with on a timely basis.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock, par value $.01 per share. As of March 1, 1996, the Company had
12,347,634 shares outstanding. The following table set forth certain
information as of March 1, 1996, with respect to the beneficial ownership of
the Company's Common Stock by (i) each person known to the Company to be the
beneficial owner of more than 5% of the Company's Common Stock; (ii) each
director of the Company; (iii) each executive officer named in the Summary
Compensation Table in Item 11; and (iv) all directors and executive officers
as a group.
21
<PAGE>
<TABLE>
<CAPTION>
OWNERSHIP OF COMMON STOCK
Name of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership(1) of Class
________________ _______________________ _________
<S> <C> <C>
Michael S. Starnes
c/o M.S. Carriers, Inc.
3171 Directors Row
Memphis, Tennessee 38116 ......... 3,106,058 25.2%
Wellington Management Company
75 State Street
Boston, Massachusetts 02109 ..... 1,600,280(2) 13.0%
The Capital Group Companies, Inc.,
Capital Research and Management
Company, SMALLCAP World Fund, Inc.
and Capital Guardian Trust Company
333 South Hope Street
Los Angeles, CA 90071 .......... 1,478,200(3) 12.0%
Carl J. Mungenast ................. 8,178(4) *
James W. Welch .................... 145,771(5) 1.2%
Gary L. Hardeman .................. 53,334 *
M.J. Barrow ....................... 52,992(6) *
Robert P. Hurt .................... 41,227(7) *
Morris H. Fair .................... 19,500(8) *
Jack H. Morris, III ............... 22,500(9) *
All executive officers and directors
as a group ...................... 3,396,326 27.3%
<FN>
*Indicates less than 1%.
(1) Beneficial ownership of Common Stock consists of sole voting and
investment power except as otherwise indicated.
(2) According to a Schedule 13G (Amendment No. 8) dated February 6, 1996,
Wellington Management Company claims as of December 31, 1995, shared voting
power with respect to 883,990 shares and shared investment power with respect
to 1,600,280 shares. Wellington Management Company does not claim sole
voting power or sole investment power with respect to any of these shares.
(3) According to a Schedule 13G (Amendment No. 1) dated February 9, 1996,
Capital Guardian Trust Company and Capital Research and Management Company,
operating subsidiaries of the Capital Group Companies, Inc., claim as of
December 29, 1995, sole voting power with respect to 616,000 and 837,000
shares, respectively, and sole investment power with respect to 641,200 and
837,000 shares, respectively, for a combined total of 1,478,200 shares which
were owned by various institutional investors.
22
<PAGE>
(4) The shares of Common Stock shown as beneficially owned by Carl J.
Mungenast represent 178 shares allocated to his account in the Company's
Retirement Savings Plan and 8,000 shares which he may acquire through the
exercise of stock options within 60 days of March 1, 1996.
(5) The shares of Common Stock shown as beneficially owned by James W. Welch
represent 100,000 shares owned directly by him, 5,771 shares allocated to his
account in the Company's Retirement Savings Plan and 40,000 shares which he
may acquire through the exercise of stock options within 60 days of March 1,
1996.
(6) The shares of Common Stock shown as beneficially owned by M. J. Barrow
represent 8,965 shares owned directly by him, 60 shares owned by him as
custodian for his children, 3,967 shares allocated to his account in the
Company's Retirement Savings Plan and 40,000 shares which he may acquire
through the exercise of stock options within 60 days of March 1, 1996.
(7) The shares of Common Stock shown as beneficially owned by Robert P. Hurt
represent 17,600 shares owned directly by him, 3,627 shares allocated to his
account in the Company's Retirement Savings Plan and 20,000 shares which he
may acquire through the exercise of stock options within 60 days of March 1,
1996.
(8) The shares of Common Stock shown as beneficially owned by Morris H. Fair
represent 19,000 shares owned directly by him and 500 shares which he may
acquire through the exercise of stock options within 60 days of March 1, 1996.
(9) The shares of Common Stock shown as beneficially owned by Jack H. Morris
represent 22,000 shares owned directly by him and 500 shares which he may
acquire through the exercise of stock options within 60 days of March 1, 1996.
</FN)
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Starnes owns 20% and his brother, C.R. Bobby Starnes, owns 40% of the
common stock of Southern Drayage, Inc., a Mississippi corporation ("SDI").
SDI is a motor common carrier providing services in markets which are not
served by the Company. During 1995, the Company paid SDI $352,000 for
transportation services provided by SDI to the Company's logistics operations.
The terms on which SDI provided services to the Company were no less
favorable than those which the Company could have obtained from
other carriers.
During 1995, the Company paid Richards Aviation, Inc., a Tennessee
corporation ("Richards"), a total of $63,000 for charter aircraft services
which Richards provided to the Company. One of the aircrafts which Richards
utilizes in its charter business is a Lear jet in which Mr. Starnes owns
an indirect one-third interest. The terms of Richards' charter services
to the Company were no less favorable than those which the Company could have
obtained from other providers of charter aircraft services.
23
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K
(a) Financial Statements and Financial Statement Schedules.
(1) The following consolidated Financial Statements of the Company and
its Subsidiaries are included herein on the page indicated.
Page No.
Report of Independent Auditor
Consolidated Balance Sheets 29
Consolidated Statements of Income 30-31
Consolidated Statements of Stockholders' Equity 32
Consolidated Statements of Cash Flow 33
Notes of Consolidated Statements 34
35-45
(2) Financial Statement Schedules
Schedule II - Valuation and Qualifying Accounts for the Company is
included herein on page 46.
(3) Exhibits -- An Exhibit Index of the exhibits required by Item 601 of
Regulation S-K is included herein on page 26-27.
(b) Reports on Form 8-K.
The Company filed one report on Form 8-K during the last quarter of 1995.
The Form 8-K was filed with the Securities and Exchange Commission on
November 8, 1995, and reported that the Company's Board of Directors had
authorized the repurchase of up to one million shares of the Company's
Common Stock. No financial statements were filed with the Form 8-K.
24
<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.
M.S. Carriers, Inc.
(Registrant)
By: s/ Michael S. Starnes
Michael S. Starnes
Chairman of the Board, President
and Chief Executive 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/ Michael S. Starnes Chairman of the Board, President,
Michael S. Starnes Chief Executive Officer and March 26, 1996
Director Date
s/ Carl J. Mungenast Executive Vice President, Chief
Carl J. Mungenast Operating Officer and March 28, 1996
Director Date
s/ James W. Welch Senior Vice President - March 26, 1996
James W. Welch Marketing and Director Date
s/ M.J. Barrow Senior Vice President - March 26, 1996
M.J. Barrow Finance, Secretary - Treasurer Date
and Director
s/ Robert P. Hurt Vice President - Maintenance March 28, 1996
Robert P. Hurt and Director Date
s/ Jack H. Morris, III Director March 26, 1996
Jack H. Morris, III Date
s/ Morris H. Fair Director March 26, 1996
Morris H. Fair Date
s/ Dwight M. Bassett Controller and Director of March 26, 1996
Dwight M. Bassett Accounting Date
25
<PAGE>
EXHIBIT INDEX
Exhibit Page Number or Incorporation
Number Description By Reference
3(i).1 Restated Charter of M.S. Carriers, Incorporated by reference from
Inc. exhibits to the registrant's
Registration Statement on Form
S-1 (Registration Number
33-12070).
3(i).2 Articles of Amendment to Charter Incorporated by reference from
of M.S. Carriers, Inc. exhibits to the registrant's
Registration Statement on Form
S-3 (Registration Number
33-63280).
3(ii) Amended and Restated By-Laws of M.S. Incorporated by reference from
Carriers, Inc. exhibits to the registrant's
Registration Statement on
Form S-3 (Registration Number
33-63280).
10.1 Incentive Stock Option Plan Incorporated by reference from
exhibits to the registrant's
Registration Statement on
Form S-1 (Registration Number
33-12070).
10.2 Amendment to Incentive Stock Option Incorporated by reference from
Plan exhibits to the registrant's
Registration Statement on
Form S-1 (Registration Number
33-12070).
10.3 1993 Stock Option Plan Incorporated by reference from
exhibits to the registrant's
Registration Statement on
Form S-3 (Registration Number
33-63280).
10.4 Non-Employee Directors Stock Option Incorporated by reference
Plan from registrant's Proxy
Statement dated March 31, 1995.
10.5 Employment Agreements with James W. Incorporated by reference
Welch, M.J. Barrow and Robert P. from exhibits to the
Hurt registrant's Statement on
Form S-1 (Registration
Number 33-12070).
26
<PAGE>
10.6 Employment Agreement with Michael S. Incorporated by reference
Starnes from exhibits to the
registrant's 2nd Quarter
1995 Form 10-Q.
10.7 Employment Agreement with Carl J. Incorporated by reference
Mungenast from exhibits to the
registrant's 2nd Quarter
1995 Form 10-Q.
10.8 1993 Incentive Plan for Designated Incorporated by reference
Key Employees from exhibits to the
registrant's 2nd Quarter
1995 Form 10-Q.
11 Statement regarding computation of Page 47
per share
21 Subsidiaries of the Registrant Page 48
27 Financial Data Schedule Page 49
27
<PAGE>
Annual Report on Form 10-K
Item 8, Item 14(a)(1) and (2), (c) and (d)
Index of Financial Statements and Financial
Statement Schedule
Financial Statements and Supplementary Data
Certain Exhibits
Financial Statement Schedule
Year ended December 31, 1995
M.S. Carriers, Inc.
Memphis, Tennessee
28
<PAGE>
Report of Independent Auditors
Board of Directors
M.S. Carriers, Inc.
We have audited the accompanying consolidated balance sheets of M.S.
Carriers, Inc. and subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of income, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1995. Our
audits also included the financial statement schedule listed in the
Index at Item 14(a). These financial statements and schedule are
the responsibility of the Company's management. Our responsibility
is to express an opinion on these 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 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 financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of M.S. Carriers, Inc. and subsidiaries at December 31, 1995 and
1994, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information
set forth therein.
As discussed in Note 4 to the consolidated financial statements, the
Company changed its method of accounting for income taxes in the year
ended December 31, 1993.
s/ Ernst & Young LLP
Memphis, Tennessee
January 11, 1996
29
<PAGE>
<TABLE>
M.S. Carriers, Inc. and Subsidiaries
Consolidated Balance Sheets
<CAPTION>
December 31
1995 1994
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 486,459 $ 30,806,731
Accounts receivable:
Trade, net 27,643,708 33,327,599
Officers and employees 1,181,729 457,165
____________ ____________
28,825,437 33,784,764
Recoverable income taxes 4,277,297
Deferred income taxes 4,136,679 4,774,000
Prepaid expenses and other 5,125,254 4,419,081
____________ ____________
Total current assets 42,851,126 73,784,576
Property and equipment:
Land and land improvements 5,568,043 6,201,674
Buildings 28,589,080 23,393,800
Revenue equipment 254,132,265 232,771,820
Service equipment and other 33,757,292 28,531,425
Construction in progress 3,218,800 2,813,438
____________ ____________
325,265,480 293,712,157
Accumulated depreciation
and amortization 91,407,638 95,019,410
____________ ____________
233,857,842 198,692,747
Other assets 3,225,277 3,595,196
____________ ____________
Total assets $279,934,245 $276,072,519
____________ ____________
____________ ____________
</TABLE>
30
<PAGE>
<TABLE>
M.S. Carriers, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)
<CAPTION>
December 31
1995 1994
____________________________________
<S> <C> <C>
Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable $ 4,336,847 $ 6,341,525
Accrued expenses 8,130,784 8,277,724
Claims payable 13,142,682 12,325,226
Income taxes payable 1,256,186
Current maturities of
long-term obligations 16,666,155 16,693,512
___________ ____________
Total current liabilities 42,276,468 44,894,173
Long-term obligations,
less current maturities 47,376,558 51,186,613
Deferred income taxes 37,757,200 32,068,000
Stockholders' equity:
Common Stock, $.01 par value:
Authorized shares- 20,000,000
Issued and outstanding shares 12,464,400
in 1995 and 12,878,300 in 1994 124,644 128,783
Additional paid-in capital 62,076,687 64,137,909
Retained earnings 92,301,919 84,842,041
Equity adjustment from foreign
currency translation (1,979,231) (1,185,000)
______________ _____________
Total stockholders' equity 152,524,019 147,923,733
______________ _____________
Total liabilities and
stockholders' equity $ 279,934,245 $ 276,072,519
______________ _____________
______________ _____________
<FN>
See accompanying notes.
</FN>
</TABLE>
31
<PAGE>
<TABLE>
M.S. Carriers, Inc. and Subsidiaries
Consolidated Statements of Income
<CAPTION>
Year ended December 31
1995 1994 1993
____________________________________________
<S> <C> <C> <C>
Operating revenues $333,069,506 $292,882,828 $224,716,304
Operating expenses:
Salaries, wages and benefits 126,176,172 111,492,850 84,819,837
Operations and maintenance 66,961,380 64,497,963 60,880,244
Taxes and licenses 10,024,270 8,746,479 6,900,546
Insurance and claims 15,666,099 14,470,493 9,545,503
Communications and utilities 6,080,563 4,698,024 4,134,864
Depreciation and amortization 39,142,879 33,694,434 27,360,554
Rent and purchased transportation 41,945,874 23,564,113 4,245,735
Other 2,434,767 2,058,001 1,792,382
____________ ____________ _____________
308,432,004 263,222,357 199,679,665
____________ ____________ _____________
Operating income 24,637,502 29,660,471 25,036,639
Other expense (income):
Interest expense 5,524,467 1,801,981 2,041,114
Interest income (1,448,577)
Other 24,081 (147,994) (118,445)
____________ ____________ _____________
4,099,971 1,653,987 1,922,669
____________ ____________ _____________
Income before income taxes and
cumulative effect of change in
accounting for income taxes 20,537,531 28,006,484 23,113,970
Income taxes 7,386,439 10,856,000 9,512,000
____________ ____________ _____________
Income before cumulative effect
of accounting change 13,151,092 17,150,484 13,601,970
Cumulative effect as of
January 1, 1993 of change in
accounting for income taxes 500,000
_____________ ____________ ____________
Net income $ 13,151,092 $ 17,150,484 $ 14,101,970
_____________ ____________ ____________
_____________ ____________ ____________
Earnings per share:
Income before cumulative effect
of accounting change $1.01 $1.31 $1.13
Cumulative effect of accounting
change 0.04
_____________ ____________ ____________
Net income $1.01 $1.31 $1.17
_____________ ____________ ____________
_____________ ____________ ____________
Weighted average common shares
and common share equivalents 13,028,562 13,097,586 12,036,386
_____________ ____________ ____________
_____________ ____________ ____________
<FN>
See accompanying notes.
</FN>
</TABLE>
32
<PAGE>
<TABLE>
M.S. Carriers, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
<CAPTION>
Equity
Adjustment
Additional From Foreign
Common Stock Paid-in Retained Currency
Shares Amount Capital Earnings Translation Total
___________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Balance at
January 1, 1993 10,679,666 $106,797 $18,272,530 $53,589,587 $ $71,968,914
Net income for 1993 14,101,970 14,101,970
Issuance of
Common Stock
upon exercise of
stock options 39,666 397 304,022 304,419
Issuance of
Common Stock 2,156,300 21,563 45,531,997 45,553,560
Tax benefit of
deduction for
employee exercise
of stock options 10,203 10,203
____________________________________________________________________________________
Balance at
December 31, 1993 12,875,632 128,757 64,118,752 67,691,557 131,939,066
Net income
for 1994 17,150,484 17,150,484
Issuance of
Common Stock
upon exercise of
stock options 2,668 26 19,157 19,183
Equity adjustment
from foreign
currency
translation (1,185,000) (1,185,000)
_______________________________________________________________________________________
Balance at December
31,1994 12,878,300 128,783 64,137,909 84,842,041 (1,185,000) 147,923,733
Net Income for 1995 13,151,092 13,151,092
Repurchase of
Common Stock (413,900) (4,139) (2,061,222) (5,691,214) (7,756,575)
Equity adjustment
from foreign
currency translation (794,231) (794,231)
_______________________________________________________________________________________
Balance at December
31,1995 12,464,400 $124,644 $62,076,687 $92,301,919 $(1,979,231) $152,524,019
<FN>
See accompanying notes.
</FN>
</TABLE>
33
<PAGE>
<TABLE>
M.S. Carriers, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
<CAPTION>
Year ended December 31
1995 1994 1993
_____________________________________________
<S> <C> <C> <C>
Operating activities
Net income $13,151,092 $ 17,150,484 $ 14,101,970
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 39,142,879 33,694,434 27,360,554
Other (208,613) (131,483) (130,819)
Provision for deferred
income taxes 6,326,521 4,300,000 4,668,000
Cumulative effect of change
in accounting principle (500,000)
Changes in operating assets
and liabilities:
Accounts receivable 4,959,327 (10,988,038) (4,294,336)
Current and other assets (5,407,782) (70,719) (4,624,213)
Trade accounts payable (2,004,678) 3,249,456 (3,262,213)
Other current liabilities (585,670) 8,284,040 2,613,749
__________________________________________________
Net cash provided by
operating activities 55,373,076 55,751,140 36,194,330
Investing activities
Purchases of property
and equipment (76,590,161) (100,346,967) (66,058,904)
Proceeds from disposals
of property and equipment 2,490,800 31,378,170 82,210
__________________________________________________
Net cash used in
investing activities (74,099,361) (68,968,797) (65,976,694)
Financing activities
Proceeds from long-term
obligations and revolving
line of credit 26,875,000 147,271,905 107,724,000
Proceeds from issuance
of Common Stock 19,183 45,857,979
Repurchase of Common Stock (7,756,575)
Principal payments on
long-term obligations
and revolving line of credit (30,712,412) (103,376,780) (123,735,365)
_________________________________________________
Net cash provided by
(used in) financing activities (11,593,987) 43,914,308 29,846,614
_________________________________________________
Increase (decrease) in cash
and cash equivalents (30,320,272) 30,696,651 64,250
Cash and cash equivalents
at beginning of year 30,806,731 110,080 45,830
_________________________________________________
Cash and cash equivalents
at end of year $ 486,459 $ 30,806,731 $ 110,080
_________________________________________________
_________________________________________________
<FN>
See accompanying notes.
</FN>
</TABLE>
34
<PAGE>
M.S. Carriers, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995
1. Significant Accounting Policies
Organization and Principles of Consolidation
The consolidated financial statements include the accounts of
M.S. Carriers, Inc. and its wholly-owned subsidiaries, M.S. Carriers
Warehousing and Distribution, Inc., M.S. Carriers Logistics Mexico,
S.A. de C.V. and M.S. International, Inc. Significant intercompany
accounts have been eliminated in consolidation.
Business
M.S. Carriers, Inc. is an irregular route, truckload carrier transporting a
wide range of commodities in the eastern two-thirds of the United States,
and the provinces of Ontario and Quebec, Canada, with interline service to
Mexico. The Company may transport any type of freight (except certain
types of explosives, household goods and commodities in bulk) from any
point in the continental United States to any other point in another state
over any route selected by the Company. The Company's primary traffic
flows are between the Middle South and Southwest, Midwest, Central States,
Southeast and Northeast. The principal types of freight transported are
packages, retail goods, non-perishable foodstuffs, paper and paper products,
household appliances, furniture and packaged petroleum products.
Concentrations of credit risk with respect to trade accounts receivable are
limited due to the large number of entities comprising the Company's customer
base and their dispersion across many different industries. The Company
performs ongoing credit evaluations and generally does not require collateral.
Revenue Recognition
Operating revenues are recognized on the date the freight is
delivered.
Cash Equivalents
The Company considers all highly liquid investments with a maturity
of three months or less when purchased to be cash equivalents.
35
<PAGE>
Property and Equipment
Property and equipment are stated at cost. At the time of trade-in,
the cost of revenue equipment is adjusted for any difference
between the trade-in value and net book value. Depreciation, which
includes amortization of assets held under capitalized leases, is
computed on the straight-line method over the estimated useful
lives as follows:
Buildings 15-30 Years
Revenue equipment 4-6 Years
Service equipment and other 3-5 Years
Tires and tubes purchased as part of revenue equipment are
capitalized as a cost of the equipment. Replacement tires and tubes
are expensed when placed in service.
Foreign Currency Translation
The functional currency of the Company's foreign subsidiary is the
local currency. Adjustments resulting from the translation of the
financial statements of the foreign subsidiary are reflected as a
separate component of stockholders' equity.
Included in other assets in the accompanying consolidated financial
statements is an investment of approximately $1,254,000 and $1,743,000
at December 31, 1995 and 1994, respectively, in a Mexican trucking
company which is accounted for under the equity method. The operations
of the Mexican trucking company during 1995 and 1994 were approximately
break even. The Company considers the Mexican peso to be the functional
currency.
Income Taxes
The Company accounts for income taxes under the provisions of
Financial Accounting Standards Board Statement No.(FASB)109,
Accounting for Income Taxes. (see note 4).
Earnings Per Share
Earnings per share is computed based on the weighted average
number of common shares outstanding during the year, adjusted
to include common stock equivalents attributable to dilutive options.
36
<PAGE>
Risks and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and the accompanying notes. Actual results could differ
from those estimates.
Long-Lived Assets
In March, 1995, the FASB issued Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
which requires impairment losses to be recorded on long-lived assets used
in operations when indicators of impairment are present and the undiscounted
cash flows estimated to be generated by those assets are less than
carrying amount of those assets. Statement 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. The
Company will adopt Statement 121 in the first quarter of 1996 and, based
on current circumstances, does not believe the effect of adoption will be
material.
Stock-Based Compensation
The Company accounts for employee stock-based compensation awards under
the provisions of APB Opinion No 25, Accounting for Stock Issued to Employees.
2. Long-Term Obligations
Long-term obligations consist of the following:
<TABLE>
<CAPTION>
December 31
1995 1994
___________________________________
<S> <C> <C>
Equipment loans $25,612,761 $38,369,490
Capitalized lease obligations 25,573,952 29,510,635
Revolving line of credit 12,856,000
___________________________________
64,042,713 67,880,125
Less current maturities (16,666,155) (16,693,512)
___________________________________
$47,376,558 $51,186,613
___________________________________
___________________________________
</TABLE>
37
<PAGE>
The equipment loans are payable through 1998 in varying monthly
installments with interest at rates ranging from 5.7% to 8.12%
and $6,000,000 of these loans are secured by revenue equipment with
a net book value of approximately $6,500,000.
The Company has a line of credit available for borrowings up
to $30,000,000, with interest at the lower of the bank's prime
rate or the 30-day LIBOR rate plus .45% (6.2625% at December 31,
1995). There are no commitment fees or compensating balance
requirements for the line of credit, which expires June 1,
1997.
During 1994, the Company entered into sale leaseback transactions
related to revenue equipment. These capitalized leases are secured
by the related revenue equipment with a net book value at December
31, 1995 and 1994 of approximately $26,100,000 and $29,700,000,
respectively, which is a net of accumulated amortization of
$3,900,000 and $300,000, respectively. The remaining lease terms
are from 2 to 4 years and contain renewal or fixed price purchase
options and guarantees of residual value at the end of the lease terms.
Certain of the Company's debt agreements contain covenants including
the ratio of notes payable to net worth and cash flow.
The future maturities of long-term debt and future minimum
lease payments under capitalized lease obligations, by year
and in the aggregate, consist of the following at December 31,
1995:
<TABLE>
<CAPTION>
Capitalized
Long-Term Lease
Debt Obligations
___________________________________
<S> <C> <C>
1996 $12,321,683 $ 6,371,200
1997 21,508,951 7,224,316
1998 4,638,127 8,840,043
1999 - 8,304,156
___________________________________
30,739,715
Amounts representing
interest (5,165,763)
___________________________________
Total long-term
obligations $38,468,761 $25,573,952
___________________________________
___________________________________
</TABLE>
38
<PAGE>
The Company paid interest of approximately $4,026,000 in 1995,
$1,819,000 in 1994, and $2,060,000 in 1993.
3. Claims Payable
Under an agreement with its insurance underwriters, the
Company self-insures for liability of $1,500,000 for the initial
occurence per policy year, $1,250,000 for the second occurrence
per policy year, and $1,000,000 for each occurrence thereafter
involving property damage. Liability in excess of this amount is
assumed by the insurance underwriters. Reserves for claims are
provided in amounts which management considers adequate.
The Company self-insures employee health claims up to $175,000 per
employee per year and workers' compensation claims up to $500,000
per employee per year and has provided reserves which management considers
adequate for the Company's estimated liability for covered claims.
4. Income Taxes
In February 1992, the Financial Accounting Standards Board
issued Statement No. 109, Accounting for Income Taxes. The
Company adopted the provisions of the new standard in its
financial statements for the year ended December 31, 1993.
As permitted by Statement 109, prior year financial statements
were not restated to reflect the change in accounting
method. The cumulative effect as of January 1, 1993 of
adopting Statement 109 increased net income by $500,000 and
$.04 per share for the year ended December 31, 1993.
As a result of the change in the federal statutory rate from
34 percent to 35 percent effective January 1, 1993 resulting
from legislation enacted during 1993, the Company recorded an
adjustment to increase income tax expense by approximately
$550,000 in 1993.
39
<PAGE>
<TABLE>
<CAPTION>
Income taxes consist of the following:
Year ended December 31
1995 1994 1993
__________________________________________
<S> <C> <C> <C>
Current:
Federal $1,115,242 $ 5,835,000 $4,134,000
State (55,324) 721,000 710,000
__________________________________________
1,059,918 6,556,000 4,844,000
Deferred:
Federal 5,273,783 3,665,000 4,022,000
State 1,052,738 635,000 646,000
__________________________________________
6,326,521 4,300,000 4,668,000
__________________________________________
$7,386,439 $10,856,000 $9,512,000
__________________________________________
__________________________________________
</TABLE>
The effective tax rate varied from the statutory federal
income tax rate of 35% as follows:
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
______________________________________________
<S> <C> <C> <C>
Taxes at
statutory rate $ 7,188,136 $ 9,802,269 $ 8,089,890
Increase (decrease)
in taxes arising
from:
State income
taxes, net of
federal tax
benefits 734,215 1,001,231 826,324
Other (535,912) 52,500 595,786
________________________________________________
$ 7,386,439 $10,856,000 $ 9,512,000
________________________________________________
________________________________________________
</TABLE>
The Company paid income taxes of approximately $6,593,000 in 1995,
$2,573,000 in 1994, and $6,949,000 in 1993.
The Company has alternative minimum tax credit carryforwards of
approximately $1,057,000 which have no expiration date and which
have been utilized for financial statement purposes.
40
<PAGE>
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for income tax purposes. Significant components of the
Company's deferred tax liabilities and assets as of December
31 are as follows:
<TABLE>
<CAPTION>
1995 1994
________________________________
<S> <C> <C>
Deferred tax liabilities:
Property and equipment $38,075,635 $ 30,408,000
Other - net 1,846,513 1,660,000
_________________________________
Total deferred tax liabilities 39,922,148 32,068,000
Deferred tax assets:
Claims payable 4,903,403 4,588,000
Other net 1,398,224 186,000
_________________________________
Total deferred tax assets 6,301,627 4,774,000
_________________________________
Net deferred tax liabilities $33,620,521 $ 27,294,000
</TABLE>
5. Employees' Benefit Plans
The Company has a profit sharing plan (the Plan) for all
employees who are 21 years of age or older and have completed
1,000 hours of service. The Plan provides for discretionary
contributions by the Company not to exceed income before
federal income taxes for the year and limited to the amount
permitted under the Internal Revenue Code as a deductible
expense. Each eligible employee may also contribute up to 10%
of the employee's annual compensation. The Company's
contribution was approximately $323,000 for 1994 and $345,000 for
1993. No contributions were made by the Company during 1995.
The Company also has a defined contribution plan under Section
401(k) (the 401(k) Plan) of the Internal Revenue Code which
provides for voluntary contributions by employees and matching
contributions by the Company. All employees who are 19 years
of age or older and have completed six months of service are
eligible for the 401(k) Plan which provides each participant
with the option of contributing from 1% to 15% of the employee's
annual compensation. The Company matches the employee contribution up
41
<PAGE>
to 50% of the participant's contribution, but limited to a maximum of 3%
of the participant's compensation. The Company's contribution, net
of forfeitures, was approximately $1,078,000 in 1995, $840,000 for
1994, and $678,000 for 1993.
6. Operating Leases
The Company leases revenue equipment under operating leases
with terms of less than one year. Rent and purchased
transportation includes rental of revenue equipment of
approximately $130,000 in 1995, $164,000 in 1994,
$465,000 in 1993.
Other operating expenses include rentals of certain office,
terminal and warehouse facilities of $766,000 in 1995, $653,000
in 1994, and $481,000 in 1993.
7. Stockholders' Equity
<TABLE>
The Company has stock option plans for key employees and
outside directors. Option transactions are summarized as
follows:
<CAPTION>
1995 1994
_______________________________
<S> <C> <C>
Options outstanding
at beginning of year 627,000 384,668
Options granted 45,000 245,000
Options cancelled (18,000)
Options exercised - (2,668)
_______________________________
Options outstanding
at of end of year 654,000 627,000
_______________________________
_______________________________
Option price range
as of December 31 $2.00-$25.50 $2.00-$25.50
_______________________________
_______________________________
Options exercisable
at December 31 229,669 214,002
_______________________________
_______________________________
</TABLE>
Shares reserved for future grants were 486,000 at December 31, 1995.
42
<PAGE>
Options are granted at the then-prevailing market price. They
become exercisable in equal parts over the succeeding three to
five years.
In November, 1995, the Board of Directors authorized the purchase of
up to one million shares of the Company's Common Stock in the open
market. Approximately 414,000 shares were repurchased and retired under
this authorization in 1995.
In June and July 1993, the Company sold to the public
2,000,000 and 156,300 shares, respectively, of common stock in
a secondary public offering. The net proceeds of the sale of
$45,553,560 were used to pay off $33,900,000 of long-term debt
and to purchase additional revenue equipment.
8. Significant Customers
The Company operates primarily in one business segment, that of a
truckload carrier. One customer, Sears, accounted for more
than 10% of revenues in 1995, 1994, and 1993 with revenues of
$59,533,000, $43,876,000 and $33,900,000, respectively.
9. Commitments and Contingencies
The Company has noncancelable contracts to purchase revenue
equipment of approximately $17,755,000 during 1996.
The Company is involved in certain legal actions and claims
arising in the ordinary course of business. It is the opinion
of management that such litigation and claims will be resolved without
material effect on the Company's financial position or results of
operations.
43
<PAGE>
10. Fair Value of Financial Instruments
The following methods and assumptions were used by the Company
in estimating its fair value disclosures for financial
instruments:
Cash and cash equivalents: The carrying amount reported in
the balance sheet for cash and cash equivalents approximates
its fair value.
Accounts receivable and accounts payable: The carrying amounts
reported in the balance sheet for accounts receivable and accounts
payable approximate their fair value.
Long-term obligations, including current portion: The fair values
of the Company's debt are estimated using discounted cash flow analyses,
based on the Company's current incremental borrowing rates for similar
types of borrowing arrangements.
<TABLE>
<CAPTION>
The carrying amounts and fair values of the Company's financial
instruments at December 31 are as follows:
1995 1994
_________________________________________________________
Carrying Fair Carrying Fair
Amount Value Amount Value
________ _____ ________ _____
<S> <C> <C> <C> <C>
Cash and cash
equivalents $ 486,459 $ 486,459 $30,806,731 $30,806,731
Accounts
receivable 28,825,437 28,825,437 33,784,764 33,784,764
Accounts
payable 4,336,847 4,336,847 6,341,525 6,341,525
Long-term debt 64,042,713 65,765,747 67,880,125 69,950,130
</TABLE>
44
<PAGE>
11. Selected Quarterly Data (Unaudited)
Summarized quarterly data for 1995 and 1994 follows.
<TABLE>
<CAPTION>
1995
March 31 June 30 September 30 December 31
________________________________________________________
<S> <C> <C> <C> <C>
1995
Operating revenues $81,701,370 $84,541,100 $84,326,406 $82,500,630
Operating expenses 74,973,573 77,221,560 79,399,971 76,836,900
________________________________________________________
Operating income 6,727,797 7,319,540 4,926,435 5,663,730
Other expense 849,108 983,678 915,978 1,351,207
________________________________________________________
Income before taxes 5,878,689 6,335,862 4,010,457 4,312,523
Income taxes 2,115,000 2,311,123 1,429,377 1,530,939
________________________________________________________
Net income $ 3,763,689 $ 4,024,739 $ 2,581,080 $ 2,781,584
________________________________________________________
________________________________________________________
Earnings per share:
Net income per share $.29 $.31 $.20 $.22
________________________________________________________
________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
1994
March 31 June 30 September 30 December 31
________________________________________________________
<S> <C> <C> <C> <C>
1994
Operating revenues $60,432,420 $69,558,611 $80,303,567 $82,588,230
Operating expenses 56,118,951 61,862,141 71,016,620 74,224,645
________________________________________________________
Operating income 4,313,469 7,696,470 9,286,947 8,363,585
Other expense 290,532 376,758 473,932 512,765
________________________________________________________
Income before taxes 4,022,937 7,319,712 8,813,015 7,850,820
Income taxes 1,602,000 2,901,000 3,463,000 2,890,000
________________________________________________________
Net income $ 2,420,937 $ 4,418,712 $ 5,350,015 $ 4,960,820
________________________________________________________
________________________________________________________
Earnings per share:
Net income per share $.18 $.34 $.41 $.38
________________________________________________________
________________________________________________________
</TABLE>
45
<PAGE>
<TABLE>
Schedule II
Valuation and Qualifying Accounts
M.S. Carriers, Inc.
<CAPTION>
Column A Column B Column C Column D Column E
______________________________________________________________________________________________________________________
Additions
___________________________________
Balance at Charged to Charged to Balance at
Beginning Costs and Other End
Description Of Period Expenses Accounts Deductions Of Period
______________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1995
Deducted from asset accounts:
Allowance for doubtful
accounts receivable $492,400 $202,176 $185,657 (1) $508,919
Year ended December 31, 1994
Deducted from asset accounts:
Allowance for doubtful
accounts receivable $559,881 $233,854 $301,335 (1) $492,400
Year ended December 31, 1993
Deducted from asset accounts:
Allowance for doubtful
accounts receivable $377,005 $187,594 $ 4,718 (1) $559,881
<FN>
(1) Uncollectible accounts written off, net of recoveries.
</FN>
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
Exhibit 11
Statement Regarding Computation of Per Share Earnings
M.S. Carriers, Inc.
Year ended December 31
1995 1994 1993
____________________________________________
<S> <C> <C> <C>
Primary
Weighted average shares and
share equivalents outstanding 13,028,562 13,097,586 12,036,386
Income before cumulative
effect of accounting change $13,151,092 $17,150,484 $13,601,970
Per share amount before
cumulative effect of
accounting change $1.01 $1.31 $1.13
Net income $13,151,092 $17,150,484 $14,101,970
Per share amount $1.01 $1.31 $1.17
Fully Diluted
Weighted average shares and
share equivalents outstanding 13,028,562 13,097,586 12,036,386
Net income $13,151,092 $17,150,484 $14,101,970
Per share amount $1.01 $1.31 $1.17
</TABLE>
47
<PAGE>
Exhibit 21
Subsidiaries of M.S. Carriers, Inc.
Jursidiction of
Subsidiary Incorporation
M.S. Carriers Warehousing & Distribution, Inc. Tennessee
M.S. Nationwide, Inc. (inactive) Tennessee
M.S. Carriers Logistics Mexico, S.A. de C.V. Mexico
M.S. International, Inc. Nevada
48
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1995, AND
THE RELATED CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR
DECEMBER 31, 1995, AND THE NOTES RELATED THERETO AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 486,459
<SECURITIES> 0
<RECEIVABLES> 28,152,627
<ALLOWANCES> 508,919
<INVENTORY> 0
<CURRENT-ASSETS> 42,851,126
<PP&E> 325,265,480
<DEPRECIATION> 91,407,638
<TOTAL-ASSETS> 279,934,245
<CURRENT-LIABILITIES> 42,276,468
<BONDS> 47,376,558
<COMMON> 124,644
0
0
<OTHER-SE> 152,399,375
<TOTAL-LIABILITY-AND-EQUITY> 279,934,245
<SALES> 0
<TOTAL-REVENUES> 333,069,506
<CGS> 0
<TOTAL-COSTS> 308,432,004
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,524,467
<INCOME-PRETAX> 20,537,531
<INCOME-TAX> 7,386,439
<INCOME-CONTINUING> 13,151,092
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,151,092
<EPS-PRIMARY> 1.01
<EPS-DILUTED> 1.01
</TABLE>
