[RETURN-COPY] EMAIL
[NOTIFY] 76437,1025
[SROS] NASD
[SUBMISSION-CONTACT]
[NAME] JAMES H. NEELD
[PHONE] 601-360-9021
[/SUBMISSION-CONTACT]
[TEXT]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Period Ended September 29, 1995
Commission File Number 0-14759
KLLM TRANSPORT SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware
64-0412551
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
Post Office Box 6098
Jackson, Mississippi
39288
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code
(601) 939-2545
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
4,509,251 Common Shares were outstanding as of
September 29, 1995.
<PAGE>
KLLM TRANSPORT SERVICES, INC. AND
SUBSIDIARIES
INDEX Page Number
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
September 29, 1995 (Unaudited) and
December 30, 1994 1
Consolidated Statements of Earnings (Unaudited)
Thirteen and thirty-nine weeks ended September
29, 1995 and September 30, 1994 2
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Thirty-nine weeks ended September 29, 1995 and
September 30, 1994 3
Notes to Condensed Consolidated Financial
Statements (Unaudited) 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K 7
<PAGE>
KLLM TRANSPORT SERVICES, INC
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance
with generally accepted accounting principles for interim
financial information. They have been prepared in
accordance
with the instructions to Form 10-Q and Article 10 of
Regulation S-X and accordingly, do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included.
NOTE B - ACQUISITION OF CORPORATION
Effective May 1, 1995, the Company acquired
substantially all of the assets of Vernon Sawyer, Inc., a
regional
dry-van truckload carrier based in Bastrop, Louisiana.
Prior operations of Vernon Sawyer, Inc. are immaterial to
the
Company's revenue, net earnings and earnings per share for
the periods ended September 29, 1995 and December 30,
1994.
Effective March 1, 1994, the Company acquired all of
the outstanding stock of Fresh International
Transportation, Inc., a company which provides temperature
controlled transportation via double-stack containers on
railroads. Results from operations of the Company include
operations of the acquired company since March 1, 1994.
The excess of purchase price over the fair value of the
assets acquired is classified as goodwill and is included in
intangibles in the accompanying balance sheet. Goodwill is
being amortized by the straight line method over fifteen
years.
Prior operations of Fresh International Transportation,
Inc. are immaterial to the Company's revenue, net
earnings and earnings per share for the periods ended
September 29, 1995 and December 30, 1994.
NOTE C - FISCAL YEAR
The Company has adopted a fiscal year-end on the
Friday nearest December 31. Accordingly, the third
quarter of 1995 ended on Friday, September 29, 1995.
NOTE D - COMMITMENTS AND CONTINGENCIES
During the first nine months of 1995, the Company
entered into certain operating leases for revenue equipment
with an average annual minimum rental payment of $4,057,000
through 1999.
The Company is involved in various claims and routine
litigation incidental to its business. Management is
of the opinion that the outcome of these matters will not
have a material adverse effect on the consolidated financial
position or results of consolidated operations of the
Company.
<PAGE>
KLLM TRANSPORT SERVICES, INC
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 29, December 30,
1995 1994
(Unaudited) (Note) 1994 nos.
are from the published balance sheet.
(In Thousands)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $0 $1,397
Accounts receivable 31,675 24,063
Inventories - at cost 1,535 1,191
Prepaid expenses:
Tires 4,067 5,314
Other 2,288 3,764
Deferred income taxes 1,450 1,450
__________ _________
Total current assets 41,015 37,179
Property and equipment 188,606 182,747
Less accumulated depreciation (58,619) (55,991)
_______ _______
129,987 126,756
Intangible assets, net (Note B) 2,711 2,142
________ _______
$173,713 $166,077
________ _______
________ _______
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $5,139 $4,000
Accounts payable and accrued expenses 12,494 8,670
Current maturities of long-term debt
and capital leases 6,075 2,483
_______ ________
Total current liabilities 23,708 15,153
Long-term debt and capital leases, less
current maturities 64,771 66,531
Deferred income taxes 16,550 16,550
Stockholders' equity:
Preferred Stock, $.01 value;
authorized 5,000,000 Shares;
none issued
Common Stock, $1 par value;
10,000,000 shares authorized;
issued shares - 4,552,219 in
1995 and 1994, respectively;
outstanding shares - 4,509,251
in 1995 and 4,481,251 in 1994. 4,552 4,552
Additional paid-in capital 32,946 33,121
Retained earnings 31,831 31,234
______ ______
69,329 68,907
Less Common Stock in Treasury, at cost,
42,968 shares in 1995
and 70,968 shares in 1994. (645) (1,064)
______ ______
Total Stockholders' Equity 68,684 67,843
______ ______
$173,713 $166,077
_______ ______
_______ ______
Note: The balance sheet at December 30, 1994 has been
derived from the audited financial statements
at the date indicated, but does not include all of the
information and footnotes required by generally
accepted accounting principles for complete financial
statements.
See accompanying notes.
<PAGE>
KLLM TRANSPORT SERVICES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
September 29, September 30, September 29, September 30,
1995 1994 1995 1994
(In Thousands, Except Per Share Amounts)
<S> <C> <C>
OPERATING REVENUE $66,379 $57,517 $186,236 $162,619
OPERATING EXPENSES:
Salaries, wages and
fringe benefits 18,789 15,145 52,616 46,421
Operating supplies
and expenses 17,997 15,410 48,911 46,619
Insurance, claims,
taxes and licenses 3,267 2,639 8,624 8,107
Depreciation and
amortization 6,043 5,494 17,363 15,522
Purchased transportation
and equipment rent 17,142 12,895 45,930 28,684
Other 2,867 2,491 8,506 7,522
Gain on sale of
revenue equipment (431) (375) (1,180) (562)
________ ______ ________ _______
TOTAL OPERATING EXPENSES 65,674 53,699 180,770 152,313
OPERATING INCOME 705 3,818 5,466 10,306
Interest and other income (7) (7) (15) (16)
Interest expense 1,543 1,282 4,520 3,775
_________________ ___________________
1,536 1,275 4,505 3,759
_________________ ___________________
EARNINGS BEFORE INCOME TAXES (831) 2,543 961 6,547
Income taxes (316) 975 365 2,475
_________________ ___________________
NET EARNINGS ($515) $1,568 $596 $4,072
_________________ ___________________
_________________ ___________________
NET EARNINGS PER
COMMON SHARE ($0.11) $0.35 $0.13 $0.90
_________________ ___________________
_________________ ___________________
<S> <C> <C>
</TABLE>
See accompanying notes.
<PAGE>
KLLM TRANSPORT SERVICES INC
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Thirty-Nine Weeks Ended
September 29, September 30,
1995 1994
(In Thousands)
<S> <C> <C>
NET CASH PROVIDED BY
OPERATING ACTIVITIES $17,127 $23,497
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Vernon Sawyer, Inc.
assets (Note B) (10,531)
Purchase of Fresh International
Transportation, Inc. (Note B) (2,566)
Purchases of property and equipment (19,155) (30,865)
Proceeds from disposition of
equipment 7,991 5,066
_________ _________
_________ _________
NET CASH FLOWS USED IN INVESTING
ACTIVITIES (21,695) (28,365)
_________ _________
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock
options 244 9
Purchase of common stock for treasury (108)
Debt to fund Vernon Sawyer, Inc.
acquisition 3,795
Net increase in borrowings under
revolving Line of credit 5,000 8,500
Repayment of long-term debt and
capital leases (4,272) (2,110)
Net (decrease) in borrowings under
working capital line of credit (1,552) (1,526)
________ ________
NET CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES 3,215 4,765
________ ________
Net Decrease in Cash and
Cash Equivalents (1,353) (103)
Cash and Cash Equivalents at Beginning
Of Period 1,353 869
________ ________
Cash and Cash Equivalents at End
Of Period $0 $766
________ ________
________ ________
<S> <C> <C>
</TABLE>
See accompanying notes.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
KLLM Transport Services, Inc.'s primary sources of
liquidity are its cash flow from operations and its existing
credit agreements. During the thirty-nine weeks ended
September 29, 1995, the Company generated $17.1 million in
net cash provided from operating activities.
The Company's traditional trade cycle on revenue
equipment requires significant investments in new tractors
and trailers, which were previously financed largely through
long-term debt and capitalized leases. The vast majority
of new tractors are now (beginning January 1995) being
leased under an operating lease plan with terms more
favorable
than could have been obtained with financing or capital
leasing. During the first nine months of 1995, the Company
entered into these operating leases with average annual
minimum rental payments of $4,057,000 through 1999. The
commitment for 1995 is approximately $2,000,000. Capital
expenditures, net of proceeds from trade-ins, during the
first nine months of 1995 were approximately $11,164,000.
Net capital expenditures for the remainder of 1995,
primarily for revenue equipment, are expected to be
approximately $600,000.
Effective May 1, 1995, the Company acquired
substantially all of the assets of Vernon Sawyer, Inc, a
regional
dry-van truckload carrier based in Bastrop, Louisiana. The
acquisition was financed from net cash provided from
operating activities and existing credit facilities.
Effective March 1, 1994, the Company acquired all of
the outstanding stock of Fresh International
Transportation, Inc., a company which provides temperature
controlled transportation via double-stack containers on
railroads. The acquisition was financed from net cash
provided from operating activities.
At September 29, 1995, the aggregate principal amount
of the Company's outstanding long-term indebtedness
was approximately $70.8 million. Of this total outstanding,
$3.8 million was in the form of 10.2% Notes due July 15,
1998, $20.0 million in the form of 9.11% Senior Notes due
June 15, 2002, $40.0 million consisted of the revolving line
of credit due April 7, 1997, and $7.1 million principal was
relative to capital leases with varying maturities.
The Company has a $50,000,000 unsecured revolving line
of credit with a syndication of banks. As noted
above, borrowings of $40,000,000 were outstanding at
September 29, 1995. Under the terms of the agreement,
borrowings bear interest at (I) the higher of prime rate or
a rate based upon the Federal Funds Effective Rate, (ii) a
rate
based upon the Eurodollar rates, or (iii) an absolute
interest rate as determined by each lender in the
syndication under
a competitive bid process at the Company's option.
Facilities fees from 1/4% to 3/8% per annum are charged on
the
unused portion of this line.
Working capital needs have generally been met from net
cash provided from operating activities. The
Company has $4,150,000 in unsecured working capital lines of
credit with a bank, $1,702,000 of which was available
at September 29, 1995. Interest is at a rate based upon the
Eurodollar rates with facility fees at 1/4% per annum on the
unused portion of the line.
The Company anticipates that its existing credit
facilities along with cash flow from operations will be
sufficient to fund operating expenses, capital expenditures,
and debt service.
Results of Operations
Operating revenue for the third quarter and first nine
months of 1995 increased 15.4% and 14.5% over the
comparable periods of 1994. The increase in operating
revenue in the third quarter consisted of a 4.5% increase
from
the Company's traditional over-the-road truckload business,
of which a 6.7% increase came from the owner-operator
division, a 1.8% decrease from rail services, 3.6% increase
from transportation brokerage services, 1.9% increase from
international services, and 7.2% increase from the addition
of our new dry-van over-the-road truckload division. The
increase in operating revenue in the first nine months of
1995 consisted of a 3.4% increase from the Company's
traditional over-the-road truckload business, of which a
6.8% increase came from the owner-operator division, an 0.6%
decrease from rail services, 4.4% increase from
transportation brokerage services, 2.9% increase from
international services, and 4.4% increase from the addition
of our new dry-van over-the-road truckload division. The increase in
revenue resulted from an increase in available
Company-operated equipment. The average number of Company
operated trucks in the third quarter and first nine months
of 1995 increased by approximately 15.0% and 12.2%, from
the comparable periods in 1994.
The operating ratio increased from 93.4% to 98.9% for
the third quarter and from 93.7% to 97.1% for the first
nine months of 1995 compared to the same periods in 1994.
During the third quarter of 1995 operating revenues and
results, particularly in our trucking and rail operations,
were affected by continuing softening in demand for
transportation services which has plagued the industry in
recent months. During the first nine months of 1995,
operating revenues were affected by the West Coast flooding, a
Canadian National Railway strike and the continuing
industry-wide softness in the transportation market. The
relative change in the components of operating expenses
during 1995 reflects the increase in purchased transportation by the
newer operating divisions as compared to 1994, and the
increase in equipment rent regarding the new operating leases for
tractors and trailers, as previously mentioned. The
increase in gain on sale of revenue equipment during the first nine
months of 1995 as compared to the same period in 1994
resulted in a decrease in the operating ratio of 0.3%.
Substantially all of the growth in revenue is from the
newer operations. These divisions are lower margin than the
traditional over-the-road freight operation which increases
the operating ratio overall; however, they are not as capital
intensive.
As a result of the foregoing, net earnings decreased by
$2,083,000 or 133% for the third quarter and by
$3,475,000 or 85% for the first nine months of 1995 from the
comparable periods of 1994. Earnings per share decreased
from $.35 to a loss of $.11 in the third quarter of 1995 and
decreased from $.90 to $.13 in the first nine months of 1995
compared to the same periods of 1994.
Seasonality
In the transportation industry, results of operations
generally show a seasonal pattern because customers reduce
shipments during and after the winter holiday season with
its attendant weather variations. The Company's operating
expenses have historically been higher in the winter months
primarily due to decreased fuel efficiency and increased
maintenance costs in colder weather.
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
There were no reports on Form 8-K filed for the
quarter ended September 29, 1995.<PAGE>
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.
KLLM TRANSPORT SERVICES,INC.
(Registrant)
Date November 13, 1995
J. Kirby Lane
Executive Vice President and
Chief Financial Officer
Date November 13, 1995
Cindy F. Bailey
Corporate Controller
<PAGE>
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.
KLLM TRANSPORT SERVICES, INC.
(Registrant)
<TABLE>
<S> <C>
Date November 13, 1995 /s/ J. Kirby Lane
J. Kirby Lane
Executive Vice President and
Chief Financial Officer
Date November 13, 1995
/s/ Cindy F. Bailey
Cindy F. Bailey
Corporate Controller
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-29-1995
<PERIOD-END> SEP-29-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 31,675
<ALLOWANCES> 147
<INVENTORY> 1,535
<CURRENT-ASSETS> 41,015
<PP&E> 188,606
<DEPRECIATION> 58,619
<TOTAL-ASSETS> 173,713
<CURRENT-LIABILITIES> 23,708
<BONDS> 0
<COMMON> 4,552
0
0
<OTHER-SE> 64,132
<TOTAL-LIABILITY-AND-EQUITY> 173,713
<SALES> 0
<TOTAL-REVENUES> 186,236
<CGS> 0
<TOTAL-COSTS> 180,770
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,520
<INCOME-PRETAX> 961
<INCOME-TAX> 365
<INCOME-CONTINUING> 596
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 596
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0.13
</TABLE>
